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Health care law provides challenges for employers, legal experts say

Health care law provides challenges for employers, legal experts say

By Gabriel McIntosh

The new health care law promises to usher in major changes in the way medical services are delivered in America, presenting challenging issues to employers, several lawyers said Friday during a panel on the second day of the American Bar Association Annual Meeting in San Francisco.

“In a lot of ways, we are building the plane while we are flying it,” said Jill Gordon, an attorney at Nixon Peabody LLP in Los Angeles.

The pieces of the health care law approved by Congress in President Barack Obama’s first term are collectively known as the Affordable Care Act, which passed along a strong party-line vote in 2010. The ACA will offer employers many challenges because of its complexity, a panel of health care and employee benefits attorneys observed.

“This health care reform is very expansive and broad, and it reached every sector of the United States, including the nonprofit sector,” said moderator Willard L. Boyd III of Nyemaster Goode P.C. in Des Moines, Iowa.

In a two-hour session sponsored the Nonprofit Organizations Committee of the ABA Business Law Section,the attorneys outlined in detail those parts of the ACA that will most affect employers, from specific exemptions for religious nonprofit organizations and hospitals to broad changes in fee reimbursements for medical services.

“There are a lot of issues on the horizon,” said Rachael Maxwell-Jolly, an attorney with Hanson Bridgett LLP in San Francisco. “This is not a one-time law that is fixing everything.”

Rather, she said, the next few years represent a rollout of the law in a changing market environment. “There are a lot of assumptions that may be correct or incorrect,” she said.

Judith Boyette, also of Hanson Bridgett in San Francisco, said the best news for employers is that on July 2 the deadline for penalties for failure to provide coverage next year was extended to 2015. This will give employers affected by the law “time to prepare” for considerable changes from current operations, she added.

But a number of other initiatives, such as the health exchanges, start the first of next year.

Gabrielle Goldstein, an attorney at Nixon Peabody LLP in Los Angeles, pointed out that one of the most significant changes stemming from the new law is the “move away from a fragmented system” of fee for services. Instead, she said, the law will accelerate the establishment of a delivery system for medical care that uses “identifiable quality metrics” rather than low-quality, volume care.

“That’s a real piece that’s really here to stay,” she said.

“The inertia is in this direction,” Goldstein concluded, “and from a policy level, this is where things are moving in the future.”

The continuing legal education session was titled “The Business of Healthcare, Part II: Legal Issues for Employers and Health Care Providers Complying with the New Coverage Rules.” Part I focused on the development of health care exchanges provided by the act.

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