The implications of the 2010 patient protection and affordable care act and the health care and education reconciliation act on cancer care delivery



In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act. This legislation attempts to address cost control and improve the quality of healthcare in the United States. Cancer is a major health problem in the United States and the leading cause of death for Americans under the age of 80. Therefore, cancer care providers need to be fully engaged in ongoing discussions regarding quality measurement and care delivery. With the optimum level of collaboration and support, the proposals in the legislation can be properly structured to deliver improved access to care via better delivery systems, as well as more appropriate reimbursement to advance the prevention and treatment of cancer. Cancer 2011. © 2010 American Cancer Society.

On March 21, 2010, President Barack Obama signed into law landmark legislation aimed at reforming our healthcare delivery system. Where the assurance of healthcare coverage for all Americans was the focus of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act (known together as the Accountable Care Act or ACA), the statutes contain numerous provisions addressing issues related to controlling costs and improving the quality of healthcare in the United States.

The ACA expands health insurance coverage to individuals who were not previously covered by any health plan through the implementation of individual and employer mandates as well as through the expansion of federal and state programs such as Medicare and Medicaid. It attempts to control increasing healthcare expenditures through a series of pilot and demonstration projects to address healthcare delivery and reimbursement systems. The proposed models appear structured to encourage closer collaboration among providers in reducing unnecessary and/or redundant treatment, thereby reducing costs. The reimbursement reforms stem from concern that the current system rewards volume and intensity of healthcare services, rather than quality, value, and safety.

Because of its broad scope, the law contains several items that have far-reaching implications for the cancer community regarding the payment and delivery of cancer care, including prevention, diagnosis, and treatment. It is expected to be the starting point from which healthcare providers and payers commence a reformation of the current system to achieve quality care for our country. It is crucial that cancer care providers engage in the ensuing discussions as reforms are implemented in the coming years.

Cancer is a major health problem in the United States and the leading cause of death for Americans under the age of 80. Innovations in cancer treatment are costly, contribute to rising total healthcare expenditures, and are not uniformly validated for improved efficacy. Improved access, new delivery models, and new reimbursement algorithms have the potential to positively affect the prevention and treatment of cancer. The purpose of this report is to examine the implications of this legislation on cancer care via the proposed methodologies to reform healthcare delivery, reimbursement, and quality.


Access to care is expanded through the ACA by requiring that most US citizens carry some form of health insurance. According to the Congressional Budget Office (CBO), an estimated 32 million additional individuals will be covered by 2019 through the expansion of public programs and private sector health insurance initiatives. An additional 23 million individuals will remain uninsured, one-third of whom are unauthorized immigrants living in the United States. Ultimately, insurance coverage of the legal, nonelderly population will increase from 83% to 94%. Insurance availability will be beneficial to cancer patients, especially survivors who have previously been denied coverage because of the presence of a pre-existing condition, a practice that is now prohibited.1

New marketplaces, called health benefit exchanges, will provide consumers with information to help them choose and purchase health insurance plans. State-based health benefit exchanges will permit individuals and families with incomes between 133% and 400% of the federal poverty level (FPL) to purchase insurance. Premium and cost-sharing subsidies will be available to help make coverage more affordable. Small businesses will be able to purchase coverage for their employees through similar, but separate, exchanges. Individuals and employers will be subject to incentives and penalties for obtaining, or not obtaining, coverage, respectively. For example, employers with more than 50 employees will be fined for not providing coverage, and, because the penalties are based on the number of employees, these penalties could be significant for large employers. An individual who does not have health insurance by 2014 will be penalized $95 or 1 percent of income, whichever is greater, so long as the amount does not exceed the cost of a basic health plan. But by 2016, the penalty increases to $695 for an uninsured adult, and up to $2085 for a family, or 2.5 percent of income, whichever is greater.2

The CBO originally estimated the cost of this legislation to be $940 billion over 10 years (producing a net reduction in federal deficits of $143 billion over the 2010-2019 period): $466 billion being used in subsidies to fund the insurance programs for families who participate in the provision, providing coverage for up to 400% of the FPL; $434 billion for expansion of the Medicaid and Children's Health Insurance Plans; and $40 billion for small business tax credits. However, in mid-May 2010, the CBO raised their cost estimate owing to the calculation of discretionary spending in the law, which was estimated to exceed $115 billion between 2010 and 2019.3

Several funding sources were anticipated by the CBO during the development of ACA. These included $196 billion in reduced Medicare payments, $132 billion in cuts to the Medicare Advantage program, $36 billion in cuts to Medicare and Medicaid Disproportionate Share Hospital (DSH) payments, $32 billion from taxes on high-cost health plans (individual policies above $8500 and family policies above $23,000), $210 billion in new Medicare taxes (including taxes on investment income for individuals with annual incomes more than $200,000 per year), $60 billion from insurance company fees, $27 billion from branded pharmaceutical manufacturers and importers, and other miscellaneous revenue sources. It should be noted that these figures represent estimates from the CBO (based strictly on information appearing in this legislation) and do not take into consideration the influence of the law on payers and providers who may take actions that produce significant variance in the cost of this legislation.

Alternative Payment and Care Delivery Models

There are several provisions in ACA that, either explicitly or indirectly, have the potential to significantly affect how cancer care is delivered and reimbursed. Below are the provisions from the law that attempt to rectify the current delivery system and reimbursement structure for cancer care. The below summary surrounds the creation of 2 new entities designed to study delivery of care. We then discuss pilot projects aimed at modifying healthcare delivery and reimbursement systems.

Patient-Centered Outcomes Research Institute

A Patient-Centered Outcomes Research Institute (Institute) is established to provide assistance in healthcare decision-making through advancement of the quality and relevance of evidence for conditions. The Institute will convene a Board of Governors consisting of the following: the Director of Agency for Healthcare Research and Quality (AHRQ) (or designee), The Director of the National Institutes of Health (NIH) (or designee), and 17 members appointed by the Comptroller General: 3 representing patients and consumers, 5 representing providers, 3 representing private payers, 3 representing pharmaceutical companies, 1 quality improvement or health services research independent researcher, and 2 representatives of the federal or state government.4

Comparative effectiveness research (CER) has been a major initiative of the Obama administration, beginning with $1.1 billion appropriated in the 2009 economic stimulus package for CER designed to test treatments in operational settings of healthcare delivery. Comparative clinical effectiveness research (CCER) is introduced in ACA as research evaluating and comparing health outcomes and the clinical effectiveness, risks, and benefits of 2 or more medical treatments, services, and items. Because this type of research has been controversial, stemming from concerns that it will lead to rationing of health services, a further provision instructs that the Secretary of Health and Human Services (Secretary) may only use evidence and findings of CCER to make a determination regarding coverage if the process is public, iterative, and transparent.

ACA clearly states that the Secretary is not authorized to deny coverage of items solely because of CCER findings, or to use the findings to determine treatment coverage, reimbursement, or incentive programs for certain subpopulations of patients. However, the research findings may be used to make new or amend current coverage and reimbursement policies and/or to change a beneficiary's out-of-pocket cost—thereby strongly impacting a physician's or patient's therapeutic choice.

Impact on Cancer Care

CCER research of cancer treatment has the potential to change the services and products provided to cancer patients as well as coverage by health plans. The cost-sharing and coverage provisions are a significant departure from current Medicare policy; the Centers for Medicare and Medicaid Services (CMS) will now be able to alter coverage or create situations where beneficiaries could face greater out-of-pocket cost. The impact for cancer care is especially great because of the potential for off-label use of pharmaceuticals and new, novel therapies to be denied. Another concern is that utilization controls could be enforced in the absence of clinical evidence.

Center for Medicare and Medicaid Innovation

The stated purpose of establishing the Center for Medicare and Medicaid Innovation (CMI) within CMS is to test innovative payment and service delivery models to reduce CMS expenditures while maintaining or improving the quality of care. According to ACA, the CMI must be established and functioning by January 1, 2011. Delivery models that improve the coordination, quality, and efficiency of healthcare services will be given preference. In addition, this section establishes Health Innovation Zones that include teaching hospitals designed to work with other providers to deliver a full spectrum of care.5

The innovative model for cancer described for the CMI incorporates aligning evidence-based guidelines with payment incentives in the areas of treatment planning and follow-up care for qualified cancer patients, including the identification of gaps in applicable quality measures. The CMI offers both benefits and risks to cancer delivery. While the CMI serves as an opportunity to test new delivery systems, inevitably the goal is to enhance or maintain quality while decreasing costs. In addition, the establishment of Healthcare Innovation Zones may benefit those cancer programs integrated with academic centers, but it appears cost savings are the primary goal.

Reimbursement models: national pilots on payment bundling

Cancer treatment encompasses a multitude of complex medical regimens that ideally are customized for each individual patient. This clinically necessitated customization creates wide variation in resource consumption that in turn leads to variation in cost estimates for patients with otherwise similar disease and treatment characteristics. Institutions currently have cost information available for treatment estimates, but this information lacks a clinically relevant connection to disease staging and treatment planning. As a result, a section of the ACA is specifically devoted to a pilot project related to this type of reimbursement reform. Bundled payments (also known as “case rates,” “episode-based payments,” or “total treatment packages”) create a single payment for all services related to a treatment or condition, possibly spanning multiple providers in multiple settings. A 5-year pilot program is established within the ACA in which treatment will be integrated during and after a hospitalization for an episode of care rendered a beneficiary to improve coordination, quality, and efficiency of the healthcare provided. The applicable services are designated as acute inpatient; physicians' services in and outside of the acute care setting; outpatient hospital services, including the emergency department; postacute services; and other services deemed appropriate. An “episode of care” is defined as 3 days before admission, length of stay, and 30 days after discharge. In addition, the Secretary has the authority to determine episodes of care and develop payment methods and quality metrics for the program, as appropriate.6

A second project will assess the use of bundled payments for Medicaid beneficiaries to evaluate integrated care around a hospitalization. The project is proposed to start January 1, 2012 and end December 31, 2016. It will be conducted in up to 8 states selected by the Secretary on their potential to lower Medicaid costs while improving care.7

Where these sections address inpatient care and are not likely applicable to a cancer treatment bundle, this pilot program must be closely monitored by cancer care providers because of the attention the method is receiving by payers. Bundled payments have the potential to provide incentives to better coordinate care through alignment with evidence-based best practices and clinical quality standards. They can also identify clinical variation, standardize costs of effective care, and provide for identification and stratification of high-risk patients.8 These payment models are also valuable for strategic business decision-making through cost and resource analysis and evaluation of return on investment for disease management programs. Cancer care providers need to work closely with other primary and specialty care networks to ensure they are included in the development of appropriate payment models, as bundled payments have not yet been created for the many diseases that fall within the scope of cancer care.

Reimbursement models: shared savings through Accountable Care Organizations

Accountable Care Organizations (ACOs) are partnerships between hospitals and physicians designed to coordinate and deliver efficient care and provide payment on the basis of value and quality, rather than volume and intensity of services. The ACA specifically defines ACOs as groups of providers who work together to manage and coordinate care for Medicare beneficiaries. A pilot reimbursement provision using ACOs requires that, by no later than January 1, 2012, the Secretary will establish a shared savings program that promotes accountability for a patient population, coordinates services under Medicare Parts A & B (the inpatient and physicians' services components), and encourages investment in infrastructure and redesigned care processes for high-quality and efficient service delivery. Group practices, practice networks, partnerships between hospitals and physicians, and hospitals employing physicians may work together to coordinate care for Medicare beneficiaries through an ACO. ACOs must have a minimum of 5000 Medicare patients and sufficient primary care physicians to care for them. They must also have a legal structure in place to receive and distribute shared savings payments, an effective leadership structure with processes to promote evidence-based care, and a minimum 3-year Medicare contract.9

Incentives through these arrangements relate to shared savings. Payments will continue to be made to providers in an ACO under the original Medicare fee-for-service (FFS) program in the same manner, except that a participating ACO is eligible to receive payment for shared savings if the ACO meets quality performance standards. The provider will receive payment if the estimated average per capita Medicare expenditures under the ACO for FFS are at least the percentage specified below the applicable benchmark. The Secretary will determine the appropriate percent to account for normal variation in expenditures, as well as estimate a benchmark for each agreement period, using the most recent available 3 years of per-beneficiary expenditures for Parts A & B assigned to the ACO. If it is determined that an ACO is avoiding patients at risk to enhance the likelihood of increasing costs, the entity will be sanctioned or possibly terminated from the program.

The first of the projects in the ACA authorizes a participating state to allow certain pediatric medical providers to be recognized as an ACO for purposes of receiving incentive payments. The project will begin on January 1, 2012 and end on December 31, 2016.10 In a second project beginning January 1, 2011, a state may provide for medical assistance to eligible individuals with chronic conditions who select a designated provider or health team as their health home. As a condition for receiving payment, a provider will report to the state all applicable measures for determining quality of such services. Although cancer is not a chronic condition specified by this section of the law, it does allow for other conditions to be considered, despite not being listed.11

To take advantage of incentive payments, providers need to prepare their organizations to report quality and performance data as they are developed and approved by the Secretary. This includes investments in electronic health records to allow data capture of a variety of health outcomes and cost information that can be easily analyzed. Not all of the regulatory requirements for ACOs have been released; CMS anticipates providing additional details by the end of 2010.

Delivery models: Patient-Centered Medical Home

The Patient-Centered Medical Home (PCMH), also known as a “medical home” or “health home,” is an approach to providing comprehensive primary care that facilitates partnerships between individual patients and their personal providers, and, when appropriate, the patient's family.12 ACOs and PCMHs are complementary systems that could be beneficial to cancer care delivery, given that primary care can provide needed prevention and early detection services. In the PCMH, primary physicians coordinate all aspects of care, but with more collaboration from support staff with an emphasis on preventing, managing, and monitoring chronic diseases.13 PCMHs are designed to more effectively monitor the status of patients between office visits through the use of physician extenders to more effectively engage patients in their own care. This model provides incentives for primary care physicians to coordinate with specialists and hospitals, ideally with the help of computerized medical records.14

The PCMH model currently exists in many states serving Medicaid patients.15 All pilots have resulted in increased payments to primary care practices. Medicaid currently has medical home pilot programs in at least 31 states, with plans to expand a demonstration project that includes 400 participating practices nationwide (50 per state in 8 participating states) as part of the ACA.16

Both of the described structures are crucial for providers to understand. Cancer care providers, specifically, will need to establish relationships in these new ACOs and PCMHs to ensure that patients in these systems receive appropriate specialist care when needed. The implications for cancer care providers depend on the type of practice arrangement the provider currently represents. Cancer centers and programs currently within hospital networks or academic medical centers that provide a wide range of health services, including primary care, will be able to collaborate within their existing networks. Larger independent cancer centers will need to develop partnerships with other networks providing a full range of health services, including primary care.

The relationships between cancer providers and PCMHs will be similar to ACOs, with the exception that, with some specialties, the specialty center itself can become the PCMH for those patients suffering from that condition. For example, mental health facilities can serve as the PCMH for patients with severe mental health disorders, and at least 1 oncology practice has been certified to serve as the health home for their patients through the National Committee for Quality Assurance.17, 18

Cancer care delivery providers must be able to demonstrate value to these relationships by providing optimal outcomes at a reasonable cost. The collaborative nature of these new relationships requires partnering with the primary care providers in new ways and appropriately integrating the primary care partner into the patient's management during the entire cancer care cycle. These new collaborative relationships will benefit from effective health information technology and robust electronic medical records—also essential in the reporting of quality metrics.

Although many of these pilots and demonstrations will not be implemented immediately and may have minimal short-term (1-3 year) impact, it is inevitable that CMS will continue to analyze the cost of cancer care treatment through reimbursement and delivery reforms that emphasize primary care. Several specialty organizations have developed extensive reviews of this topic, including the American Hospital Association's Committee on Research.19

Quality Initiatives

Quality reporting for Prospective Payment System (PPS) exempt cancer centers

Beginning in fiscal year 2014, and thereafter, cancer hospitals exempt from the prospective payment system (PPS) will be required to submit data to the Secretary on quality measures endorsed by the National Quality Forum (NQF). The PPS is a fee schedule used by CMS to pay hospitals and other providers whereby fees are determined yearly. PPS-exempt cancer centers are freestanding, nonprofit cancer centers with a singular focus on cancer. Unlike other comprehensive cancer centers that are typically components of large medical centers treating a wide variety of diseases, the exempt centers have a dedicated mission to advance the nation's understanding of the cause, diagnosis, prevention, and treatment of cancer. Congress has established a distinct payment system for exempt centers, recognizing their unique status and structure.

The quality measures for PPS-exempt cancer centers must be agreed upon by 2012 and the measures must reflect outcomes, processes of care, structure, efficiency, patients' perceptions of care, and costs. The Secretary will establish procedures for making these data public on the CMS website.20 The NQF has a very detailed structure and process for identifying and endorsing quality measures, and is composed of multiple organizations that include pharmaceutical companies, insurance providers, nursing professional organizations, physician professional organizations, and specialty organizations, as well as hospitals and individual providers. Although the NQF currently endorses numerous measures related to cancer care delivery, most of those measures relate to processes of care. To date, voting membership in the NQF has not had broad representation from the cancer community; however, as of mid-2010, 9 of the 11 PPS-exempt cancer centers have joined the organization.

Although this provision specifically addresses cancer hospitals exempt from the PPS, it clearly represents the first step in efforts to mandate public reporting of outcomes, costs, and other quality measures of cancer care. This provision will lead to greater transparency and scrutiny in the outcomes and costs related to cancer care.

Quality measures, data collection, and public reporting

In addition to mandatory quality reporting for PPS-exempt cancer centers, an entire section of ACA is devoted to the creation of plans for the development, collection, and public reporting of quality measures for other providers. In this section, quality measures are defined as a standard for measuring the performance and improvement of population health or of health plans, providers, and other clinicians. The Secretary will identify gaps where no quality measures exist and existing quality measures that need improvement, updating, or expansion consistent with national strategy. This process will alsoconsider gaps identified by the NQF.21

These measures will allow assessment of health outcomes and functional status, management and coordination of episodes of care and care transitions, experience and quality, meaningful use, efficiency, timeliness, safety, equity, satisfaction, use of innovative strategies, and other areas identified by the Secretary. Providers need to be aware that the information will be available to the public on the Internet.

Members of the NQF will create and vote on these quality measures. However, each organization is only given 1 vote; thus, the impetus is on the cancer community to join this organization to submit and support measures that are meaningful to providers and patients. The Secretary will collect and aggregate data on quality and resource use measures from information systems used to support healthcare delivery. This approach will ensure that collection, aggregation, and analysis span a broad range of patient populations, providers, and geographic areas. This database will be used to implement the public reporting of performance information.22, 23

By January 1, 2011, the Secretary will develop a Physician Compare Internet site to publish information on physicians enrolled in the Medicare Program to rate their quality and efficiency. Measures reported will include outcome assessment, efficiency, patient satisfaction, and assessments of safety and effectiveness of care. The Secretary may establish a demonstration program by January 1, 2019, to provide financial incentives to Medicare beneficiaries who are furnished services by high-quality physicians.24

As indicated by previous CMS quality reporting initiatives, the agency and Congress are steadily moving from pay for reporting to pay for performance. In addition, CMS is moving from providing incentives to providers for reporting to penalizing nonreporting providers. The hospital inpatient quality reporting program, Reporting Hospital Quality Data for Annual Payment Update, currently penalizes hospitals that do not participate, and, as mandated in ACA, physicians not participating in the Physician Quality Reporting Initiative (PQRI) will be penalized beginning in 2015.25 Providers need to prepare their organizations for the use of information technology; they must expect that quality of care data will be made available to consumers, who will receive financial incentives through choosing high-quality providers. Providers need to become more knowledgeable regarding the NQF quality measure development process and be prepared to engage in this process to ensure that clinically appropriate and feasible measures result.

Pay for performance pilot for PPS-exempt cancer hospitals

The law requires that pilot programs testing the implementation of a value-based purchasing program for payments, including PPS-exempt cancer hospitals, be conducted by January 1, 2016.26 It is important to note that if such efforts are deemed to result in significant improvements the Secretary may expand the duration and scope of these programs (after January 1, 2018) without further legislative intervention—provided the program does not increase spending, reduce quality, or impair coverage to Medicare beneficiaries.

The impact of pay for performance is not yet apparent because the details of the pilot have not been developed or released. However, keeping in line with other provisions of the ACA, a pay for performance pilot will lead to greater analysis regarding the delivery of cancer care, including more transparency, cost reduction, and demand for high quality results.


The United States requires a safer, more effective, and more efficient system of healthcare delivery to sustain and improve the care provided to our population. Although the ACA attempts to improve quality of care through measure development, reporting, and testing of different delivery system and reimbursement models, the cancer care community should undertake a more in-depth analysis into practice variation, guideline measurement, volume providers, and inappropriate care across providers. It is crucial that examination of the proposed programs and changes to the delivery system continue if the goal of increased quality and safety of care in the most efficient system is to be reached.

The cancer-specific measures in the law, which are described at the end of this report, are relatively well defined. The broader measures in the law provide the most uncertainty regarding the future of cancer care delivery. Determining the impact of wider access to healthcare on our current payment system is new territory; however, decreases in payment rates from the Medicare and Medicaid programs appear to be inevitable. How the insurance industry and the provider community will respond is largely unknown, but reductions in managed care contracting rates appear likely, as does decreased participation in federal insurance programs by providers.

The demonstrations of PCHMs and ACOs are of great importance to cancer care providers, as new systems designed to emphasize primary care, early detection, and disease prevention offer promising opportunities to decrease the prevalence and mortality of cancer. However, these measures also generate uncertainty regarding how established tertiary-care cancer centers will need to relate to these new entities with respect to patient flow and reimbursement for care. New models for reimbursement, such as bundled payments for episodes of care and the availability of more comparative effectiveness evidence, offer the promise of transition away from payment based on volume and intensity of service, but also introduce new uncertainty about risk and profit-sharing aspects of such a system.

In addition, the public reporting of quality measures, costs, and outcomes will introduce new aspects of competition into the cancer care delivery process. Healthcare consumers will be able to critically evaluate and, in theory, make better choices about services provided by cancer care delivery systems as well as those offered by health insurers. These undefined components of the law offer the cancer care community the opportunity to be part of redefining our cancer care delivery system.

The Patient Protection and Affordable Care Act is a landmark change for the American healthcare system, but many of the provisions will be implemented slowly over the next 10 years. The true impact of these reforms, particularly in cancer care delivery, will not fully be realized for several years, but in the near-term the cancer care community can anticipate changes relating to quality reporting as well as the continued exploration of alternative payment and delivery systems.

Additional Items of Significance

Coverage for individuals participating in clinical trials

In 2014, insurers will be required to cover the routine patient care costs related to clinical trials for all life-threatening diseases, including cancer. This complements existing legislation in 27 states, such as Texas, which requires state-covered plans to cover the normal costs of care for patients in clinical trials. The new law ensures that federally covered Employee Retirement Income Security Act plans are also covered. The result is if an issuer provides coverage to a qualified individualthey may not deny the participation in a clinical trial, nor the coverage of routine costs of care.27

Disease prevention provisions

Several portions address mandatory coverage of evidence-based practices in prevention services, specifically smoking cessation, weight control, stress management, and the promotion of healthy lifestyles. Initiatives designed to promote prevention have the greatest potential to alter the impact of cancer on our population, but these provisions must be implemented and followed over time. The law also requires coverage of early detection services, such as mammography and breast cancer screening.28, 29

  • The law establishes a council identified as the “National Prevention, Health Promotion and Public Health Council” (Council). The Council will coordinate federal departments and agencies with respect to prevention, wellness and health promotion, the public health system, and integrative healthcare with the aim to develop a national strategy to be enacted no later than 1 year after the Act. The Council will provide recommendations to the President and Congress on health issues including tobacco use, sedentary behavior, and poor nutrition.30

  • An independent Preventive Services Task Force will also be convened to review evidence related to effectiveness, appropriateness, and cost-effectiveness of clinical preventive services to develop recommendations to be published in the Guide to Clinical Preventive Services.31

  • The Centers for Disease Control and Prevention (CDC) will establish and implement a national science-based media campaign no later than 1 year after enactment of the law to address nutrition, exercise, smoking cessation, and obesity. The campaign will be carried out through competitively bid contracts awarded to entities providing production and design of a campaign.32

  • Annual wellness visits will now be covered during which a personalized prevention plan will be created. Personalized prevention plan services are defined in the law as plans for an individual that include a health risk assessment; medical or family history; a list of current providers and medications; measurement of height, weight, body mass index, and blood pressure; detection of any cognitive impairment; screening schedule; appropriate personalized health advice; and other elements defined by the Secretary. The Secretary will publish the guidelines for health risk assessments no later than 1 year after enactment of the law. Also included is a provision for the payment and elimination of coinsurance with respect to personalized prevention services. The law states that the amount paid for personalized prevention services will be 100% of the lesser of the actual charge for the services or the amount determined under the payment basis established under section 1848, and deductibles will not apply with respect to personalized prevention plan services.33

  • Deductibles are waived for colon cancer screening tests and preventive services. This is applied with respect to a colorectal cancer screening test regardless of the code billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter, or other procedures furnished in connection with, as a result of, and in the same clinical encounter as the screening test.34

  • States are eligible to receive grants to provide incentives to beneficiaries who participate in certain programs, including ceasing use of tobacco products.35

  • The Secretary will award grants to agencies for the implementation, evaluation, and dissemination of evidence-based community preventive health activities to reduce chronic disease rates, prevent the development of secondary conditions, address health disparities, and develop a strong evidence-base of effective prevention programming.36

  • States or local health departments are eligible for grants to carry out 5-year pilot programs to provide public health community interventions, screenings, and referrals for individuals between 55 and 64 years of age.37

  • A pilot will be established to test the impact of providing at-risk populations, who use community health centers, with an individualized wellness plan designed to reduce risk factors for preventable conditions.38

Programs relating to breast health and cancer

In a single provision devoted to awareness and early detection of breast cancer, a national evidence-based education media campaign will be conducted to expand young women's knowledge regarding breast health, awareness, and occurrence information that would encourage women and their providers to increase early detection and the availability of health information for young women diagnosed with breast cancer. An Advisory Committee will be established to provide health information to young women diagnosed with breast cancer and preneoplastic breast diseases.39

Laboratory test demonstration project—molecular diagnostics

A demonstration project is proposed to establish appropriate payment rates for certain complex diagnostic laboratory tests that include gene protein expression, topographic genotyping, chemotherapy sensitivity assay, and tests for which there is no alternative test equivalent. Separate payments are direct payment to a laboratory (including hospital-based) that performs a complex diagnostic lab test.40 This demonstration project could lead to a carve-out from a potential episode-based payment. Further analysis should be conducted regarding whether these particular types of tests are appropriate to include within an episode-based payment or whether they should be excluded on the basis of type and volume of services.

Changes to hospital payment systems—value-based purchasing

The hospital value-based purchasing program begins in 2013 and provides financial incentives for hospitals in the prospective payment system to achieve certain quality measures. The measures are described as “value-based” measures. The Secretary is meant to select the measures, but they must come from treatment of at least 5 conditions: heart failure, pneumonia, myocardial infarction, surgery (measures from the Surgical Care Improvement Project), and healthcare acquired infections. The incentives will also derive from patient satisfaction as determined by measures from the Hospital Consumer Assessment of Healthcare Provider Survey. As the program expands in 2014, efficiency measures are to be introduced.41

Quality improvement research programs

An additional section directs the CDC to provide funding for research in the area of public health services and systems, including comparing community-based public health interventions in terms of cost and effectiveness; analyzing translation of interventions from academics to bedside care; and identifying effective strategies for organizing, financing, or delivering public health in community settings.42

A Center for Quality Improvement and Patient Safety (Center) of AHRQ is established in the legislation to identify, develop, evaluate, disseminate, and provide training in innovative methodologies and strategies for quality improvement practices in the delivery of healthcare services, and allow for communication of these findings through the likely establishment of a Quality Improvement Network Research Program through the Center. Additional provisions award technical assistance grants to entities to support institutions that deliver healthcare to implement practices and models identified in the research by the Center for Quality Improvement and Patient Safety at AHRQ.43

Hospital readmissions

An entire section of the law is devoted to a program designed to limit readmissions by reducing payments to hospitals with excess readmission rates for certain diagnosis-related groups (DRGs). Readmission is defined in the law as the admission of an individual to the same or another applicable hospital within a time period specified by the Secretary from the date of such discharge. If the discharge relates to an applicable condition for which there is a NQF-endorsed measure described for such time period (such as 30 days), the applied penalty will be consistent with the time period specified for that measure.44 Readmission rates of hospitals will also be publically reported.

Independent Medicare Advisory Board

The ACA creates and expands the scope of the Independent Medicare Advisory Board to reduce the per capita rate of growth in Medicare spending. The law provides for a plan to submit a proposal to reduce spending if Medicare spending exceeds the targeted growth rate. The Board will consist of 15 members appointed by the President, including the Secretary of Health and Human Services, the CMS Administrator, and the Health Resources and Services Administrator. The Board's charge is to control Medicare spending increases closely monitored by Congress.45, 46

Professional education

The bill contains several areas related to professional education relevant to the cancer care community. This project may award grants to carry out demonstration projects to develop and implement a curriculum that integrates quality improvement and patient safety in the clinical education of health professionals.47 Professional education regarding quality improvement and patient safety is essential to implement the programs listed in the legislation. Without education of future providers, the programs proposed are unsustainable.

Enhancement of nursing retention programs, promotion and career advancement, development of residency and internship programs, and assistance in obtaining education and training are also proposed. The law allows for the program to be authorized as necessary in each fiscal year from 2010 through 2012.48 An additional program establishes a graduate nurse education demonstration for up to 5 hospitals, under which an eligible hospital may receive payment for its reasonable costs for provision of qualified clinical training to advance practice nurses.49

Tanning and skin cancer prevention

In an effort to regulate tanning booths, a provision of the bill adds a 10% tax on services provided by tanning facilities. Several melanoma research organizations are attempting to establish tanning booths as medical devices. These groups have also proposed the need for skin cancer prevention to include regulations that would allow Medicare to cover routine skin exams; however, the only addition to the law related to melanoma prevention is a tanning tax.50

Implementation Timeline

2011: States will be required to establish Medicaid programs that extend eligibility to all who are under 133% of the FPL. Participation is voluntary until 2014.

2012: A value-based purchasing program for hospitals is established to measure hospitals' quality performance, and the program reducing hospital reimbursement for those with higher than expected readmission rates is implemented.

2013: Medical device tax of 2.3% is imposed and 1% of the DRG payment is tied to performance on quality and outcome measures.

2013: Hospital-acquired conditions are publically reported, a voluntary pilot on payment bundling begins, and the Medicare payroll tax begins to include investment income on individuals with more than $200,000 in annual income.

2014: Bans on coverage refusal for pre-existing conditions begin, as do lifetime and annual limits for all individuals.

2014: Insurance will be available through Health Benefits Exchanges, the Medicare Value-Based Purchasing Program reduces payments by 1.5%, Medicare and Medicaid DSH payments are reduced, the hospital readmission policy is expanded to include more conditions, and the maximum penalty for higher than expected readmissions increases to 3%. In addition, all state Medicaid programs will be required to provide coverage to individuals up to 133% of the FPL and states will receive federal funds to pay for the newly expanded populations; however, matching funds are reduced over time. PPS-exempt cancer centers will report quality and outcome measures on the CMS website.

2015: An Independent Payment Advisory Board is established and the bundled payment program is expanded.

2016: States are provided with a Federal Medical Assistance Percentage increase of 23% to permit the transition from the Children's Health Insurance Program to health insurance exchanges.

2017: Employers with more than 100 employees are allowed to enter the health insurance exchanges at the discretion of the states.


The authors made no disclosures.