Health IT Leaders Divided On Supreme Court Decision

Ruling to uphold Affordable Care Act validates health IT efforts, but a decision against it would not have slowed momentum of healthcare industry's transformation, say some observers.
25 CIOs Who Are Transforming Healthcare
25 CIOs Who Are Transforming Healthcare
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Observers are divided on how big a win the U.S. Supreme Court's decision to uphold most provisions of the Patient Protection and Affordable Care Act (ACA) will be for health IT. Although they agree that the decision is a validation of the ACA provisions that affect health IT, they disagree on whether an adverse High Court decision would have had a big impact.

The HITECH Act, not the ACA, authorized the federal government's $27 billion incentive program for the Meaningful Use of electronic health records. But the ACA itself includes numerous components that affect health IT, including:

-- The Centers for Medicare and Medicaid Services' shared-savings program for accountable care organizations, which need advanced IT systems.

-- CMS' bundled payment pilot, which involves hospitals and physicians.

-- Other tests of innovative health care financing and delivery methods.

-- A value-based purchasing program for hospitals.

-- Quality reporting initiatives.

-- The comparative effectiveness research program.

-- State health insurance exchanges.

-- Administrative simplification requirements that involve standardization of rules for provider-health plan interactions.

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Bruce Merlin Fried, a healthcare attorney with SNR Denton in Washington, D.C., who is an expert on health IT, told InformationWeek Healthcare that the Supreme Court decision "means that implementation [of the ACA] will proceed apace. All of the activity we've seen--organizations ramping up and positioning themselves to implement the law when it is fully effective a year and a half from now--will continue. The biggest users of HIT--hospitals and physicians--will continue to move ahead aggressively. So for health IT, that's a good thing."

If the Supreme Court had found the reform law unconstitutional, "it would have thrown the entire healthcare system into chaos, as everyone tried to understand the implications," said Fried. "And in a situation of chaos, CFOs stop spending money until they know what's happening."

Steve Bernstein, head of the healthcare law practice of McDermott Will & Emery firm in Boston, took the opposite view. "If the law had been struck down entirely, I don't think it would have mattered," he said. "I think there would have been a momentary pause by providers and health plans to see what was going to happen. But the market has driven this [reform] effort for two years now."

During that period, Bernstein explained, health plans and employers have been demanding that providers rein in cost growth by emphasizing health maintenance and prevention to avoid the need for acute care in high-cost settings such as hospitals. Those efforts require a robust IT infrastructure, but most providers have been building that for the past five years. So the Supreme Court decision, he said, is really a "validation of prior activity."

Jordan Battani, managing director of the CSC Global Institute for Emerging Healthcare Practices, agreed with Bernstein on how the decision affects healthcare providers.

"As far as the transformation that's underway in how care is organized, delivered and paid for, this decision was kind of a sideshow for folks who are working on that part of the transformation," she said. "Even if the Supreme Court had invalidated the whole ACA, there would still be enormous pressure on the provider sector. This wouldn't have changed anything."

Many health IT aspects of this trend, she said, aren't even addressed in the ACA and are being driven by the private sector. As for areas such as payment bundling and value-based purchasing, she noted that if the ACA had been struck down, CMS would have had to find some alternative to control costs.

Nevertheless, Battani expects the High Court ruling to be a wake-up call for health plans that have been dragging their feet on making the changes required to comply with the ACA. For example, now that it's clear that the state exchanges will go forward, she said, insurance companies will have to invest considerable sums in revamping their back-end systems so they can interact with these exchanges.

In Fried's view, the Supreme Court ruling will accelerate the formation of health insurance exchanges in many states. "Some legislators and state insurance commissioners in states that were not moving ahead said it was because of the uncertainty of the law's constitutionality. That has now been resolved."

Only 33 states have received money to set up insurance exchanges, and just 15 of them have actually started work on them. Nevertheless, with the Supreme Court decision removing the cloud over the exchanges, Fried expects most states to have them or be setting them up by 2014. This will create a lot of work for health IT firms, not only to create and support the exchange websites, but also to build connections between them and the state and federal agencies from which they must obtain data.

In addition, Battani noted, both plans and providers will have to address the ACA's administrative simplification requirements, which apply to areas such as eligibility, claims status, electronic funds transfer, and electronic remittance advice. The standards that this provision authorizes will fine-tune the HIPAA 5010 transaction set so that data can flow back and forth more smoothly between providers and insurers, she explained.

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