Health Care Cheat Sheets: Legal landmarks

These cheat sheets offer overviews of some of the most significant U.S. health care legislation, and visit our Health Care IT Policy Monitor for the latest news on payment updates.

Affordable Care Act | Antitrust | Fraud and abuse | HIPAA | MACRA | Promoting Interoperability (PI) Program for Medicare Hospitals | Two-midnight rule | Tax Cuts and Jobs Act of 2017

Affordable Care Act

The Patient Protection and Affordable Care Act, otherwise known as the ACA, is the comprehensive health care reform bill passed by Congress in March, 2010. The law reshapes the way health care is delivered and financed by transitioning providers from a volume-based fee-for-service system toward value-based care. Through a series of new programs, regulations, fees, and subsidies, the Act seeks to achieve a triple aim of better population health, lower per capita costs, and elevated patient experience.

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Antitrust

Health care reform has led to a surge in provider mergers and acquisitions, raising concerns about antitrust among the regulatory community. The Antitrust Division of the Department of Justice (DOJ) and the Federal Trade Commission (FTC) are responsible for separating anticompetive, cost-raising collaborations from procompetitive, efficient ventures. In order to minimize the likelihood of antitrust litigation, providers must often demonstrate that their organization has substantial clinical and/or financial integration.

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Health care fraud and abuse

Combatting health care fraud and abuse is a high priority for the federal government. Although the true cost of Medicare and Medicaid fraud and abuse violations is unknown, estimates range from $65 to $98 billion dollars for 2011. The government uses an arsenal of legal tools to combat health care fraud and abuse, including strict fraud and abuse laws, civil and criminal penalties for violations, and exclusion from participation in federal health care programs.

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HIPAA

The Health Insurance Portability and Accountability Act (HIPAA) addresses several significant issues for the health care industry, including insurance portability, fraud and abuse issues, and notably, privacy and security of health information. Congress enacted HIPAA in 1996, and the legislation’s focus on protecting the privacy and security of health information has had a resounding impact on modern health care delivery.

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MACRA

In April 2015 the Medicare Access and CHIP Re-Authorization Act (MACRA) was signed into law, mandating several critical updates to Medicare provider payment effective January 1, 2019 and repealing the SGR formula, which has been used for many years to control spending by Medicare on physician payments. It also stipulates the development of two new payment tracks: the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APM).

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Promoting Interoperability (PI) Program for Medicare Hospitals

CMS overhauled the Medicare and Medicaid EHR Incentive Programs (also known as Meaningful Use [MU]) in the 2019 Inpatient Prospective Payment System (IPPS) final rule. The MU program was renamed the Promoting Interoperability (PI) Programs, which focuses on information exchange between providers and electronic access to health information for patients.

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Two-midnight rule

The controversial two-midnight rule—included in Medicare's Inpatient Final Rule for 2014—assumes a hospital admission to be appropriate for payment if a physician expects a beneficiary's treatment to require a two-night hospital stay and admits the patient under that assumption. According to the rule, shorter inpatient stays should be billed as outpatient visits under Medicare Part B.

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Tax Cuts and Jobs Act of 2017

In Dec. 2017, the Tax Cuts and Jobs Act of 2017 (formally named “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018”) was signed into law. The Act changes the tax code in many ways that affect health care and a broad swath of other industries, including a permanent reduction in the corporate tax rate from 35% to 21%. It also includes reductions to individual tax rates that are scheduled to expire in 2026.

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