What ob/gyns need to know about health policy in 2014


Although the passage and politics surrounding implementation of the ACA have been tumultuous, it seems certain for now that the law will stand at least until 2016 if not permanently and our practices will have to change, in some ways for the better.

Dr. Gee is Assistant Professor, Louisiana State University Departments of Health Policy and Management and Obstetrics and Gynecology, Schools of Public Health and Medicine, New Orleans.


The field of obstetrics and gynecology has swiftly evolved to keep pace with new forms of healthcare delivery. While in the past, ob/gyns practiced independently, today many have salaries and most practice in group settings. We employ physician extenders more than ever and share vaginal deliveries with midwife colleagues. Alternatives to major surgery such as hysterectomy have expanded, and as surgical volumes have declined the complexity of the technology we use has increased.

Many of our patients are actively engaged in decisions and want evidence justifying our recommendations. Furthermore, our decisions and the outcomes of our care are being measured and reported to health plans, state governments, and the public.

Electronic medical records (EMRs) have in some ways made ob/gyn practice easier, but in many settings, the systems have only served to complicate workflows. With the implementation of the Affordable Care Act (ACA) our field has a new set of challenges. To overcome them we must be more innovative in our practice patterns, integrate evidence in all that we do, and be more imaginative about our care teams and locations.

Affordable Care Act

The ACA was passed in 2010 but has been rolled out in phases. It is the most dramatic shift in access to insurance coverage since Medicare and Medicaid were enacted in 1965. Millions of Americans have already gained insurance coverage and millions more will be entering the insurance market this year. Several key provisions have already affected our profession. Most notably, starting in September 2010, young adults up to age 26 were able to join their parents’ insurance plans-resulting in 3 million young adults of reproductive age gaining coverage.1

When fully implemented, ACA is expected to increase by more than 30 million the number of Americans with health insurance.


The main drivers of this broader expansion are increases in Medicaid eligibility and tax credits for private health plan coverage through health insurance exchanges that will take effect this year.

What are the benefits of these changes to ob/gyns and their patients?

What benefits might we see in our practices from the millions of Americans being covered by insurance? Ultimately, health insurance increases access to care, which can lead not only to higher use but also to reduced morbidity and mortality.3 A recent study by Sommers et al found that young adults who gained coverage by staying on their parents’ plans had fewer delays or gaps in care.4 Another study looked at the impact of gaining insurance through an insurance lottery in Oregon.5 It found that Oregonians who gained Medicaid coverage had 40% more emergency department visits than those who did not.

This means that Americans use more healthcare and have unprecedented access to our offices and facilities. We are going to need to decide how we juggle all these new patients-what core services we will continue to perform, and who we will need to transition to care by our physician extenders because of limited capacity. We will also need to become savvier about using EMRs to enhance patient outcomes and provide data required by contracts with payers.

We will need to understand the advantages and disadvantages of new health plans and determine whether to join new plans offered through the public and private exchanges-because accepting them will mean more patients and potentially lower reimbursement. That may mean extending office hours and adding staff.


What will be the impact of individual mandates?

The major ACA-related change in 2014 is insurance expansion. This year, however, also marks the start of tax penalties to be levied against those who go without insurance for 3 or more consecutive months. The penalty for not having insurance in 2014 will be calculated in 1 of 2 ways and Americans will pay whichever is higher:

1% of yearly household income. The maximum penalty is the national average yearly premium for the plan that is the most inexpensive (Bronze plan) offered through the exchange in the state in which the individual lives

$95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

Every year this fee will increase. In 2015 it will be 2% of annual income or $325 per person. In 2016 it will be 2.5% of income or $695 per person. The penalties will then be adjusted for inflation. For those who are uninsured for part of the year, 1/12 of the total annual penalty applies to each month of non-insurance for those who go without insurance for 3 consecutive months or more.6

What is the status of employer mandates?

Ninety-five percent of US businesses have fewer than 50 employees. Under the ACA, only businesses with 50 or more employees are mandated to provide insurance. Initially, penalties were going to be levied in 2014 against business with 50 or more employees who failed to provide employees with insurance. This timeline has been pushed back, and most recently mid-sized businesses that employ 50 to 99 full-time workers were provided a 2-year extension. These employers will not be fined for failing to provide coverage until 2016.

Larger businesses (employing 100 or more full-time workers) will be subject to the mandate beginning January 2015. However, for 2015 they need to provide coverage to only 70% of their workers, ramping up to 95% by 2016.  

Effect of ACA on health plan coverage and costs

Also in 2014, new protections for patients will be put in place that impact insurance coverage. Insurance companies will be prohibited from denying coverage or refusing to renew a policy to an individual with a pre-existing condition. The law stipulates that in the individual and small group markets, companies cannot charge higher rates due to gender. Plans also will be unable to impose annual limits on the amount of coverage for services that an individual with that plan will receive.

Finally, for individuals enrolled in a clinical trial, insurance companies will be unable to drop or limit coverage because of participation in the trial. These changes will be unlikely to impact ob/gyn practice to a great degree, but they will likely allow women greater access to insurance coverage and thus increase demand for ob/gyns.

Several provisions of the ACA that went into effect on January 1, 2014 will impact insurance affordability. Although individuals are penalized if they do not purchase coverage, tax credits were put in place for people with incomes between 100% and 400% of the poverty line (in 2010, 400% of the poverty line was approximately $43,000 for an individual or $88,000 for a family of four) to facilitate purchase of insurance through the exchanges. The law also helps families control healthcare costs by establishing reduced cost sharing (deductibles) for key services important to women’s health, such as preventive visits, breast pumps, contraception, and screening for sexually transmitted illnesses.

For small businesses who would like to offer health insurance, the ACA implements the second phase of the small business tax credit for qualified businesses. This credit is up to 50% of the employer’s contribution to provide health insurance for employees.

For Americans who earn less than 133% of the poverty level (approximately $14,000 for an individual and $29,000 for a family of four) and who live in states that have chosen to expand Medicaid, coverage will also be available. States that choose to expand will receive 100% federal funding for the first 3 years and 90% federal funding thereafter. Prior to the ACA, federal funding for Medicaid was dependent on a state’s income levels and ranged from paying around 50% of costs for Medicaid up to a maximum of about 80% in the poorest state-Mississippi.

The ACA’s public health exchanges offer plans that are grouped into 1 of 4 tiers based on cost and coverageBronze, Silver, Gold, and Platinum. Although there are essential benefits that must be covered by all plans, the tiers vary both by additional services covered as well as cost sharing required of the individual.

The marketplaces are supposed to be fully operational in 2014 but significant glitches in enrollment and other core systems during the 2013 enrollment period suggest that multiple delays will be encountered-particularly in states that rely solely on the federal government for creation of their exchanges.


Value-based payments

The ACA-related changes previously described  are those likely to have the greatest near-term impact on ob/gyn practice overall. For those of us whose practices are small businesses, ACA also affects our ability to provide insurance for our workers. Beginning in 2015, new payment provisions that apply to all ob/gyn practices will link payments to quality of care. Physicians who are able to demonstrate better outcomes will receive higher payments than their colleagues who cannot demonstrate improved outcomes.

Although these provisions will initially only affect Medicare, the shift is likely the policy wave of the future for all healthcare payments. Rather than simply paying for each service (fee-for-service), payers are more interested in paying for value and outcomes. Practices are likely to reorganize more creatively around physicians operating at the top of their training and to take advantage of payments available under ACA for nontraditional physician extenders such as care coordinators and for services like nutrition and tobacco cessation counseling.

Outcomes-based payments

By 2015, we should also see new payment methodologies based on outcomes, such as shared-savings models, patient-centered medical homes, and bundled payments, increasingly replacing fee-for-service models. One of the first areas in which private insurance companies are focusing is lowering the number of low-risk cesarean deliveries to nulliparas and non-medically indicated elective deliveries.

Wyoming Medicaid has stopped paying for all elective deliveries with no medical indication. South Carolina Blue Cross and Medicaid and Texas Medicaid do not pay for elective deliveries before 39 weeks. Thus far, private industry has focused more on payment incentives for primary care providers than on ob/gyns. One example is Cigna’s collaborative accountable care program, which uses primary care providers and nurse care coordinators. These initiatives are in 17 states and involve more than 4000 physicians.7

Because the field of quality measurement in ob/gyn is newer, we will have more challenges in using EMR data to demonstrate better outcomes. However, efforts like ACOG’s reVITALize, which last year defined a new measurement strategy for both obstetrics and gynecology, will help lead the way.8

In 2014, traditional fee-for-service programs will coincide with new payment methodologies. Given that this is a transition period on payment, physicians may have various revenue streams linked to a variety of payment methodologies. Initially, payments will likely increase as a result of quality measurement programs, but over time, those who do not know their own data may fall behind the curve. Sophisticated IT systems, data-reporting, and shared networks will be a fundamental requirement of practices in 2014 and beyond.


Mass HIway

In January, the State of Massachusetts launched the Massachusetts Health Information Highway (Mass HIway), a health information exchange that can be used by both Massachusetts Medicaid and private insurers to implement bundled payment and enables clinicians to directly submit information on immunizations, cancer care, and other public health monitoring data from their EMRs.9

Massachusetts is ahead of many states in sharing data with other providers, the public, and payers, but greater transparency on outcomes is a policy trend that is not going away.

Increased interactivity

In 2014 we will see more of a push to move care out of the physician’s office and hospital setting and make 24/7/365 care more available to patients in ways other than emergency department visits. This means that we should see creative ways emerge to pay us for our time on phone and email consults and we should also see a trend of more online, interactive health resources (think about how you do your online banking).


Although the passage and politics surrounding implementation of the ACA have been tumultuous, it seems certain for now that the law will stand at least until 2016 if not permanently and our practices will have to change, in some ways for the better.10 One thing is certain: There will not be a time of more dynamic increase in the number of Americans gaining health care in our careers.



1. Sommers BD. Number of young adults gaining insurance due to the Affordable Care Act now tops 3 million. Washington (DC): Department of Health and Human Services; 2012.

2. Congressional Budget Office. Letter to the Hon. Nancy Pelosi.


. Accessed February 13, 2014.

3. Hadley J. Sicker and poorer-the consequences of being uninsured: A review of the research on the relationship between health insurance, medical care use, health, work, and income. Med Care Res Rev. 2003;60(2 Suppl):3S–75S; discussion 76S–112S.

4. Sommers BD, Buchmueller T, Decker SL, Carey C, Kronick R. The affordable care act has led to significant gains in health insurance and access to care for young adults. Health Aff. (Millwood) 2013;32:165–174.

5. Taubman SL, Allen HL, Wright BJ, Baicker K, Finkelstein AN. Medicaid Increases Emergency-Department Use: Evidence from Oregon’s Health Insurance Experiment. Science. 2014;343(6168):263–268.

6. Health reform in action. http://www.whitehouse.gov/healthreform. Accessed January 30, 2014.

7. Cigna Network News. Cigna’s approach to collaborative accountable care. July 2012. www.cigna.com/customer_care/healthcare_professional/newsletters/July2012/feature-cac. Accessed August 4, 2013.

8. American Congress of Obstetricians and Gynecologists. ReVITALize. www.acog.org/About_ACOG/ACOG_Departments/Patient_Safety_and_Quality_Improvement/reVITALize. Accessed January 10, 2014.

9. Mass.gov. Governor Patrick Launches Next Phase of ‘Mass HIway’ Health Information Exchange to Help Reduce Costs and Save Lives. www.mass.gov/governor/pressoffice/pressreleases/2014/0108-next-phase-mass-hiway.html. Accessed January 10, 2014.

10. Deloitte. Deloitte 2013 Survey of U.S. Physicians. Physician perspectives about health care reform and the future of the medical profession. www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/us_chs_2013SurveyofUSPhysicians_031813.pdf. Accessed August 1, 2013.


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