HCA Holdings 2012 Annual Report Download - page 37

• how many previously uninsured individuals will obtain coverage as a result of the Health Reform Law
(based on the CBO’s February 2013 estimates, by 2022, the Health Reform Law will expand coverage
to 27 million additional individuals);
• what percentage of the newly insured patients will be covered under the Medicaid program and what
percentage will be covered by private health insurers;
• the extent to which states will enroll new Medicaid participants in managed care programs;
• the pace at which insurance coverage expands, including the pace of different types of coverage
expansion;
• the change, if any, in the volume of inpatient and outpatient hospital services that are sought by and
provided to previously uninsured individuals;
• the rate paid to hospitals by private payers for newly covered individuals, including those covered
through the newly created Exchanges and those who might be covered under the Medicaid program
under contracts with the state;
• the rate paid by state governments under the Medicaid program for newly covered individuals;
• the effect of the value-based purchasing program on our hospitals’ revenues and the effects of other
quality programs;
• the percentage of individuals in the Exchanges who select the high deductible plans, since health
insurers offering those kinds of products have traditionally sought to pay lower rates to hospitals; and
• whether the net effect of the Health Reform Law, including the prohibition on excluding individuals
based on pre-existing conditions, the requirement to keep medical costs at or above a specified
minimum percentage of premium revenue, other health insurance reforms and the annual fee applied to
all health insurers, will be to put pressure on the bottom line of health insurers, which in turn might
cause them to seek to reduce payments to hospitals with respect to both newly insured individuals and
their existing business.
On the other hand, because 43% of our revenues in 2012 were from Medicare and Medicaid, reductions to
these programs and changes to reimbursement methodologies may significantly impact the Company and could
offset any positive effects of the Health Reform Law. It is difficult to predict the size or impact of the reductions
to Medicare and Medicaid spending and other reimbursement changes resulting from the Health Reform Law
because of uncertainty regarding a number of material factors, including the following:
• the amount of overall revenues the Company will generate from Medicare and Medicaid business when
the reductions are implemented;
• whether reductions required by the Health Reform Law will be changed by statute or by judicial
decision prior to becoming effective;
• the size of the Health Reform Law’s annual productivity adjustment to the market basket;
• the amount of the Medicare DSH reductions that will be made, commencing in federal fiscal year 2014;
• the allocation to our hospitals of the Medicaid DSH reductions, commencing in federal fiscal year
2014;
• what the losses in revenues will be, if any, from the Health Reform Law’s quality initiatives;
• how successful ACOs will be at coordinating care and reducing costs or whether they will decrease
reimbursement;
• the scope and nature of potential changes to Medicare reimbursement methods, such as an emphasis on
bundling payments or coordination of care programs;
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