Growing Pains

Changes in healthcare and employment law have far-reaching consequences

By Claude Solnik
The Daily Record Newswire

LONG ISLAND, NY - The healthcare industry for the past few years has been in a constant state of flux, even emergency, as the Affordable Care Act remakes the rules. And 2015 was no different.

The big got bigger as hospital systems grew and insurers sought to merge. Solo practitioners struggled. And the ACA went through growing pains, as one insurer shut down, proving a boon for some others. Efforts to overturn the act failed. Healthcare, meanwhile, continued to transform.

Their day in court

After a lot of debate and discontent, critics of the ACA finally got their day - in U.S. Supreme Court. Actually, it was the second time. Those seeking to overturn the ACA argued in King v. Burwell that tax subsidies were unconstitutional in federal exchanges. The court by a 6 to 3 vote disagreed.

President Barack Obama hailed the decision to uphold the program as a sign that the ACA "is here to stay." Healthcare providers seemed happy that the cloud of uncertainty had, if not lifted, become less immediate. Key Republicans, however, vowed to fight on.

The decision by the court may have said as much about the court as about the ACA, which many dubbed Obamacare, synony- mous with the president and his policies.

Chief Justice John Roberts, who was appointed by President George W. Bush, voted to uphold the law for the second time. He in 2012 also supported the ACA, surprising some who thought he would side with critics of the legislation.

Roberts said the ACA was designed "to improve health insurance markets, not to destroy them."

Critics of the ACA argued that subsidies should only be allowed at state, not federal, exchanges. But Roberts said that would undermine the market and send it "into a death spiral."

What work is

If Bill Clinton minced words when he was accused of abusing his power and perjuring himself regarding an intern, companies in 2015 found themselves trying to figure out something that would otherwise be considered intuitive: Who exactly was an employee?

The ACA in 2015 mandated that firms with 50 or more employees provide appropriate health insurance. But it wasn't so easy to figure out who was considered an employee for purposes of the ACA.

"In general, the employer is responsible to offer coverage to full-time employees," Jill Bergman, vice president of compliance at the health and benefits division of Chernoff Diamond in Uniondale, said of firms with 50 or more employees. "The question is who's a full-time employee?"

Determining who qualifies as full-time not only caused confusion, but fueled a growing ACA consulting industry.

Employees working 30 hours a week or 130 hours a month generally are considered full-time, although firms could use different look-back periods to calculate hours.

Things were only going to get more complicated as the mandate continued to grow. Companies with 100 or more employees must insure at least 70 percent in 2015 and 95 percent by 2016.

Employers with 50 to 99 employees by 2016 must provide coverage to "substantially all" or 95 percent of employees.

Those with fewer than 50 employees, however, aren't mandated to offer affordable coverage. Who said being bigger is better?

Insurance policy

Hospital systems weren't the only ones getting bigger. Insurers grew or sought to merge, sometimes sparking concern among doctors. North Shore-LIJ's Care Connect insurance operation grew. But planned mergers got some doctors' hackles up.

The American Medical Association and the Medical Society of the State of New York are opposing major insurance mergers as likely to sap competition and lead to higher rates and narrower physician net- works across much of the nation.

The Chicago-based AMA said approving the merger of Anthem (the parent of Empire Blue Cross/Blue Shield) and Cigna as well as Aetna and Humana could have a detrimental impact on consumers and physicians.

"A lack of competition in health insurer markets is not in the best interests of patients or physicians," AMA President Dr. Steven Stack said in a written statement.

The Lake Success-based Medical Society of the State of New York chimed in with its own concerns that these mergers could lead to anti-trust problems in New York and other states.

"Undoubtedly, the mergers of Anthem with Cigna and Aetna with Humana will give these companies far greater market power to reduce physician and hospital choice for our patients," said Dr. Joseph Maldonado, Jr., president of the state society.

Here today, gone tomorrow

While some insurers marched to the tune of expansion, others faced the music. When Health Republic, one of New York's newest health insurers, declared bankruptcy, it left many New Yorkers in need of insurance and multimillion-dollar losses for Long Island providers.

Southampton Hospital estimated it will face a $1 mil- lion loss from the Health Republic bankruptcy if there is no relief.

"I don't know if there is going to be relief or not," said Marsha Kenny, a Southampton Hospital spokeswoman. "A million dollars for a community hospital is significant."

Although the North Shore-LIJ Health System has no contracts with and did not participate in the network of Health Republic, it served roughly 1,000 Health Republic patients, primarily facing emergencies.

The New York State hospital industry estimated providers were owed $160 million in outstanding claims with numbers continuing to rise, according to the Nassau-Suffolk Hospital Council.

"This is an unfortunate situation for all," said Kevin Da- hill, CEO of the Suburban Hospital Alliance of New York State, which includes the Nassau-Suffolk Hospital Council.

Jason Samel, president of JayMar Insurance Agency in Glen Cove, said he helped place roughly 1,000 individuals in insurance plans with a wide range of companies, including Health Republic.

He said the Health Republic bankruptcy leaves him with $20,000 in unpaid commissions, as brokers see commissions stop or shrink.

Generic gold

There was gold in the healthcare hills for some firms. The seventh biggest maker of generic pharmaceuticals in the nation based on prescription volume, Amneal Pharmaceuticals with operations in Brookhaven and Hauppauge, was on a roll.

As drug patents expire, companies like Amneal jump in with generics to fill the gap in a huge financial free-for-all. "There are plenty of products coming off patents over the next five years," Amneal Co-CEO Chintu Patel said. "And there are complex products where generics haven't entered."

Long Island is ground zero for the generic drug industry with firms such as A & Z Pharmaceutical, Contract Pharmacal, LNK International and InvaGen, all in Hauppauge. Ascent Pharmaceuticals is based in Central Islip.

Amneal invests $150 million in research and development, developing new generics to grow market share.

"The generics pharmaceutical industry is doing extraordinarily well nationwide," said James Manicone, partner at JM2 Architecture in Farmingville, working on projects for Amneal and other generics makers. "It's doing extraordinarily well on Long Island. In my estimation, it's the epicenter of R&D for the generics industry."

New name

After growing to 21 hospitals by adding Maimonides Medical Medical Center and Peconic Bay Medical Center, North Shore-LIJ decided it was time for a new name to match its new identity. The system geared up for a multi- million-dollar campaign to rebrand as Northwell Health.

"This will be tens of millions of dollars over time," CEO Michael Dowling said of marketing the new name. "We're going to start in January. This will consist of a new rebranding. We have not been branding the system over the last year or two or three. In anticipation of a new name, we have been relatively silent in the marketplace."

The system, which has been working with Interbrand and J. Walter Thompson, narrowed 600 names to 15 and finally two, before settling on Northwell, meant to emphasize wellness and a wider geographic reach.

"The biggest issue was coming up with a name that could be acceptable to everybody," Dowling said. "Everybody likes different names."

He said it's likely to take one or two years to change signs, although hospitals would retain their name, simply becoming members of Northwell Health.

"Changing a name is a big task," Dowling said. "It's not one of those easy things that you do. It takes time, and we recognize this. It's not something that necessarily automatically will be accepted overnight."

Published: Wed, Dec 30, 2015

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