Hospitals Struggle With ACA Challenges


Following the introduction of the Affordable Care Act (ACA) in 2010, the healthcare sector underwent significant transformation more than what was previously imagined. Past healthcare practices, roles, and nursing managed have changed for healthcare stakeholders. Under the Act, the most affected element is the financial issue of the US healthcare system (Brown & McBride, 2015). The Act is formulated to enhance sharing with regard to risks, savings, and relationship building among healthcare stakeholders. In addition, tens of million persons have already joined the healthcare insurance through the Act, and healthcare facilities are expected to meet increasing demands in the coming years (Obama, 2016). In this regard, the new system has brought about come financial issues, specifically affecting reimbursement and payment models.

How Financial Issues are Causing Changes in Reimbursement and Care Delivery Models

The ACA advocates for accountable care organizations (ACOs) and shared or bundled payment in which quality care is rewarded. Various payment models have and will continue to have significant effects on hospital revenues in both positive and negative ways (Barlas, 2014).

The Act has improved hospital consolidation and closures (Barlas, 2014). Conversely, hospitals have noted declining operating margins and slow income growths, which are critical issues affecting quality healthcare delivery (Barlas, 2014). Particularly, hospitals have received low reimbursement from payers. Nevertheless, the number of patients who require quality care, specifically for chronic diseases, has abruptly increased. The growth in the US is evident, but many healthcare facilities continue to run with lean and lessening margins (Barlas, 2014). It is observed that only few hospitals have been able to realize some positive financial growths.

Financial Issues: Reimbursement Rates are Inadequate

Low and delayed Medicaid reimbursement rates have now hit many hospitals, which are now major challenges to healthcare providers (Holtrop et al., 2015). Notably, many physicians tend to avoid Medicaid because of low rates of reimbursement. Furthermore, care providers have also raised the issue of rising costs of administration, but no adequate provisions to control these constraints related financial difficulties among hospitals. Issues are commonly mentioned in delayed payments and claim rejections, for example, because of incorrect completion of the billing request form, failure to confirm patients’ entitlement, lack of preauthorization approvals for some services, and other complex rules and regulations that affect claim fillings.

Financial Issues: Fines

The Act has introduced a healthcare system that puts much pressure on performance and penalties (Joynt & Jha, 2012). Under the Act, mandates, fines, and bonus payments are constituents of the compliance and regulatory standards expected from hospitals. While the number of fined healthcare facilities remains unclear, many hospitals have been fined under the provision of the Hospital Readmissions Reduction Program (HRRP) (Joynt & Jha, 2012). The most affected hospitals were mainly found in low-income areas. When these penalties are taken into account and the reduction of Medicaid Disproportionate Share Hospital (DSH) payments, healthcare providers now face serious declines in their revenues, but instantaneously strive to improve quality of care to meet or maintain the ACA’s standards. Notwithstanding these penalties, Medicare reimbursement will decline.

Employee Recruitment and Retention

The new pay-for-performance practices have generally influenced hiring and retention of nurses and physicians (Darkwa et al., 2015). Quality scores are linked to hospitals reimbursements, and poor scores subsequently lead to reduced reimbursement and low budgets. This means that facilities may not operate optimally with limited budgets. Additional stress and financial losses are sources of threats to recruitment and retention of nurse and physicians. Further, nurses now experience additional cases of burnout and increased dissatisfaction with their jobs. Nurse shortage is expected to persist because of regulatory burdens in hospitals. In the meantime, workplace stress also increases as few nurses and physicians are expected to provide quality care to a growing number of patients. Researchers have shown that low revenues often lead to poor recruitment and retention of nurses (Darkwa et al., 2015).

Expected Investments

Under the Act, healthcare facilities are required to make strategic investments in their main operations to enhance the quality of healthcare technologies, quality of care and performance, infrastructure and data management (Rosenbaum, 2011).

Most importantly, healthcare records are now critical for shared savings and costs. While the electronic Health Records (EHRs) contain patient data, and they are linked with Health Information Exchanges (HIEs), EHRs may lack sufficient patient information to cater for various needs of all stakeholders. Facilities need more financial resources to invest in robust solutions to capture adequate data and manage quality of care. Claim data from payers have relevant information about patients and associated costs of care delivery. Nevertheless, providers lack robust systems to capture all data. In many instances, hospitals may fail to participate in all episodes of care delivery and cost issues.

Decreasing Earnings

The decline in hospital incomes and profits continues to be the major emerging challenge for hospitals (Barlas, 2014). Low incomes and profits have been linked to penalties associated with the failure to comply with the Hospital Readmissions Reduction Program (HRRP) and the Hospital-Acquired Conditions Reduction Program, as well as the Medicaid Disproportionate Share Hospital (DSH) payments (Joynt & Jha, 2012). Consequently, hospitals now experience financial constraints and budget cuts with potential negative impacts on management and investments. Likewise, healthcare facilities are anticipated to increase quality of care and meet new ACA requirements.

Hospitals should focus on these programs to ensure compliance with different regulations to avoid penalties and manage costs to meet their budgets.

Emerging Risks and Compliance Issues: More Regulations

The healthcare sector is among the most regulated sectors in the US. Although new regulations may be introduced with the best intention (Obama, 2016), in practice, they negatively impact care delivery to patients and reduce patient-physician time. Unfortunately, the Act has increased more regulations for nurses and physicians.

Specifically, these new regulations have introduced new red tape to physicians. For instance, physicians now do not spend much time with their patients, which ultimately lead to poor service delivery to patients.

It is recommended that all new regulations should be patient-centered and the quality of reporting should improve in order to allow physicians to eliminate bureaucracy in their work.

Quality Healthcare Risks

The healthcare system in the US is based on the foundation of quality of care, and physicians and nurses have incessantly endeavored to improve practices and deliver optimal care for patients, but with mixed outcomes. The ACA model was developed on the idea of offering quality of care by moving medical professionals from the fee-for-service model of health care reimbursement to pay-for-performance, which rewards quality of care standards achieved by physicians.

Nevertheless, some unpremeditated outcomes now threat the quality of care delivery that many regulations have sought to advance. For example, the declining earnings, penalties, low rates of reimbursement, more workload, staff layoffs or shortage, and inadequate resources are now major sources of concerns for the healthcare system (Barlas, 2014).

Compensation in Shared Programs

The Medicare Shared Savings Program (MSSP) includes MSSP ACOs, a quality-based physician compensation model. However, waivers are offered for hospitals not signed under ACO participation. This compensation should comply with Stark provision, the Anti‐Kickback Statute and CMPs. All these depend the arrangement of the fair market value and commercially reasonable principles.

The current approach focuses on physicians’ compensation based on quality care delivered. Nonetheless, a recent study has shown that important statistical uncertainty lies in the MSSP, which may result in incorrect payments (DeLia et al., 2012). It is recommended that ACO payment model should be analyzed and improved to remove any uncertainty in order to ensure efficiency and right compensation.

Additional Fines

The Act encourages cost-saving practices to improve healthcare and outcomes. Therefore, various programs have been developed and implemented for possible reimbursement reduction. They are CMS’ Hospital Readmissions Reduction Program and the Hospital-Acquired Conditions Reduction Program among others (Barlas, 2014; Joynt & Jha, 2012). Regrettably, many healthcare facilities still struggle to meet these standards set under the Act. As such, fines are imposed for noncompliance. Each year, thousands of hospitals incur penalties associated to these programs. As previously observed, these penalties affect financial status and budgeting of hospitals. Furthermore, these penalties have discouraged physicians from joining hospitals and, thus, they affect staff recruitment and retention negatively.

How Nursing will evolve to Take Leadership Roles and Affect Change: Less Restrictions

The existing requirement related to the scope-of-practice is additional barrier to nursing evolution and growth (Dyess et al., 2016). By removing such barriers, nurses would practice to their full potential, acquire proficiency, and leadership skills.

Improving Nurse Education

Nursing education would assist nurses and physicians to address leadership skills. Nurses, therefore, are encouraged to assess what specific skills, knowledge, and abilities are needed to advance and lead the profession in the future (Dyess et al., 2016). Hence, nurses should plan leadership and develop it to account for current and future leadership needs at all levels.


Interprofessional and intraprofessional collaborations are effective for the nursing profession because nurses work in multidiscipline environments with many professions (Dyess et al., 2016). In this instance, nurses would aim to ensure effective collaboration and communication among health professionals with the goal of improving the quality and safety of patient care.

Work Environment Changes

Nursing profession should concentrate on improving work environments. Current nurse leaders should aim to reduce work overloads, staffing shortage, burnout and other related challenges for nurses. This strategy could assist the profession to reduce high staff turnover rate and costly recruitments (Darkwa et al., 2015).


While reforms are intended to improve quality of outcomes, some unintended outcomes are noticed. For instance, the Affordable Healthcare Act aims for increased access to healthcare services, but financial challenges have emerged. These challenges affect nurse and physician practices, which ultimately hinder care provision. Hospitals should adopt best practices to improve quality of care.


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