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If The Health Care Overhaul Goes Down, Could Medicare Follow?

A growing number of health experts are warning of potential collateral damage if the Supreme Court strikes down the entire 2010 Affordable Care Act: potential chaos in the Medicare program.

"The Affordable Care Act has become part and parcel of the Medicare system, encouraging providers to deliver better, more integrated, better coordinated care, at lower cost," says Judy Feder, a public policy professor at Georgetown University and former Clinton administration health official. "To all of a sudden eliminate that would be highly disruptive."

Sara Rosenbaum, a professor of health law and policy at George Washington University, puts it a bit more bluntly: "We could find ourselves at kind of a grand stopping point for the entire health care system."

And it's not just Democrats warning of potential problems. Gail Wilensky, who ran Medicare and Medicaid under President George H.W. Bush, says she doesn't think it's likely that the court will strike down the entire health law. But if it does, she says, "it seems like it takes everything with it, including those aspects that are only very peripherally related to the expansion of coverage."

So why are experts so worried?

One reason is that the law changed the payment rates for just about every type of health care professional who treats Medicare patients. Every time Medicare sets a payment rate, it needs to cite a legal authority. And for the past two years, says Rosenbaum, that legal authority has been the Affordable Care Act.

So if the law is found unconstitutional, she says, every one of those changes "doesn't exist anymore because the law doesn't exist."

And the result? "You have agencies sitting on two years of policies that are up in smoke," she says. "Hospitals might not get paid. Nursing homes might not get paid. Doctors might not get paid. Changes in coverage that have begun to take effect for the elderly, closing the doughnut hole might not happen. We don't know."

And many of those facilities serve not just Medicare patients but the rest of the population, too. Hence, the spillover could affect the health care system as a whole.

That's what has the nation's community of health care providers watching nervously to see what the court does. Many would speak only on background or wouldn't address the subject at all.

One of the few groups willing to address the subject was the American Medical Association. In a statement, the AMA's president-elect, Jeremy Lazarus, says, "With the countless hours of work already done to implement this new law, it is hard to imagine the full impact of it disappearing."

At best, the situation would be legally murky, says Dan Mendelson. He's CEO of the health consulting group Avalere and oversaw health programs for the Clinton administration's Office of Management and Budget.

"In a lot of ways, it's a political never-never land," he says. "We have no idea really what this would look like because we don't have a precedent."

Actually, says Wilensky, there is a bit of a precedent: For the past few years, Congress' inability to fix a glitch in the formula for paying doctors for Medicare has more than once resulted in brief lapses in funding authority.

"So we've had these kinds of smaller-version 'what happens if Congress does or doesn't do something.' This would be much bigger. And it would be extremely disruptive," she says.

Rosenbaum says there could be an even bigger problem: Medicare might be looking at hundreds, if not thousands, of policies that are suddenly null and void. She says it's not at all clear that the agency has the authority to go back to the policies that were in effect before the law was passed.

"This is a conversation that's happening between the Supreme Court and Congress," she says. Medicare officials would "have to sit there and wait to see what Congress wants to do."

What makes it an even bigger potential mess, says Mendelson, is that the health law has fundamentally changed almost every aspect of the way the Medicare program now does business. And undoing that would be almost unimaginably difficult.

"I think it's more akin to Alice in Wonderland," he said. "That we're going down the rabbit hole and nobody really knows what it's going to look like inside."

But in the next few months, they may find out.

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