Payment companies predict chaos if Obamacare disappears

Amy Coney Barrett will assume a lifetime appointment on the Supreme Court, just as it prepares to hear a case on the Affordable Care Act that could toss years of advancement in health care payments into disarray.

The court is expected to hear arguments on the ACA, or Obamacare, in November, after the election. The Supreme Court has upheld challenges to the ACA before, but with a 6-3 conservative majority it’s more likely large parts of the law may be struck down. It’s unclear what would happen next, given the court doesn’t write law and additional legislation that redefines health care policy would need to pass a split government this year, or a new government in January.

“If they do overturn it, there will be tremendous amounts of uncertainty. You’ll have tens of millions of people thrown into limbo,” said Chris Byrd, an executive vice president of the health care division at Wex, a Portland, Maine-based payment company that supports fleet cards and also supports other business lines such as health care payments.

The ACA accelerated a trend toward consumers becoming more responsible for their health care insurance, and as such how they receive and pay health care bills. That has driven much of the advancement in health care payment technology development over the past decade, as fintechs build gateways that help health care providers automate payments to improve liquidity. New systems often tie digital billing to other functions at a medical office, such as patient onboarding.

These projects are based on the ACA being part of the mix, so adjustments would be needed if the ACA were to go away. The process for handling payments would be up in the air, perhaps immediately, creating a mix of state and federal rules that would govern forms, disclosure and billing.

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“A lot of the way the industry worked will be unraveled,” Byrd said. “You could see a migration back to employer plans and away from [ACA] exchange marketing. The real question is if there is a different framework that has to be rushed into place to change the ACA or replace the ACA, and how that would work and what it would look like.”

For a payment company that supports health care transactions, the strategy is to focus on digital onboarding and automation, which creates more flexibility for presentment, data management and payments than a paper-based system, Byrd said. It’s also possible the election could create a political shift that pushes health care policy leftward, toward a public option, for example.

“There may be opportunities if there is a new public framework for health care transactions and funding that could require us to facilitate payments. It’s hard to see around the corner,” Byrd said.

The potential change to the ACA comes as health care providers are already dealing with challenges in managing payments and billing for coronavirus treatment, where insurance coverage isn’t always clear. A flood of patients for non-coronavirus treatments with uncertain insurance status creates more confusion for billing.

“Hospitals will come out of this in a tough position,” said Mark Penserini, vice president of partner management at the Beaverton, Ore.-based Nvoicepay. "The ability to diversify revenue sources will be important … to turn the payment center into a revenue center instead of a cost center.”

The potential of the ACA to be revoked in whole or in part would set off a flurry of changes in how patients pay for health care, the relationship between health care providers, insurance companies and consumers, and create complications for employers in how they select and provide benefits for employees.

“With all of these changes that are going on at once, these health care organizations have to wrestle to be all the things they need to be,” said Bill Clausen, executive vice president of Westborough, Mass.-based Prelude Software, a firm that links payment technology to firms’ back-end systems. “The payment is often not seen as the major priority over other things that they have to think about.”

Some hospitals have put off back-office IT projects due to the economic crunch, while private health care practices are using point of sale financing to provide flexible payment terms for unexpected health care costs. The pressures of economic stress, insurance chaos and an ongoing pandemic will create a path to further digitize health care transaction processing and data management.

“Once you go digital, you are by definition more fluid,” Clausen said.

Even before the pandemic, the ACA created a need for small businesses to adopt digital processes, at least for benefits. Businesses with fewer than 50 employees are not subject to the ACA, but the Small Business Health Options Program provides a route for small businesses to participate. There’s also a relatively new Trump administration program that, ironically, allows small businesses to help employees participate in the ACA exchanges instead of providing group insurance.

These programs would face an uncertain future if the ACA were repealed and not immediately replaced, creating more confusion for businesses and employees that lends to uncertainty in how consumers can and should pay for medical care — and how health care providers can process payments.

“I don’t know if the ACA being overturned would have much effect on whether or not employers are able to offer these kinds of arrangements,” Bryd said, adding these types of individualized accounts that are distinct from the employer is a new phenomenon. “From a payment perspective, that’s a different fund flow.”

The pandemic and economic downturn have additionally posed myriad challenges to small businesses. In short order, these businesses have attempted to process supply chain transactions in a remote work environment and sought alternative funding to stay in business during lockdowns.

Adding complications to staff health coverage would create another economic challenge, according to Lil Roberts, CEO and founder of Xendoo, a Miami-based online accounting firm.

“From the employer perspective, it’s challenging to offer affordable medical plans,” said Roberts, who has said small businesses often struggle to put together the documentation to manage and apply for government programs, such as coronavirus stimulus loans.