This policy brief summarizes a discussion at AcademyHealth’s National Health Policy Conference in 2011 about the impact of the Affordable Care Act on the safety net.  Safety net providers have been identified by the Institute of Medicine as offering care to patients regardless of their ability to pay for services, with a substantial share of patients that are uninsured, on Medicaid, and other vulnerable patients.

Safety net providers are acutely aware that, in 2014, they will still be treating a substantial number of patients who do not have insurance. An estimated 23 million people will remain uninsured under the ACA.  Some of the uninsured will be exempt from the individual mandate.  Others may conclude that health insurance is unaffordable even with subsidies and may choose to pay a penalty instead of purchasing insurance.  And many undocumented immigrants will remain uninsured.

The Medicaid program is the largest single revenue source for safety net providers; but, in light of major budget deficits, states and the federal government are considering how to control Medicaid spending. In the fall of 2010, 39 states had implemented a provider rate cut or freeze for that year and 37 states planned spending cuts for fiscal year 2011. States have also narrowed the scope of Medicaid benefit packages. In fiscal year 2010, 20 states implemented benefit restric- tions and 14 states planned benefit restrictions for fiscal year 2011.

In addition to continued or increased demand for services and lower provider reimbursement rates, safety net providers have less capacity to participate in ACA innovations such as accountable care organizations, intended to improve service delivery and quality, and reduce costs.  The ACA’s emphasis on quality improvement is welcome, but safety net providers question whether resources for data collection, reporting, and use will be available. Without support, they view these as additional tasks that must be accomplished with already limited funds.

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