Health Reform 101: Use this primer to navigate the changes ahead

Manufacturers will have to report the information to the Department of Health and Human Services (HHS) annually. Medical product makers won’t have to report gifts valued at less than $10 unless the aggregate amount exceeds $100 during a year. The same rules apply to gifts given to teaching hospitals.

Investment or ownership interest by physicians or their immediate family members in medical product manufacturers or in-group purchasing organizations will also have to be reported. The same goes for payments to doctors involved in product or research development. Research and development payments, however, won’t have to be publicly disclosed for four years or until the product receives U.S. Food and Drug Administration approval, whichever comes first.

The American Academy of Otolaryngology-Head and Neck Surgery code of ethics does not restrict legal trade practices. However, it states that “a physician’s commercial or financial interests should never be placed ahead of the interests and welfare of patients. Conflicts of interest undermine the trust that patients place in their physician. For this reason, physicians should endeavor to avoid any venture that creates a conflict of interest between personal financial interests and the best interests of the patient.”

Employer Requirement to Offer Coverage

Otolaryngologists, as employers, could be affected by parts of the ACA, including the mandate that employers offer health coverage. Starting in 2014, this provision will apply to businesses with 50 or more workers that do not offer coverage and that have at least one full-time employee who receives a premium tax credit under the law. The penalty will be $2,000 per full-time worker. The first 30 employees are excluded from the assessment. Businesses that offer coverage that is so costly that employees are eligible for premium tax credits also face penalties.

Most otolaryngologists, however, already provide coverage. A 2009 salary survey by the Association of Otolaryngology Administrators (AOA) found that 96.7 percent of responding practices offered health insurance, and that the mean percentage of the cost paid by the practice was nearly 84 percent. In addition, about 80 percent of AOA members are in one- or two-physician practices, which likely wouldn’t hit the 50-employee threshold for the employer mandate. About 15 percent of members are in practices of four to 10 doctors, and the remaining 5 percent of members’ practices have more than 10 doctors.

Small Business Subsidies

Some small physician practices could be eligible for tax credits for small businesses to purchase coverage for their employees. To qualify, businesses must cover at least 50 percent of employees’ premium costs. The credits, which began last year, are only available to employers with fewer than 25 full-time equivalent employees (FTEs) earning average wages of less than $50,000 annually. The maximum credit of 35 percent of employers’ share of premiums is available to businesses with fewer than 10 FTEs with average wages of less than $25,000 a year. The size of the credit phases down from there.