(Last updated at 4:11pm on June 29)

In a surprise decision, it appears the Supreme Court has upheld  the Patient Protection and Affordable Care Act in a 5-4 decision.

For home health agencies, this means that burdensome provisions of the law, such as the face-to-face encounter requirement and the rebasing of home health rates starting in 2014, will stand.

The individual mandate, which guarantees health insurance to virtually every U.S. citizen, has been held constitutional. The court interpreted a penalty for non-compliance with the insurance mandate as a tax levied by the federal government.

The court also has upheld an expansion of Medicaid coverage which is set to add millions of low-income Americans to the rolls. However, the court has limited the federal government’s ability to impose penalties on non-compliant states.

Update: The federal government may withhold new funds, but not existing ones. As a result, don't expect your agency's number of Medicaid patients to increase dramatically just yet. The issue is that many states simply don’t have the funds to support a Medicaid expansion of any type. The Supreme Court’s ruling makes it more likely that a state would not consider expanding, since there’s no penalty, says John Gilliland, an attorney with the Gilliland Law Firm in Indianapolis.

The Visiting Nurse Associations of America (VNAA) has issued a statement praising the Supreme Court's decision to uphold the law, but voicing concern about the decision's impact on Medicaid services. The court's opinion doesn't allow the federal government to withhold existing Medicaid funds from states, but it does permit the withholding of new funds.

Update: The National Association for Home Care & Hospice (NAHC) said it "believes that the Affordable Care Act can and should be improved. Accordingly, NAHC will continue to work with both Democrats and Republicans to improve the legislation."

The association says it will push for two-year implementation delays on key provisions, such as the creation of insurance exchanges. A delay would result in an estimated $200 billion cost savings, "which can be applied to deficit reduction, extending the SGR 'doc fix' and avoiding the need for any further cuts to Medicare. NAHC will continue to argue that home health care has been cut disproportionately and will oppose the imposition of copayments or additional cuts."

All other features of the law are retained, including:

  • accountable care organizations (ACOs) and other care-transition programs;
  • the requirement to return overpayments within 60 days;
  • the home health and hospice face-to-face encounter requirements.