Revenue Cycle Strategies to Address Explosive Medicaid Eligibles Anticipated with the Affordable Care Act

The following is an important excerpt from a recent Emdeon sponsored HFMA Educational Report titled Preparing for shifts in Medicaid Coverage.

The Affordable Care Act has made it possible for roughly half of the country’s uninsured patients to become eligible for healthcare coverage under state Medicaid programs. That could mean as many as 23 million people will be added to Medicaid rolls.

The explosive growth in the Medicaid population may have a positive benefit on hospitals as they stand to receive at least some payment for services instead of absorbing the costs of bad debt and charity care for the indigent.
There is the danger, however, that the rising numbers of Medicaid patients will threaten margins.

Although subsidies from the federal government will ease the transition to Medicaid coverage in the first few years of reform, at some point states will have to assume full financial responsibility for Medicaid beneficiaries, and it is not clear how state governments will be able to do so. State budgets most likely will not increase, so while treating the increasing numbers of Medicaid patients will raise costs for hospitals, the costs may not be balanced by increases in payment. Hospitals therefore may have to make do with lower per-procedure or per-patient Medicaid payments.

Most of the money to reimburse hospitals for treating Medicaid patients may end up coming from other sources of payment that are already slated for hospitals. As a result, safety net and teaching hospitals may face reductions in disproportionate share and graduate medical education funding.

The growth of the Medicaid population also may negatively affect the revenue cycle. Medicaid programs characteristically are slow to pay, and in most states they follow a complicated, manual, and elongated application procedure that can interrupt the revenue stream.

As hospitals take steps to ensure that they identify and qualify as many patients as possible for Medicaid coverage or financial assistance, they are also streamlining administrative, revenue cycle, and operational processes to mitigate the adverse effects that the influx of Medicaid patients may exert on margin and cash flow.

In particular, many providers are identifying and readying for potential effects on eligibility screening processes, financial assistance counseling and enrollment, and near-term financial strategy.

Eligibility Screening
When it comes to reviewing registration processes most likely to be affected by shifts in coverage, hospital leaders are focusing on enhancing ways to identify third-party payer sources, paying particular attention to the emergency department (ED) and opportunities to incorporate workflow tools.

Natural Order
Communication is visual, and the layout and design of a statement does matter when conveying patient-specific information. Work with your patient billing vendor to adjust the placement of key data and text on the page. Reordering content will aid in drawing the eyes of recipients to key information first.

Accelerating third-party payer identification
Halifax Health, the largest healthcare provider in east central Florida, is preparing for the expansion in Medicaid by strengthening its registration methods, particularly screening for third-party payment eligibility.

A member of Florida’s Safety Net Hospital Alliance, Halifax Health is one of about 20hospitals that care for nearly 60 percent of the state’s Medicaid enrollees. The system has a tertiary and community hospital with 944 beds and more than 500 physicians on its medical staff. It also provides psychiatric services and has four designated cancer treatment centers as well as centers of excellence in cardiology, orthopedics, and the neurosciences.

“We already have a very active program for identifying any patients who would have any type of third-party coverage, whether through a local charity or victim’s compensation fund, Social Security, disability, or Medicaid,” says Arvin Lewis, chief revenue officer for Halifax Health. Now, the health system is focused on building this program, which in 2008 shifted $34 million in charges from self-pay to Medicaid and in 2009 raised that number to $46 million.

“Many patients, even those who qualify for Medicaid, do not sign up for all of the third-party payment programs that are available to them,” says Lewis. “So we are continuing to try to assist in identifying these opportunities. It’s good for patients, it’s good for the hospital, and it’s good for the community. After all, whatever programs we can identify that people are qualified to receive will ultimately improve payment. And payment is necessary for the hospital to continue to support its mission of care.”

Halifax Health is combining internal and external resources to strengthen third-party payment eligibility screening. Its revenue cycle team works side by side with clinical staff, social services professionals, and government program specialists to uncover new and existing eligibility, complete and submit applications, and track cases from inception to resolution. “We have to balance the ledger, so we plan to aggressively enroll patients in third-party payer programs as well as Medicaid,” Lewis says.

Halifax Health also is accelerating eligibility decisions. The health system partnered with an outside vendor about three years ago to speed its processes. “By the end of the first inpatient day, we want to have a clear view of the patient from a financial standpoint: Does the patient have coverage? If not, what are the programs the patient may qualify for, and how can we assist in securing qualification? The patient may not be able to participate in this process on day one, but we are doing the background, working with the family, and getting forms completed to be able to move forward,” he says.

Read this HFMA Educational Report in its entirety to learn about more revenue cycle strategies for addressing the explosive Medicaid population anticipated with the Affordable Care Act. Also, discover how Emdeon can help you with this today with our Patient Access Management Solutions! Call us at 877.EMDEON.6 (877.363.3666).

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