Medicaid unwinding has been a critical topic around revenue cycle management services for months now, and this is because providers will be directly impacted. Most providers should expect to see serious upheaval in their revenue cycle management services as patients are kicked off Medicaid rolls.
Medicaid Unwinding Explained
During the height of the COVID-19 pandemic, enrollment in Medicaid increased, largely thanks to the continuous enrollment provision that prevented people from having their coverage removed. For providers, this meant an unprecedented stability in the Medicaid enrollment in their care communities. But since the end of the public health emergency (PHE) this has changed. The Kaiser Family Foundation (KFF) estimates that anywhere between 8 million to 24 million people will lose their coverage as the continuous enrollment provision unwinds [1].
Providers such as hospitals, health systems, home health agencies, and physician practices will need to pay attention, possibly even considering working with a revenue cycle management company. But first, it will be important to understand the possible outcomes during the unwinding.
How States Will Be Impacted
Not every state will see the same issues, so providers should be working to understand their individual risk.
For example, Utah is expected to have the highest proportion of members who are taken off the rolls, with a possible percentage difference of 32.5%. After that is Indiana at 28.1%, Minnesota at 27.2%, and North Dakota at 26.5% [2]. States with the lowest impact include:
- Nebraska
- Connecticut
- Kansas
- Alabama
- Alaska
- New Mexico
Providers in each of these states are already working on plans to adjust. Indiana University Health, for example, is offering personal assistance to members to help them keep their benefits or find a path to new coverage. They’re doing this through financial counselors at their hospitals and cancer centers as well as through community outreach events.
Florida’s Memorial Healthcare System is in a state that could see around 1 million people disenrolled during the unwinding. The health system is working on auto-enrolling based on information gathered by the state but is also aware that work and preparation will need to happen for people who aren’t able to auto-enroll and who might need support looking for alternative coverage.
The Uninsured Challenge
During the three-year period of continuous enrollment (February 2020 to March 2023) Medicaid enrollment increased by around 20 million people. This was the reason the uninsured rate fell to its lowest level at the beginning of 2022. Unfortunately, according to the recent KFF survey, only about one-third of states had the ability to project coverage losses around disenrollment, meaning providers will face multiple challenges in establishing revenue cycle management services that align with their needs as uninsured populations rebound [3].
Providers should expect that, while renewals resume for Medicaid enrollees, they will see substantial uncertainty around how many people will lose Medicaid coverage, how many will find their way to other coverage, and how many will become uninsured. That said, most providers can be sure that they will see an increase in their uninsured rates, on top of increases in enrollment in CHIP and private health insurance.
But exact predictions will be difficult. Consider that, since Medicaid enrollment was automatically sustained through the height of the pandemic, some people who are currently listed as enrollees through administrative data could have started working and might now have insurance coverage under an employer. At the same time, the federal surveys that measure uninsured rates (through self-reporting) show smaller increases in enrollment than administrative data.
Hospitals Could See Mixed Results
Hospitals will need to pay close attention to their revenue cycle outcomes. Hospitals now are dealing with changes from the end of the PHE including shifts in bad debt and charity care as well as other factors tied to the end of the continuous coverage requirement.
Kaufman Hall reports that the April increases in bad debt and charity care could be directly tied to Medicaid disenrollment. They also report that hospital volumes have dropped, including both inpatient and outpatient. These decreases combined with increases in charity care and bad debt could be a signal that widespread disenrollment is at hand. Erik Swanson, senior vice president of data and analytics believes there is a link. “With states conducting their Medicaid eligibility redetermination, it’s predicted that hundreds of thousands of people will ultimately become uninsured. The data indicate that we may already be seeing the effects of disenrollment materialize with patients less likely to seek out the care they need and a continued rise in bad debt and charity care.” [4]
Hospitals will be navigating these changes while paying more for supplies and labor, stressing the importance of looking for a revenue cycle management company who can help them ride out these trends in the best way possible.
Nursing Homes Are Waiting to See Outcomes
Even as hundreds of thousands have already been removed from Medicaid rolls, the impact hasn’t been severe for Medicaid-dependent nursing home residents according to McKnight’s Long-Term Care News. Their survey of a dozen sector associations about the end of the COVID-19 PHE and Medicaid unwinding found reports of no significant impact. As a result, members are following their standard processes to continue serving their Medicaid-eligible residents. That said, in Oklahoma, where 70% of disenrollments have been a result of procedural issues (vs. proven ineligibility), neither the Oklahoma Health Care Association or LeadingAge Oklahoma could comment on the situation in nursing homes [5].
How to Approach Revenue Cycle Management Services
This is a time of ongoing uncertainty for providers. Cash flows will undoubtedly be impacted even as expenses are increasing. Providers should be taking a step back to examine their approach to revenue cycle management services, assessing whether they have the ability to monitor and respond to this type of unprecedented change. Most will also need to consider partnering with a revenue cycle management company to navigate the coming changes. To learn more about a revenue cycle management company that can help you in this process, start here.
References
[1] J. Tolbert and M. Ammula, “10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision,” KFF, 9 June 2023. Available: https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-the-unwinding-of-the-medicaid-continuous-enrollment-provision/.
[2] R. Wilson, “How many people could lose Medicaid coverage, state-by-state,” Becker’s Healthcare, 31 March 2023. Available: https://www.beckerspayer.com/payer/how-many-people-could-lose-medicaid-coverage-state-by-state.html.
[3] A. Burns, E. Williams, B. Corallo and R. Rudowitz, “How Many People Might Lose Medicaid When States Unwind Continuous Enrollment?,” KFF, 26 April 2023. Available: https://www.kff.org/medicaid/issue-brief/how-many-people-might-lose-medicaid-when-states-unwind-continuous-enrollment/.
[4] J. LaPointe, “Hospital Finances Break Even as PHE Ends, Medicaid Unwinds,” RevCycleIntelligence, 31 May 2023. Available: https://revcycleintelligence.com/news/hospital-finances-break-even-as-phe-ends-medicaid-unwinds.
[5] J. R. Towhey, “As Medicaid disenrollments surge, concerns about nursing home residents persist,” McKnight’s Long-Term Care News, 5 June 2023. Available: https://www.mcknights.com/news/as-medicaid-disenrollments-surge-concerns-about-nursing-home-residents-persist/.
