by Luke Wagner.
One of the most important provisions of the Affordable Care Act (ACA) is the expansion of health care coverage to low-income families. From 2014 to 2016, the federal government will cover 100% of the costs of Medicaid expansion (FamiliesUSA, 2014). And, starting in 2020, the federal government will cover 90% of the expansion (FamiliesUSA, 2014).
Colorado is one of 29 states that decided to expand and, as a result, it is estimated that 238,000 Colorado residents will gain access to Medicaid (FamiliesUSA, 2014). These residents generally have to be under the age of 65 and with income up to 133% of the federal poverty level (HealthCare.gov, n.d.). Children are eligible up to the same income level or higher in all states.
If you are located in one of the states that expanded Medicaid then you probably have seen your payer mix change dramatically in 2014. In Medicaid expansion states, Medicaid and Medicaid-managed care claims increased close to 6% of total gross patient service revenue from 2013 to 2014 (Crowe Horwath, 2015). This increase in Medicaid patients does not guarantee an increase in total patients or cases. The increase in Medicaid revenue was offset by the decrease in self-pay patients and commercial/managed care (Crowe Horwath, 2015). A good way to understand how the ACA has affected your practice is to look at your payer mix from 2013 to 2014.
The change in the payer mix is not necessarily bad news. The national benchmark for charity write-offs in 2013 was 2.5% (Crowe Horwath, 2015). In Medicaid expansion states, charity write-offs decreased to 1.7% (Crowe Horwath, 2015). This means that your practice’s payer mix probably shifted from self-pay with charity write-offs to Medicaid. Finally, net revenue per case in Medicaid expansion states grew slightly more than non-expansion states.
Luke Wagner is EMP’s Director of Financial Management and Analytics.
For More Information:
Crowe Horwath. (2015). Payer Mix Shift Highlights Dramatic Reimbursment and Revenue Cycle Changes. Crowe Horwath LLP.
FamiliesUSA. (2014, November). Retrieved from A 50-State Look at Medicaid Expansion: http://familiesusa.org/product/50-state-look-medicaid-expansion
HealthCare.gov. (n.d.). Retrieved from Medicaid expansion & what it means for you: https://www.healthcare.gov/medicaid-chip/medicaid-expansion-and-you/