How health systems can prepare for Medicaid redetermination

Prior to the pandemic, state Medicaid programs were required to recheck each enrollee’s eligibility at least once per year and dis-enroll people who were no longer eligible (a process called Medicaid Redetermination).

Since March 2020, the continuous coverage requirement within the Families First Coronavirus Response Act (FFRA) has provided states with additional federal funding for their Medicaid programs as long as they did not dis-enroll people during the COVID public health emergency (PHE). This requirement led to unprecedented levels of Medicaid enrollment and helped millions of people keep their health coverage in the face of the pandemic and rising unemployment.

Beginning on April 1, 2023, the continuous coverage requirement will end, and states will begin “redetermining” coverage for their enrollees. A recent report by the Urban Institute estimates that 18 million people will lose Medicaid coverage over the next 14 months with about 3.8 million people becoming uninsured.

While states and health plans strategize on how to handle this historic transition of coverage, what can hospitals and health systems do to prepare and minimize the risk to their organizations?

Boost Medicaid advocacy program resources

Leading hospitals and health systems already have a Medicaid advocacy program in place to assist uninsured patients apply for Medicaid or other coverage. These advocacy programs should expect to see a surge in volume once dis-enrollments begin, putting a strain on resources and processes. Whether the advocacy program is outsourced or in-house, facilities should ensure adequate resources are available in each department and that technology is optimized for efficiency.

Evaluate registration policies & procedures

With the anticipated churn in coverage, Providers should re-evaluate their current registration processes and ensure they are set up to prevent eligibility-related denials. For example, is the Registration department asking for member identification (ID) cards at every visit or are they pulling forward the most recent coverage? If a patient does not have their ID card upon arrival, is Registration classifying the encounter as self pay? Are adequate processes in place to trigger a review with a Medicaid advocate? Can improvements be made to point-of-service collection processes? Are systems optimized to make it easy on registrars to run eligibility rather than navigating to multiple payer websites?

Review self pay, charity & bad debt processes

With an estimated 3.8 million people likely to become uninsured, health systems can expect to see higher volumes of self pay, financial assistance and bad debt.

Facilities should take a critical look at their processes to ensure they are making it as easy as possible for patients to pay or apply for financial assistance and minimize bad debt. Strategic coordination between the Self Pay teams and the Medicaid Advocacy teams, interest-free patient financing programs, maximizing available payment options, and improving patient financial communication are all ways that facilities can minimize uncompensated care as a result of the Medicaid Redetermination.

Additionally, starting the self pay and charity process as far upstream as possible should be a priority.

On bad debt, facilities should evaluate their current bad debt reserve calculation methodology to ensure they are anticipating an increase in future write-offs, as well as assessing their S-10 Medicare Bad Debt reporting process to validate that they are accurately capturing qualifying claims and receiving appropriate uncompensated care reimbursement.

Communicate with your patients

Health systems should engage with their Medicaid patients and urge them to (1) update their contact information with the state; (2) check their mail or email for info from the state about their coverage and renewal requirements; and (3) remind patients to renew their applications promptly to prevent any coverage gaps.

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Sean Krausz, Manager, Healthcare Transformation

The information provided here is for general guidance only, and does not constitute the provision of tax advice, accounting services, investment advice, legal advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisers.

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