The end of the Medicaid fee bump could cause an increase in inappropriate and costly emergency department usage.
- Last month, this blog covered news that the “fee bump” for Medicaid reimbursement would end on December 31, 2014. This has been in place for the last two years as a way to increase Medicaid fees for primary care services to Medicare levels.
The bump was created to counteract part of the Affordable Care Act and Medicaid expansion. More than 7.5 million Americans have enrolled in Medicaid since the third quarter of 2013. However, with low physician reimbursement rates, there has been concern that some primary care physicians would stop treating these patients because of the headache it creates. The bump temporarily increased the reimbursement rates, eliminating some of the concern from the physician side.
With the bump expiring, the Urban Institute predicted the estimated fee drop could be as high as 40 to 50 percent nationwide. Expansion states (46.2 percent) are facing a more substantial fee reduction than non expansion states (36.8 percent).
“To put the magnitude of these fee reductions in some context, consider that the projected Medicare fee reduction under the sustainable growth rate formula was 24 percent in 2014. That cut and every potential fee cut under the formula since 2003 has been delayed by Congress,” the report reads. “It has been uncertain whether congressional action related to continuing the Medicaid primary care fee bump would occur before the policy expires, and time appears to be running out.”
Impact on emergency departments
There is another aspect of the end of the fee bump that could have a major impact on the hospital revenue cycle. According to the Healthcare Financial Management Association (HFMA) any reduction in access to primary care, like physicians turning away Medicaid patients for example, could potentially increase inappropriate and costly use of emergency department.
Hospitals are reporting mixed results about the use of emergency departments by Medicaid beneficiaries since the start of the Affordable Care Act. For example, the Arkansas Hospital Association is reporting that the state’s Medicaid expansion added 253,000 and has seen a decline in emergency visits by uninsured patients of 35.5 percent.
The Colorado Hospital Association found the opposite effect. Since Medicaid expansion in the state, emergency department usage increased 5.6 percent among expansion state hospitals, compared to a 1.8 percent increase in non-expansion states. Medicaid-covered emergency trips at Colorado hospitals increased 38 percent when compared to 2013.
Another study that the HFMA highlights found that a “vast majority of Medicaid managed care enrollees are unable to access half of the physicians listed by their plans.” Going a step further, federal data shows that in 2014, only 59 percent of adults and 74 percent of children – all Medicaid beneficiaries – were able to get care quickly.