Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Policy & Regulation News

Indiana Implements ACA Medicaid Expansion

By Stephanie Reardon

Starting February 1, 2015, eligible beneficiaries will have access to affordable high-quality healthcare coverage .

- Indiana has become the 28th state (including DC)  to expand its Medicaid program under the Affordable Care Act (ACA), according to a press release from the Centers for Medicare & Medicaid Services (CMS). Starting February 1, 2015, eligible beneficiaries will have access to affordable high-quality healthcare coverage with the essential benefits guaranteed by law. Through 2016, the expansion is 100 percent federally funded.

“I continue to be encouraged by interest from governors from all across the country who want to bring health care coverage to low-income people in their states by expanding Medicaid. They understand both the economic benefits of Medicaid expansion and the health and financial security it brings to their residents,” said Department of Health and Human Services Secretary Sylvia Burwell.  “The Administration will continue to work with governors interested in expanding Medicaid to devise approaches that work for their states while keeping faith with the law’s goals and consumer protections.”

Governor of Indiana Mike Pence has been working to implement the the program expansion.

“Medicaid is not a program we should expand; it’s a program we should reform, and with the approval of HIP 2.0 today, Indiana becomes a leading state for reforming Medicaid,” Pence said as reported by local Indiana news, WTHR.

According to a study from the Urban Institute, the acceptance of the ACA Medicaid expansion could have a huge impact on a hospital’s revenue cycle. At the time of the study, 24 states had not expanded their Medicaid program and the study predicted that these states would lose out on approximately $423.6 billion in federal Medicaid funds from 2013 through 2023.

The study also reviewed 16 different state fiscal studies, all of which seemed to point toward an expansion in Medicaid benefiting the state budget.

According to a study from the Kaiser Family Foundation, Medicaid enrollment increased by approximately 8.3 percent during fiscal year 2014 across all states. Almost all states with higher enrollment increases were also the states that had implemented the ACA Medicaid expansion.Enrollment growth in states that expanded their Medicaid was at 12.2 percent. States that did not implement the ACA expansion only saw a growth of 2.8 percent for enrollment.

The Kaiser study predicted that for 2015, Medicaid enrollment would increase by 12.2 percent in all states, with the higher enrollment growth rates (18.0 percent) in ACA expansion states. States that did expand their Medicaid approximated that 80 percent of their growth in enrollment was attributable to newly enrolled Medicaid beneficiaries.

With enrollment rates on the rise, Medicaid spending (and through this hospital and provider revenue intake) is also expected to increase. For 2015, Kaiser predicted that Medicaid spending would increase by about 14.3 percent. The increase in spending is anticipated to be 6.5 percent in non-expansion states versus an increase of 18.3 percent in expansion states.

The possible downside of implementing the ACA Medicaid expansion plan has been reported here previously. Low reimbursement rates for physicians remains a concern, with one study predicting a fee decrease between 40 and 50 percent now that the “fee bump” has not been extended.

Hospitals also face regular Medicaid reimbursement cuts, according to another report on this site. This is a challenge that has some providers refusing to accept Medicaid patients as doctors struggle to make ends meet.



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