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What Does Medicaid Expansion Mean to You and Your Practice?

Posted on August 26th, 2016

What does ACA mean to you

The implementation of the Affordable Care Act (ACA) was highly anticipated by Americans. Especially those that did not previously have healthcare. The law provides states with the option to expand their Medicaid programs –at the expense of the federal government through the end of 2016 – to include all adults with incomes that are at or below 138 percent of federal poverty level. This means more uninsured individuals and families can opt into a government assisted program than before.

A total of 28 states and Washington, D.C., have taken advantage of this opportunity. Since the implementation of ACA, Medicaid enrollments have grown significantly, including in states that have not expanded. This enrollment growth has been attributed to people seeking insurance through ACA insurance marketplaces only to discover that they are actually eligible for Medicaid under pre-ACA rules. A total of 10.8 million additional Americans have enrolled in Medicaid since the enactment of the ACA.

While the expansion of Medicaid is impacting hospitals, private medical practices are seeing a greater impact. They see a shift away from patients with commercial health plans towards Medicaid patients, which sometimes pays doctors pennies on the dollar compared to private insurance.

Recently released data shows that in states taking the ACA Medicaid expansion, Medicaid visits compared to all private doctor visits increased from 15.6 percent in 2013 to 17.7 percent in 2014 and to 21.5 percent in 2015. The proportion of visits remained largely flat, at 9.4 percent, 9.2 percent and 8.9 percent respectively, for states not expanding their Medicaid programs. But herein lies the problem; the proportion of commercially insured patients, either through the marketplace exchanges or through workplace coverage, actually fell in states that expanded their Medicaid programs. In those states, commercially insured patients comprised 65.2 percent of all patients in 2013, 64.4 percent in 2014 and 62.8 percent in 2015. The percentage rose slightly in states not expanding their Medicaid.

Looking at this three-year trend, it is easy to predict that the financial strain on physician practices will be felt. The ACA is already paying close to Medicaid rates for many ambulatory procedures. Many privately insured under the ACA were also bumped off their prior commercial coverage and forced into an ACA exchange, which will lower provider revenue. States that expanded their Medicaid programs have also seen the proportion of Medicaid patients visiting doctor offices, as a percentage of their physicians’ total patient volume, rising by almost 40 percent since 2013. With Medicaid paying much less than private coverage, this severely alters the doctors’ bottom lines.

If the ACA has impacted your working capital, we can help. Triumph Healthcare Finance finds you the right solution to your unique problem.  Call us or email us at info@triumphhf.com.

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