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ACEP Now: Vol 34 – No 07 – July 2015

Image Credit: © SHUTTERSTOCK.COM

Your payer and acuity mixes are integral and vitally important to your financial success.

Payer Mix

There are two major industry changes affecting the emergency medicine payer mix. The first is Medicaid expansion, and the second is the ever-increasing occurrence of patients with high-deductible health plans (HDHPs).

Lowes reports the following key facts pertinent to this discussion:¹

• 37.2 million: the number of Americans who were uninsured in the first nine months of 2014, a decrease of 23 percent from 2010, when the Affordable Care Act (ACA) was passed.
• 11.7 million: the number of Americans who have signed up or re-enrolled for coverage on ACA insurance exchanges for 2015.
• 11.2 million: the number of additional Americans enrolled in Medicaid and the Children’s Health Insurance Program in January 2015 compared with fall 2013. Eighty-six percent of them are in states that expanded their Medicaid programs.

As Bowers and Jacobs note, the percentage of workers in HDHPs increased from 4 percent in 2006 to 20 percent in 2013.^2,3 The expansion of Medicaid benefits is a positive change for emergency medicine. Prior to Medicaid expansion, every billing service had strived to implement creative protocols and processes to move the meter beyond self-pay to some-pay. Even with true self-pay, the collection per patient could have been in the low double digits.

Migration of Self-Pay to Medicaid Coverage

Today, the former self-pay patient who becomes a Medicaid patient can dramatically impact your practice financials, as shown below in a sample ED practice with a self-pay cash per visit of $24.

(Click for larger image)

Taking this same subset of patients and insuring them with a Medicaid plan shows the following results if just 80 percent (9,585) of these patients enroll:

1. At $60 per visit, revenue becomes $575,100, an increase of $287,556
2. At $70 per visit, revenue becomes $670,950, an increase of $383,406
3. At $80 per visit, revenue becomes $766,800, an increase of $479,256
4. At $100 per visit, revenue becomes $958,500, an increase of $670,956

The results highlight four salient points. First, Medicaid expansion can have a substantial impact on emergency medicine revenue. Second, it is imperative to negotiate with Medicaid managed care plans. Third, it is vitally important to monitor the movement within your payer mix. The above example depicts self-pay patients becoming insured via a Medicaid program. The results can be dramatically different if patient Medicaid coverage comes as a result of leakage from the practice’s commercial mix of patients. For example:

1. 1. 500 commercially insured patients at $170 per visit result in $85,000 in practice revenue
2. 2. 500 patients now insured with Medicaid coverage at the following rates and revenue numbers result in the following:
   • At $100 per visit, revenue becomes $50,000, a loss of $35,000
   • At $80 per visit, revenue becomes $40,000, a loss of $45,000
   • At $70 per visit, revenue becomes $35,000, a loss of $50,000
   • At $60 per visit, revenue becomes $30,000, a loss of $55,000

The fourth point is to note that accurate and complete ED patient registration has always been tied to the financial results. Accurate registration and an active and aggressive Medicaid enrollment process by hospitals are incredibly important. Medicaid eligibility checks must be an integral part of patient follow-up protocols by your billing service.

Shifting Acuities

If the above subset of patients had been covered by Medicare, a simple shift of 500 patients from 99284 to 99285 would result in an increase of cash totaling $28,605.

99284 Medicare reimbursement: $119.06

99285 Medicare reimbursement: $176.27

Shift of patient from 99284 to 99285: +$57.21

Financial impact from a shift of 500 patients: +$28,605

These shifts in acuity can move in a negative direction as well. Today, we are in an environment requiring constant monitoring of the financial categories of ED patients as well as their acuities.

How to Manage the New Self-Pay Category

The increasing incidence of high-deductible patients within an ED practice brings into play an entirely different and new set of issues. These patients must accumulate significant health care charges before their insurance coverage kicks in. The bottom line regarding the delicate handling of these patients is to recognize them as a completely new self-pay type of patient. They are true self-pay patients until they hit their deductible threshold and have become a critically important part of your payer mix. The solution to this challenging situation is a sophisticated blend of technology, experienced people, and new and creative processes to engage these patients to ensure success with them. There must be creative statement protocols, phone calls, texts, and so forth to “meet patients where they live.” Today’s high-deductible patient is a critically important payer class, requiring new protocols and techniques to ensure proper collections. These are patients whose accounts cannot be mishandled, or they could become public relations problems in addition to challenging financial patients.

Practice management is changing these days, but don’t overlook the basics.

Mr. Holstein is a director of development with Zotec Partners.

References

1. Lowes R. ACA at 5 years: 25 numbers to know. Medscape. March 30, 2015.
2. Bowers K, Jacobs MO. 7 challenges for providers in the emerging consumer market. HFMA. March 30, 2015.
3. Kaiser Family Foundation. 2013 employer health benefits survey. Accessed June 10, 2015.