Hospitals face new cost, patient challenges with Medicaid expansion

Tools

With Medicaid expansion projected to add 7 million newly insured patients, hospitals must be prepared for the challenges, including more volume, and benefits, such as funds that will offset uncompensated care, when the health reform provision takes effect in 2014, concludes a new report from PwC's Health Research Institute.

Even with most states still undecided on whether to opt in to the provision, by reducing the number of uninsured, Medicaid expansion will allow hospitals to treat more insured patients who can actually pay for care. That can boost hospitals' bottom lines because they already lose about $40 billion a year to uncompensated care, according to the report.

In addition to bracing for increased patient volume, hospitals must be ready to serve the different demographics and health needs of newly insured Medicaid patients. For example, more than one-third do not speak English as their primary language, suggesting potential language and cultural barriers.

Hospitals can use professional translators to bridge communication gaps and health literary issues with non-English-speaking patients and avoid medical errors from miscommunication.

Another challenge in expanding Medicaid is that many patients will enroll in managed care plans, limiting them to a tight network of providers. So hospitals "need to become more competitive on rates and savvier about the delivery of care," the PwC report states.

Moreover, not everyone is convinced millions of newly insured patients will offset cuts to disproportionate share hospital (DSH) payments.

"I don't think [providers] are going to get it from the reimbursement system," Molly Collins Offner, AHA's director for policy, said in the report. "Change has to come from the provider," she said.

The National Association of Public Hospitals and Health Systems (NAPH) warned that total uncompensated care costs could rise $53.3 billion by 2019 now that states can opt out of Medicaid expansion under the reform law.

The major uptick in uncompensated care costs come from states rejecting Medicaid funding along with up to $14.1 billion in DSH payments cuts, FierceHealthFinance reported this week. With a looming uncompensated care burden, the NAPH is urging Medicare and Medicaid to restore DHS payment cuts.

For more:
- read the PwC report (registration required)

Related Articles:
Medicaid spending steadies with hospital payment cuts
Will health reform survive the election?
Medicaid expansion roundup: Most states still undecided
Obama admin: Delayed Medicaid expansion will cost states