In December, Congress passed legislation to begin decoupling Medicaid coverage protections under the Families First Coronavirus Response Act (FFCRA) from the Public Health Emergency (PHE). These protections have required Medicaid to extend certain flexibilities—such as continuous health insurance coverage—in exchange for enhanced federal funding. While the PHE remains in effect, Medicaid continuous coverage has been lifted, which means health insurance protections could come to an end as early as April, leaving up to 14 million patients and the community hospitals that serve them in a vulnerable position.
What this means for patients
KFF estimates that between 5.3 million and 14.2 million people will lose Medicaid coverage once the “unwinding process” is complete. The Centers for Medicare and Medicaid Services has recommended that states take a full year to complete this process and conduct thorough redeterminations on every enrollee. However, looming financial pressure—across many U.S. states—make an accelerated unwinding likely.
While some Americans will lose coverage due to income ineligibility, the Department of Health and Human Services estimates that 6.8 million people will lose Medicaid coverage even though they remain eligible for the program. The reason? States resuming annual eligibility redeterminations. If a state’s Medicaid program can’t reach an enrollee to get the information needed to maintain eligibility—the enrollee is at risk for coverage loss. That’s why it’s critical for those covered through Medicaid to make sure their state agency has up-to-date contact information.
What this means for hospitals
Hospitals need to be prepared for a significant influx in financial counseling needs—including charity care and flexible payment arrangements—as millions of people begin losing Medicaid coverage. Many hospitals will see their financial counseling workload increase significantly in 2023. In addition, the expiration of continuous coverage is likely to increase uncollectible debt for hospitals, further exacerbating their already strained financial situations. Given the fact that hospitals are already operating with tight budgets, limited staff, and less-than-ideal margins, it’s critical they work out a strategy before everything begins to unfold in April.
Here are a few steps hospitals can take now to minimize the administrative and financial burden that’s sure to come in the spring:
- Review and update your financial assistance policies to ensure you’re providing adequate support to uninsured and underinsured patients.
- Develop partnerships with community organizations and other healthcare providers to help connect uninsured patients with resources for coverage and care.
- Invest in technology solutions that can help identify and track patients who are at risk of losing coverage, and proactively reach out to them to help them maintain coverage or explore charity care options.
- Make sure your Financial Assistance Program is easily accessible and efficient in connecting eligible patients to the discounts they need to maintain affordable access to care at your facility.
- Leverage an online financial assistance platform to help you augment financial counseling efforts.
- Prepare an effective communication strategy to help educate patients and the community on the impacts of the change in the coverage and your role in helping them access the care they need.
As the Covid-19 pandemic continues to wind down, so too do the policies put in place to protect those most affected by it. While this may seem like an impossible task to get ahead of, both patients and hospitals can take steps to proactively lighten the burden as continuous Medicaid coverage comes to an end. While every state will have different timelines and approaches to unwinding PHE provisions, it’s critical that hospitals take measures to ensure affordable care remains available for all who need it.
