Medicaid Expansion Could Mean Greater Reimbursement for Payers

Findings from a recent study suggest that Medicaid expansion under the Affordable Care Act was not associated with increased emergency department visits like many predicted, but was associated with improving the payer mix.

“There was great concern that expanding eligibility for Medicaid insurance would result in higher emergency department use and higher costs, because this occurred in several previous studies,” said researcher Jesse Pines, MD, MBA. “The reason is that people with health insurance use more health care than those without it, therefore insurance expansion and in particular Medicaid expansion, was expected to cause a major surge in emergency department visits.”

Pines added that Medicaid beneficiaries use the emergency department more than other patient populations due to the difficulty they experience seeing a physician.

“But when we compared states that expanded Medicaid compared to those who didn't in hundreds of hospitals across the country, we found no increases in emergency department visit volumes in Medicaid expansion states,” he said.

Researchers did, however, discover that states with Medicaid expansion affected the payer mix for patients visiting the emergency department. In 2014, states with expanded Medicaid increased Medicaid-paid emergency department visits by 27%, decreased uninsured visits by 31%, and decreased privately-insured visits by 7%, compared with states that did not expand, according to the study.

“Improving the percentage of previously uninsured patients has an important impact on the economics of emergency services, in this case, improving the payer mix with higher percentages of Medicaid patients,” said study co-author Randy Pilgrim, MD. “Payments for Medicaid visits are higher than for the uninsured. But the long term impact of the ACA on the overall economics of emergency care is still an open question, especially with other provisions that affect reimbursement, including the future effect of new payment models.”

Researchers hope their findings will inform states seeking to expand Medicaid.

“With no increase in emergency department visit rates, our research is good news for government programs aimed at expanding health insurance, and in particular Medicaid coverage,” Dr Pines concluded. “We challenge the conventional wisdom that people go to the emergency department because they do or don't have health insurance. People use the emergency department when they're sick or injured. That's why we stay open.”