Increase in self-pay patients coinciding with Medicaid redeterminations

Photo: FG Trade/Getty Images

The proportion of self-pay patients began increasing for emergency department, hospital and primary care visits in April, when states could start terminating Medicaid coverage for patients who no longer met requirements following the COVID-19 pandemic, according to a study from Epic Research.

During the pandemic, the federal government authorized a temporary increase in the amount of funding that states could receive for medical assistance, provided the state kept nearly all current Medicaid patients enrolled in coverage throughout the pandemic. That condition expired at the end of March 2023, when states could begin to terminate Medicaid coverage for patients who no longer met eligibility requirements. Several states began reviewing eligibility and started terminations of coverage in April, but states have until the end of March 2024 to resume to normal eligibility conditions.

A KFF study found that, prior to the pandemic, 65% of patients whose Medicaid coverage ended did not have insurance coverage in the following year. Lack of insurance coverage could result in expensive medical bills for patients who are required to pay for their healthcare out of pocket, that study determined.

To understand how coverage trends have changed since Medicaid terminations started again in April 2023, Epic Research analyzed 34 million hospitalizations, 340 million primary care encounters and 146 million ED encounters that occurred between January 2017 and August 2023 to determine the proportion of self-pay encounters by the month Medicaid coverage terminations started in each state.

WHAT'S THE IMPACT?

Across all three encounter types – emergency department, primary care and hospitalizations – states that ended continuous enrollment in April have had the greatest increase in self-pay visits in August 2023 compared to August 2022. States that ended continuous enrollment in May or June have had similar shifts in their self-pay trends. States that ended in July or later are starting to show early indications of an increased proportion of self-pay encounters across all three encounter types.

If the current trend continues, the proportion of self-pay covered encounters will rise for all three encounter types, Epic found.

Researchers also measured the monthly rates of encounters covered by either Medicaid or by another insurer compared to self-pay from January 2017 to August 2023. The proportion of ED encounters with Medicaid coverage decreased by 4.4 percentage points between January 2017 and March 2023, from around 25% to 21%. The proportion of ED encounters with Medicaid coverage decreased by 2.8 percentage points from March to August of this year.

There was also an increase of 2.4 percentage points for self-pay and 0.3 percentage points for commercial or other ED encounters from March 2023 to August 2023, which suggests that most of the Medicaid ED volume transitioned to self-pay, Epic found.

The proportion of hospitalizations with Medicaid coverage has trended downward by 6.2 percentage points, from 23% of hospitalizations in 2017 to less than 18% in March 2023. Between March and August, the proportion dropped an additional 2.7 percentage points. This coincided with a 1.5 percentage point rise in the proportion of self-pay hospitalizations, and a 1.2 percentage point increase in commercial or other coverage. 

For primary care, the proportion of encounters with Medicaid insurance has largely stayed between 14 and 15% since 2017, with a small spike to 16% at the start of the pandemic. The proportion of self-pay primary care encounters increased slightly over time to about 2% in 2019, where it remained until March 2023.

The proportion of self-pay encounters increased by 0.6 percentage points between March 2023 and August 2023. Commercial/other insurance-covered encounters make up the other 0.5 percentage point difference since the end of continuous enrollment for Medicaid.

THE LARGER TREND

Earlier this year the Centers for Medicare and Medicaid Services said half a million children and families would regain their Medicaid and Children's Health Insurance coverage due to improper disenrollment.

On August 30, CMS issued a call to action to states about a potential state systems issue related to automatic renewals that was causing individuals to be inappropriately disenrolled from Medicaid, even when the state had information indicating the person remained eligible. This call to action was sent to all states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands requiring them to determine and report whether they had a systems issue that inappropriately disenrolled children and families.

Federal rules require states to use information already available to them through existing reliable data sources, such as wage data, to determine whether people are still eligible for Medicaid or CHIP. Auto-renewals make it easier for people to renew their Medicaid and CHIP coverage, helping to make sure eligible individuals are not disenrolled due to red tape, CMS said.
 

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com