ACA Is Upheld: Will Medicaid Be Your Next Payer?

Laurie Morgan July 24th, 2012

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With ACA upheld, Medicaid is set to be the vehicle through which millions of currently uninsured patients will get coverage

Many of the practices we work with shy away from Medicaid, citing a mix of reasons that include poor reimbursement, more frequent no-shows, and potentially unpredictable administrative costs.  But with the Affordable Care Act (ACA) largely upheld by the Supreme Court, Medicaid is set to be the vehicle through which millions of currently uninsured patients will get coverage – a huge patient base that will be tough to ignore altogether.  What’s more, the mix of Medicaid patients will be substantially altered.  Higher income people (up to 133% of the federal poverty limit) will qualify, and adults without children (previously a small segment) will constitute a large proportion of the newly insured. 

States will have the option to decline to participate in the Medicaid expansion – but, the federal government’s commitment to absorbing all costs for three years, and 90% of costs from 2020 forward, is expected to make participation attractive.

Perhaps most promising for practices, the ACA also calls for Medicaid reimbursement rates for some primary care specialties in many states to increase sharply, for parity with Medicare – which in most markets is now competitive with private payer reimbursement.  For family practitioners, internists and pediatricians here in California, for example, that will mean that Medicaid reimbursement rates will more than double from their current level of 47% of Medicare.  There is one important caveat: the bump in pay is guaranteed for only two years.  New Medicaid patients who are profitable in the short term could become unprofitable in the long term, if the increases are rolled back.  However, because the goal of the pay bump is to forestall primary care shortages, many observers expect that the increases will eventually be locked in.

If your practice is considering adding – or expanding – participation in Medicaid, here are a few tips that can help put you on the path to trouble-free reimbursement:

Know what’s coveredAlthough Medicaid is technically a federal program, it’s implemented at the state level, and states have quite a bit of discretion in what is and is not covered.  Misunderstandings about coverage cut both ways.  Predictably, claims are sometimes denied due to lack of coverage, but many practices also end up under-billing Medicaid because they didn’t realize certain services qualified. More expensive screenings and oncological care, for example, are often covered.  Sometimes you may even be able to bill for no shows. Pediatric practices may be able to obtain vaccines at no charge for Medicaid patients through your state’s implementation of Vaccines for Children, CMS’s immunization program.  Be sure you understand your own state’s program thoroughly, so your practice doesn’t miss out on any reimbursement or covered cost.

Double-check credentialing and other requirements.  Just as coverage varies from state-to-state, there are also different credentialing requirements for physicians and NPPs.  Be sure you understand whether your NPPs must bill under a physician provider number or can bill under their own.

Verify addresses and eligibilityMany Medicaid claims are rejected because patient addresses don’t match Medicaid records.  Be sure to verify address information every time you see the patient.  Most state Medicaid systems also offer online eligibility checking – providing you with backup you can print off and retain in case a claim is questioned or denied.

Laurie Morgan is a management consultant with Capko & Company. She specializes in marketing, management and technology for medical practices and blogs about practice management issues at www.capko.com/blog. Laurie has a BA in Economics from Brown University and an MBA from Stanford. Laurie recently wrote for Getting Paid on Staying on Top of Business Trends to Protect and Build Your Medical Practice, My Receivables Are Growing: Time for a New Billing Service? and Hidden Ways Medical Billing Shortcomings Hurt Your Practice

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