Sept. 19—Hospital emergency departments (EDs) could be on the precipice of a Medicaid-funded patient surge if counteracting policies fail to work as intended.

The long-established preference of Medicaid enrollees for treatment from hospital EDs was bolstered this week by new research. And the study, published as a “research letter” in the Sept. 18 issue of JAMA, indicated the problem is growing.

The retrospective analysis of California ED visits by pre-Medicare adults from 2005-2010 found Medicaid beneficiaries had both the highest rate and fastest growth in using that care setting than either privately insured or the uninsured.  Visits to EDs increased 36 percent among Medicaid beneficiaries in the study years, compared with a 1 percent increase among the privately insured and a 24 percent bump by the uninsured. 

The study came as at least 25 states prepared to expand their Medicaid programs in 2014. The Affordable Care Act (ACA) incentivized states to increase their Medicaid eligibility to all residents with incomes of up to 138 percent of the federal poverty level. Many Republican-led states opted not to undertake the expansion after the Supreme Court made the expansion optional.

Implications for Hospitals

The findings indicate hospitals in the expansion states may face a surge of patients into the costliest and highest-demand care location in the healthcare system. 

“The idea was that people would need to come to the emergency department less, but people are starting to realize that may not be the case,” Renee Hsia, M.D., one of the study authors, said in an interview. 

The California study expanded on previous research identifying higher rates of Medicaid beneficiary ED use at specific points in time.

Similarly, ED use increased under a recent Medicaid expansion in Oregon, research showed. Additionally, data tracked by the Centers for Disease Control and Prevention has found both adult and child Medicaid beneficiaries have had consistently more ED visits than the privately insured or uninsured.

Hospitals and Medicaid programs have tried to address the problem of higher Medicaid ED use over the years with varying degrees of success.

“We see more hospitals pursuing a number of community based strategies to alleviate this problem,” said Chad Mulvany, director of healthcare finance policy, strategy, and development at HFMA. 

“Depending on the organization and its capabilities, options range from establishing indigent care community clinics to partnering or providing support to Federally Qualified Health Centers (FQHCs),” Mulvany said. “This allows for patients’ conditions to be managed in a more appropriate setting, providing tremendous value to the community.  As a result, unnecessary utilization of acute services is reduced along with pressure on the ED and uncompensated care.”

Initiatives to Reduce ED Use Explored

Federal efforts to reduce such ED increases included an ACA initiative to increase the number of FQHCs as the Centers for Medicare & Medicaid Services (CMS) pushed to strengthen referral relationships between hospitals and FQHCs. That effort included CMS grants to states to help them reduce the use of hospital emergency rooms by Medicaid beneficiaries for nonemergent reasons.

Federal data indicates Medicaid beneficiaries receiving care from FQHCs are more likely to report having access to care and less likely to be admitted to a hospital, Jim McCrae, associate administrator for primary health care at the Health Resources and Services Administration, said in congressional testimony.

However, the highest-profile federal effort to ease any rush by newly covered Medicaid beneficiaries to their local EDs may not be as successful. The ACA matched Medicaid primary care physician rates to Medicare rates for 2013 and 2014 but the initiative was months-late starting in most states. Additionally, it’s unclear whether physicians’ offices will take on new patients permanently when the additional funding is temporary, according to Medicaid experts.

Medicaid’s lower rates for primary care providers has been blamed for many refusing care or sharply limiting their care for Medicaid beneficiaries, and limited access to office-based physicians is blamed for ED overuse. Physicians have warned that the pay differential problem could grow in California, which will gain 1.4 million of the 13 million new Medicaid beneficiaries the Congressional Budget Office expects to come from expansion. As the surge in Medicaid enrollment neared, California this month began to phase in a long-delayed 10 percent cut to all Medicaid providers.

“If that’s the case—that more people are on Medicaid and Medicaid patients aren’t able to be seen in other places—then this might be something we need to prepare for in terms of our capacity in our emergency departments, in staffing, and how we deal with things at a healthcare system level,” Hsia said.

State efforts to reduce Medicaid beneficiary misuse of EDs have included the addition of higher co-pays for non-emergent ED use by some Medicaid programs. But the efficacy of such initiatives is unclear, as many hospitals opt not to collect the co-pays, according to hospital advocates.

Better Grasp on What Drives Medicaid Patients to ED Needed

Such initiatives to discourage inappropriate ED use are generally a small part of states’ overall efforts to improve Medicaid beneficiary health, Andrea Maresca, director of federal policy & strategy at the National Association of Medicaid Directors, said in an interview. Larger efforts that may eventually do more to reduce ED use include widespread adoption of medical homes and care coordination by Medicaid managed care plans.

“To single out just ED use is fine, but it misses the bigger picture of that’s just one component of the healthcare experience for individuals,” Maresca said.

And at least some of the increased ED use may be due to newly covered people seeking urgent care for conditions that they may have ignored in the past.

A July study by the Center for Studying Health System Change reported that in 2008 more than half of Medicaid and privately insured patients visiting the ED had conditions that were categorized as emergent that needed immediate attention, or urgent that needed attention within an hour. Only about 10 percent of nonelderly Medicaid patient ED visits were for nonurgent symptoms, compared with about 7 percent for privately insured nonelderly people.

 “Individuals who are eligible for Medicaid tend to have more serious healthcare needs, and that’s what drives them to the emergency rooms, as well,” Maresca said. “It’s a question of how much of it is a reflection of their circumstances and overall healthcare status versus whether Medicaid is doing a good job or not.”

Rich Daly is a senior writer/editor, in HFMA’s Washington, D.C., office. Follow Rich on Twitter @rdalyhealthcare.  


Publication Date: Thursday, September 19, 2013