Medicaid enrollees’ ED use won’t drop until Medicaid programs provide more office-based primary care coordination, one researcher says.

June 20—The Medicaid eligibility expansion under healthcare reform increased emergency department (ED) visits and shifted hospital payer mix from uninsured patients to Medicaid in 2014, new research found.

In a comparison of states that expanded Medicaid eligibility in 2014 under the Affordable Care Act (ACA) with states that did not expand, ED visits per capita increased by 9 percent in expansion states, or from 46 to 50 per 1,000 individuals. Meanwhile, visits in non-expansion states barely increased by the end of 2014.

The findings indicate that the ACA’s Medicaid expansion resulted in 1.13 million additional ED visits in those states in 2014, the authors extrapolated.

Additionally, the share of Medicaid-covered visits increased sharply in expansion states, from 35 percent of the total in 2013 to approximately 48 percent by the end of 2014. In non-expansion states, the Medicaid share of visits “increased only slightly,” according to the report.

The good news was that uninsured discharges decreased by 12 percentage points in expansion states and by four percentage points in non-expansion states.

Among the possible consequences of the increased utilization is that the Medicaid expansion exacerbated ED crowding, which research suggests increases hospital mortality, length of stay, and costs, the study authors noted.

The trend also runs contrary to the promise that the ACA would shift uninsured who had been using EDs as primary care centers to more appropriate sites of care. Reduced ED use also is a common endpoint in the federal government’s value-based payment models.

“I see it as an important wakeup call for everybody across the continuum,” said Zachary Hafner, partner at the Advisory Board. “The overall cost trend cannot be dealt with unless we deal with the challenging obstacles, and the use of the [ED] and the related rate of inpatient admission for people who come into the [ED].”

A recent poll by the American College of Emergency Physicians found that, after implementation of the ACA’s major coverage provisions in 2014, two-thirds of emergency physicians said that demands on their time were increasing and 70 percent believed that their EDs were not adequately prepared for large changes in volume.

Laura Medford-Davis, MD, an assistant professor at Baylor College of Medicine and an ED-use researcher, said she was not surprised by the increased utilization because those beneficiaries have limited access to outpatient care and may be used to accessing the ED instead of clinics from when they were uninsured.

“Other research has shown that once turned away from a clinic or sent from a clinic to the ED, patients will continue to choose the ED first for future healthcare needs,” Medford-Davis said in an email.

Previous Findings

The increase in ED use by Medicaid enrollees in the new study was even larger than that found in the Oregon Health Insurance Experiment, which also found that Medicaid expansion drove ED utilization. However, the results differed from some other research, such as a California study that concluded utilization would drop after an initial surge.

“Once you have coverage over time, your use should get normalized,” said Nadereh Pourat, PhD, director of research and the director of the Health Economics and Evaluation Research Program at the UCLA Center for Health Policy Research, and an author of the California study.

That hasn’t happened yet because many Medicaid programs do not provide the type of office-based primary care coordination that was available to the population she studied, Pourat said in an interview. ED use by California Medicaid enrollees has increased by about 75 percent since the state expanded eligibility under the ACA, according to recent state figures. She expects that utilization to eventually decrease through care management programs of Medicaid plans in the state.

“If you just give coverage to someone but you don’t connect them through the system and make it easy for them to get the primary care or specialty care that they need, you’re not going to see a change in the ED use,” Pourat said.

The authors of the new study noted that some earlier research that did not find an increase in ED use was limited to certain hospitals, while the recent study examined all hospitals in 25 states (14 expansion states and 11 non-expansion states).

Hospital Consequences

The study results raised a range of financial questions for hospitals because Medicaid typically pays a significantly lower portion of charges compared with other payers. At least one analysis found the uninsured may pay more in self-pay amounts than Medicaid pays for select conditions.

Hospitals also are girding for large cuts in federal Disproportionate Share Hospital funding in 2018, which will reduce Medicaid revenues to EDs.

In contrast, ACA marketplace coverage of the previously uninsured was expected to reduce ED bad debt and potentially help balance sheets.

Some hospitals that are deeply invested in value-based payment models or that operate larger insurance arms are working to reduce their inappropriate ED usage, Hafner said in an interview. However, the finances of fee-for-service Medicaid, through which most hospitals continue to receive payment, offer no incentive to try to shift patients away from EDs.

But payers are increasingly focused on the ED and the spending it drives.

“That is the largest impactable driver of total costs in the health system that has been identified to date,” Hafner said. “How to go after and tackle ED utilization is one of the top priorities for every payer out there, and that makes it a priority for providers as well.”

Although most payers—including about half of state Medicaid programs—have tried to increase patient cost-sharing, some analyses indicate that effort is undercut by hospitals that choose to cover Medicaid patients’ out-of-pocket costs. A new trend sees some payers denying coverage for non-emergent care.

“There’s potential for some real short-term anxiety around that until the policy either sinks or swims with the market,” Hafner said.

The findings also come as hospital advocates both push the remaining 19 states to expand Medicaid and try to keep congressional Republicans from enacting legislation to roll back much of the ACA’s Medicaid expansion through the American Health Care Act (AHCA).

The research was likely to have little impact on the Medicaid expansion debate because it conversely confirmed what both hospital executives and opponents of the ACA expected, said Christopher Pope, a senior fellow at the Manhattan Institute. Specifically, the ACA’s Medicaid expansion was expected to provide financial benefits for hospitals but drive higher overall healthcare spending.

“The claims that the Affordable Care Act was going to reduce ED utilization were a mixture of wishful thinking and people who weren’t that well informed about the issue,” Pope said.

Senate Republicans said they expect to publicly release their version of the House-passed AHCA this week and to vote on it as soon as next week. If passed, the measure still would need to be passed by the House or go to a conference committee to resolve the discrepancies between the House and Senate versions and then be passed again by both chambers.

Pope expects Republicans to push for AHCA passage before departing for Congress’ August Recess.

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

Publication Date: Tuesday, June 20, 2017