Background: Beginning January 1, 2014, under the Affordable Care Act (ACA), 28 states expanded Medicaid eligibility to include additional low-income individuals aged 19-65 years. As a result, an estimated 10.5 million low-income Americans newly gained access to health coverage. Initial projections suggest that Medicaid expansion states will see a 16% reduction in uncompensated care provided by hospitals.
The hospital medicine group (HMG) at the University of Colorado, a Medicaid expansion state, is a 48-provider group at a large, academic tertiary care hospital; the HMG cares for approximately 30% of all hospitalized patients. We sought to determine how the ACA has impacted the payer mix and hospitalist reimbursement at our academic medical center.
Methods: This was a retrospective cohort study in which we analyzed a validated database of 9,724 inpatient discharges during 2013 and the first 6 months of 2014 on our hospitalist services, excluding our Oncology services. Chi-square tests were used to evaluate the proportion of each payer source (Medicare, Medicaid, Private, Indigent/Self-Pay, Other) before and after expansion.
We determined the number of each encounter code (CPT codes 99221, 99222, 99223, 99231, 99232, 99223, 99238, 99239) before and after Medicaid expansion, and multiplied by the average reimbursement per payer for each code to obtain the total physician reimbursement for our HMG. We assumed a 10% collection rate for our indigent/self-pay population in both cohorts. Finally, we standardized visits to reimbursement per 100 encounters and compared total standardized reimbursement for hospitalist services before and after Medicaid expansion.
Results: We evaluated 6,395 discharges in 2013 (before expansion) and 3,329 discharges the first 6 months of 2014 (after expansion). The percentage of Medicaid discharges increased from 15.0% before expansion to 27.1% after expansion (p <0.001), and indigent/self-pay discharges decreased from 20.0% to 8.5% (p <0.001) over this time. Medicare discharges increased slightly (44.9% to 46.7%, p = 0.080), private payer discharges decreased (16.6% to 14.6%, p 0.011), and discharges with other payer sources (e.g., Tri-care, special accounts) remained stable (3.5% to 3.1%, p 0.238) over this same time. The average standardized physician reimbursement per 100 encounters increased from $8,544 in 2013 to $9,186 in 2014, a relative increase of 7.5% in physician reimbursement after the ACA and Medicaid expansion went into effect.
Conclusions: Since the ACA and Medicaid expansion, our HMG has seen a near doubling of Medicaid encounters and a dramatic decrease in indigent/self-pay encounters. Given that uninsured or self-pay admissions comprise the majority of uncompensated care, there has been a substantial decrease in uncompensated care as a result of the ACA and Medicaid expansion. Due to this shift in payer mix, our HMG has seen an overall increase in physician reimbursement.