A new report by national accounting firm Crowe Horwath reveals that Medicaid expansion and healthcare reform accentuate a year of consistent progression toward a new delivery model in the healthcare industry.
The Crowe's Revenue Cycle Analytics Benchmarking Analysis report tracks reimbursement and revenue cycle changes and their impact on the balance sheets of more than 320 U.S. hospitals through Dec. 31, 2014.
"These data-driven metrics show interesting shifts in payer demographics and noticeable differences between volume and uncompensated care between Medicaid expansion and nonexpansion states," Derek Bang, CIO and leader of healthcare performance consulting at Crowe, said in a news release. "We are starting to see what happens to the hospitals that sacrificed reimbursements in order to finance other health insurance exchanges, under the assumption they would receive more revenue from patients covered by those exchanges."
Here are five key takeaways from the report:
1. In states that expanded Medicaid, Medicaid and Medicaid managed care claims increased nearly 6 percent of total gross patient service revenue from 2013 to 2014.
2. Medicaid expansion has significantly affected uncompensated care. The national market benchmark at the end of 2013 for bad debt and charity write-offs was 2.5 percent and 3.2 percent, respectively. By the end of 2014, bad debt and charity write-offs in nonexpansion states remained flat, according to the report. In expansion states, bad debt write-offs decreased to 2.3 percent while charity write-offs fell quite dramatically to 1.7 percent.
3. According to the report, the Kaiser Family Foundation found that the number of high-deductible health plans rose by approximately 50 percent from 2011 to 2014. In 2014, high-deductible health plans represented 18 percent of all employer- sponsored plans. The rise has caused providers to improve return on investment related to self-pay after insurance collections.
4. The two-midnight rule is causing a shift from short-term inpatient stays to outpatient observation. Under the two-midnight rule, CMS generally considers hospital stays of less than two midnights to be outpatient cases, while stays spanning two midnights are appropriate for payment under the inpatient prospective payment system rule.Overall inpatient admissions dropped 4 percent from 2013 to 2014.
5. Patients are shopping for better pricing and using less hospital services.
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