How Hospitals Can Take a Proactive Role in Preventing Medicaid Churn

Broadly speaking, churn has always been a part of the Medicaid system. Circumstances can change quickly, or states can change Medicaid requirements and people often transition in and out of enrollment. However, in the healthcare finance industry, churn is often used as a negative term, considered something to be avoided. 

“Churn” occurs when people fall out of Medicaid coverage for a short period of time but eventually re-enroll. This is different from a permanent loss of Medicaid coverage, which often occurs when a patient transitions off of Medicaid due to ineligibility and moves onto a new coverage plan, like an employer-sponsored commercial insurance program. 

One of the worst case scenarios surrounding Medicaid churn occurs when a patient does not re-enroll in Medicaid despite remaining eligible. That patient then loses coverage without transitioning to a new type of insurance, leading to a lapse in coverage (and often care) that lasts indefinitely. 

Medicaid churn leads to increased administrative costs and lapses in coverage for vulnerable populations. Healthcare finance professionals often seek to minimize churn as much as possible to ensure patients have coverage for the care they need.

Medicaid redetermination and expected churn

During the COVID-19 pandemic and subsequent Public Health Emergency (PHE), the Medicaid continuous enrollment provision provided extra funding for states on the condition that they did not remove anyone from Medicaid enrollment. By halting disenrollment, churn was effectively also halted from March 2020 to present.

Today, as the PHE expires and we move through the Medicaid redetermination process, we will once again experience Medicaid churn. The question is - just how extensive will it be?

As states begin to disenroll Medicaid recipients who do not renew, an estimated 15 million people will lose coverage. Of those 15 million Americans, an estimated 6.8 million people will lose coverage despite remaining eligible.

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Due to social and income barriers, certain groups will likely be at a greater risk for losing coverage during redetermination, including low income families, people of color, chronically ill and disabled populations, children and non- or limited English speakers. 

It will also be challenging to contact and re-enroll patients who have moved and have not kept their address up to date with the hospital during the pandemic. In 2020, 10% of enrollees changed addresses or moved while remaining within the borders of their state, meaning they were eligible for the same state-sponsored Medicaid program but difficult to contact to communicate this eligibility and need for renewal. 

The concern here is twofold: One, how can we as healthcare finance professionals reach eligible populations to communicate the need to re-enroll? And two, how can we minimize “churn” or the time spent between Medicaid disenrollment and renewal - especially for vulnerable populations?

How to prepare for (and prevent) excessive Medicaid churn

A large percentage of Medicaid patients will lose coverage if they do not re-enroll or know to re-enroll in the first place. It’s easier to assist a patient in the re-enrollment process than to have them come in for care and then assist them with an entirely new application. 

New applicants come with a higher cost and delayed reimbursement, so there are financial and ethical incentives for hospitals to take a proactive role in the redetermination process by identifying affected patients and actively assisting them to prevent lapses in coverage. 

Luckily, the tools and partnerships you need to take a proactive role in redetermination exist and are available. Office Ally has been operating in the insurance verification and Medicaid eligibility and enrollment space for more than 20 years. We’re proud to serve as a trustworthy source of information and customizable software solutions to help you navigate through this challenging period.

These tools aren’t far-fetched dreams or inaccessible ideas. They exist, and thousands of providers are using them to navigate redetermination and avoid Medicaid churn by streamlining their workflows, improving processes and better serving patients. 

We’re here to help you navigate Medicaid redetermination from start to finish. Contact Office Ally today to connect with one of our experts for more information.