Medicaid Cuts: Key Metrics to Monitor in Your Organization

Medicaid cuts totaling $1 trillion are taking effect across the country starting this year. These changes result from provisions in the recently passed One Big Beautiful Bill Act (OBBBA).

Many are unsure where to start as hospitals scramble to maintain compliance and prepare for Medicaid cuts. But the saying rings true: You can’t manage what you don’t measure. In this period of uncertainty and transition, start with your key metrics.

Putting the Scope of Medicaid Cuts in 2025 Into Perspective

Overall, the 2025 Medicaid changes represent a systematic and widespread shift in enrollment and reimbursement—and they come at a volatile time for the Medicaid program.  

The recent Medicaid unwinding began in 2022 and ran through 2024. As a result of the unwinding process, over 25 million people lost Medicaid coverage in that time period. OBBBA also coincides with the expiration of tax credits related to Affordable Care Act premiums. An estimated 5.1 million people may lose coverage due to the loss of these credits.  

In addition to these disenrollments, OBBBA is now slashing Medicaid funding, meaning an estimated 11.8 million people will lose coverage over the next decade. These changes are testing state budgets and prompting many states to seek new sources of revenue. It’s an exceptionally tumultuous time for Medicaid.  

Key Facts Related to Planned Medicaid Cuts

• OBBBA slashes more than $1 trillion from federal Medicaid funding over the next decade, marking the largest ever cut to Medicaid spending.
• An analysis by the Urban Institute estimates that states will lose $33.7 billion in Medicaid reimbursement dollars.
• Hospitals in Medicaid expansion states could see a 19% decrease in operating margins.  
• The Commonwealth Fund estimates a $14.3 billion rise in uncompensated care to hospitals as Medicaid recipients lose their coverage.
• Rural hospitals stand to lose $70 billion over the next decade, or 21 cents for every Medicaid dollar received.
• A total of 700 rural hospitals may be forced to close, and 300 are at risk of imminent closure.  

Considering all this, hospitals must prepare for a dual challenge: lower reimbursement for Medicaid patients who remain covered and a growing number of uninsured patients who are unable to pay for care at all.  

Start by knowing where you stand. Tracking key metrics will help you identify revenue leaks, make smart financial decisions, and prioritize areas for attention over the coming months.  

Top Medicaid Metrics to Monitor in Your Hospital

Enrollment & Coverage Metrics  

Enrollment & Disenrollment Rates

The percentage of patients enrolling in Medicaid and losing coverage (disenrollment) monthly. Knowing this number helps forecast shifts in payer mix. For example, a high disenrollment rate means fewer Medicaid dollars are coming, likely causing a spike in uncompensated care. Equipped with this knowledge, providers can better allocate staffing and billing resources.  

Churn Rates

Medicaid churn occurs when patients lose coverage and regain it later, usually within a few months. Higher churn leads to larger gaps in reimbursement. It’s preferable to have continuous coverage, but churn is likely to rise with impending Medicaid cuts.  

Monitor Medicaid churn to identify patients at risk of losing coverage and develop specialized, targeted outreach strategies to prevent lapses in coverage. For patients on the cusp of losing coverage, make sure they understand deadlines and actions required to re-enroll. For patients who have just lost coverage, try to help them meet the requirements to re-enroll as quickly as possible.

Coverage Transitions & Trends in Uninsured Patients

Uninsured Population Rate

This metric measures the rate of patients who identify as self-pay at intake. More self-pay patients usually means more bad debt and a lower rate of collected reimbursement. Knowing how many patients identify as self-pay immediately helps hospitals adjust budgets to prepare in advance and identify patients who may benefit from screening and enrollment into other financial assistance programs.  

Rise in Transitions to Other Coverages

As disenrolled patients lose Medicaid coverage, they may transfer to other sources of coverage, like ACA or employer-sponsored insurance programs. Knowing the rate at which patients enroll in different coverage sources helps hospitals understand how many people are actually disenrolled versus those who have mitigated coverage losses. This metric ultimately helps with forecasting and payer contracting decisions.

Financial Health Indicators

True Accounts Receivable (A/R) Days

“True” A/R days refers to the average number of days it takes to receive payment after claims submission. This number excludes credits and uncollectible amounts (write-offs) and shows the hospital’s ability to receive payment quickly for services rendered.  

Longer A/R cycles may indicate delays in Medicaid reimbursement or internal processing issues. Hospitals generally report median days in net patient accounts receivable of about 49 to 55 days across all payors, according to the American Hospital Association. Higher A/R days likely mean your organization is experiencing a higher rate of denials or other revenue cycle issues that need to be addressed.  

True A/R > 90 Days as % of True A/R

This metric refers to the percentage of total collectible A/R dollars over 90 days old. A higher rate usually indicates a growing backlog of unresolved claims or underpayments or a rise in Medicaid payment issues.

Across the industry, many hospitals have seen this percentage rise even when overall A/R days remain stable, according to the American Hospital Association’s hospital financial indicators. When large portions of A/R extend past 90 days, it can reflect payer-related slowdowns or gaps in internal follow-up. Regular monitoring helps identify whether delays originate with payors or processes inside the organization, prompting timely reviews and audits of the revenue cycle.

Bad Debt as % of Gross Medicaid Patient Service Revenue

Bad debt occurs when a hospital expects payment for services, but does not receive it. An increase in self-pay patients from Medicaid cuts will likely increase this metric. Tracking bad debt specifically tied to Medicaid patients helps hospitals understand whether the Medicaid cuts significantly impact the organization’s bottom line.

Final Denial Write-Off as % of Net Medicaid Revenue

This metric tracks the amount of expected Medicaid revenue that is ultimately written off due to claims denials that are not appealed or otherwise considered final. A high rate of final denial write-offs may require a second look at denial management, documentation practices or gaps in eligibility verification.

Medicaid Revenue Cycle & Claims Metrics

Initial Claim Denial Rate

This metric indicates the percentage of Medicaid claims denied upon first submission. Medicaid has one of the highest initial denial rates at around 12%. Hospitals should work to keep this figure low, especially since reimbursements are expected to be lower across the board. Work to submit as many claims as possible correctly the first time for maximum efficiency.

Medicaid Reimbursement Rate Trends

Keep an eye on overall trends in Medicaid reimbursement across departments. Tracking these numbers will show which services are holding steady, declining or improving in collecting reimbursement. This helps your team understand where to allocate resources and adjust budgets.

Denials Management Efficiency

Denials management efficiency is the percentage of denial claims that are successfully appealed and resolved. A higher rate of efficiency ensures providers are appealing claims with the highest probability of success to boost reimbursement and cash flow. This efficiency can ultimately help offset slow Medicaid responses as a result of OBBB cuts.

How Office Ally Can Help Your Hospital During Medicaid Cuts

Fortunately, providers don’t have to navigate this major transition alone. The right tools can mitigate risk while supporting staff and helping patients find options to replace lost Medicaid coverage.

Office Ally’s MAPS Self-Pay Management Platform allows hospitals to manage self-pay patient activity and identify patient eligibility and reimbursement opportunities — all in one place. With this comprehensive solution, hospitals can convert self-pay patients to reimbursement-eligible accounts and lower the overall cost to manage those accounts. Key features include:

• ‍Screening & Enrollment: MAPS quickly identifies the appropriate program coverage for screened patients so you can claim the largest reimbursement possible. Self-screening options streamline the process from the very start.  
• ‍Streamlined Workflows: Your team can easily use MAPS to improve efficiency through automation, document control and accountability, all while maintaining compliance requirements.
• ‍Robust Reporting: MAPS includes some of the most advanced management and reporting tools available in the industry. Customizable dashboards and analytics allow your team to monitor Medicaid-specific metrics, like the ones mentioned in this article.
• ‍Real-Time Claim Status: Check the status of each claim in the payer's adjudication system for a real-time understanding of reimbursement timelines.

The next five years will challenge hospitals to deliver quality care while contending with falling Medicaid reimbursements and an increasingly complex legislative landscape. With the right metrics in place and the right tools in hand, hospitals can stay financially resilient.

Office Ally’s MAPS helps providers easily find sources of coverage for self-pay patients. As an all-in-one platform for screening and enrollment, MAPS is ready to help hospitals weather this period of change while continuing to meet the needs of their communities.  

Ready to strengthen your revenue cycle strategy? Contact Office Ally today to learn how MAPS can support your hospital through Medicaid cuts and beyond.