4 Strategies to Optimize the Medicaid Redetermination Process

Believe it or not, Medicaid redetermination, also known as renewal or unwinding, kicked off just one year ago. We’re already 12 months into a complicated process that has upended health care for both patients and providers. 

To recap: During the initial stages of the COVID-19 outbreak, the United States government announced a public health emergency (PHE). The Families First Coronavirus Response Act (FFCRA) subsequently provided extra Medicaid funding to states, provided they stopped disenrolling patients from the program for any reason. This provision resulted in a 27% surge in Medicaid enrollment, covering nearly 91 million Americans by late 2022.

Before the PHE, state Medicaid programs conducted annual patient evaluations to verify eligibility. Last year, these evaluations resumed, and beneficiaries once again needed to submit their information annually. As of this writing, the Kaiser Family Foundation estimates that 17.4 million Medicaid patients have been disenrolled, exceeding initial estimates of 15 million.

Healthcare systems of all sizes have faced significant consequences due to Medicaid redetermination, some of which have already occurred. The good news is it’s never too late to create a culture of proactivity. Systems that work to manage Medicaid redetermination now can still be beneficial for supporting a healthy revenue cycle in the future. 

Medicaid Redetermination’s Impact on Patients

Many individuals who enrolled in Medicaid during the Public Health Emergency (PHE) have not re-enrolled, possibly due to a lack of awareness or understanding of the renewal process. Some states still employ intricate, paper-based systems that can be challenging to navigate. 

Additionally, reaching certain patients for re-enrollment initiation proves difficult, particularly those facing unstable housing or communication challenges. The absence of current addresses further compounds the issue, as these individuals may never receive paper-based communications.

Eligible Americans at risk of losing Medicaid coverage are diverse and not confined to a specific demographic. Still, research indicates that the most vulnerable populations, including low-income groups, people of color, individuals with chronic illnesses, and children, are particularly susceptible to coverage loss.

Medicaid Redetermination’s Impact on Hospitals & Healthcare Networks

Unfortunately, the redetermination process began at an already tumultuous time for American hospitals and health systems. The pandemic completely upended established systems, leaving financial and operational chaos in its wake. 

Notably, margins are much tighter. According to Kaufman Hall, the median year-to-date operating margin index for hospitals was 0.0% in April 2023. Labor costs also shot up, increasing 20% from March 2022 to March 2023, right before the start of redetermination. A labor shortage combined with increased hospitalizations during the pandemic required hospitals to tap into contract labor, which costs approximately 150% more than regular wages for the same positions.

These issues leave little financial flexibility to handle new challenges brought about by redetermination. We've seen increased self-pay patients, lost revenue due to bad debt, increased charity care, and more pressure on existing resources. 

Ensure a Proactive Approach to Medicaid Redetermination

Despite these obstacles, predictions that the most successful providers would take a proactive approach to Medicaid redetermination have come to fruition over the past 12 months. Hospitals that worked to educate patients, monitor changes in redetermination, and assist patients in re-enrolling set themselves up for success.

It’s never too late to join the ranks of the well-prepared. The following four strategies can prevent lost revenue over the last few months of unwinding. Still, they have wide-reaching effects that can last beyond redetermination and prepare teams for future disruptions.

1. Educate Patients on the Redetermination Process

If your team began a patient education and outreach campaign during redetermination, there’s still time to dial it up. Millions of patients have been disenrolled for procedural reasons and need assistance finding new coverage or reapplying for Medicaid benefits. 

One year into redetermination, patient education is still a vital process component. Putting systems in place now can help patients understand coverage options in the future, even after unwinding finishes. 

Advise patients on re-enrollment and share easy-to-understand, step-by-step resources for coverage options. Offer to help patients complete paperwork and set up systems for those facing literacy and language barriers. Make it easy for patients to submit this information digitally or in person. 

2. Improve Management of Self-Pay Patients

Self-pay patients are always a challenging subgroup to manage, but the context of redetermination complicates things even further. Millions of patients losing coverage translates to an increase in self-pay patients. Hospitals must have processes in place to manage this influx and avoid revenue leakage, especially those that rely on Medicaid coverage as a significant source of income. 

Redetermination is a big reason for reassessing self-pay management procedures, but it is not the sole catalyst. Embracing proactivity and ongoing enhancements is valuable, especially now that hospitals know firsthand the importance of having systems in place before encountering major industry upheavals.

Technology-based solutions are essential in this area. The self-pay patient journey is rife with opportunities for human errors, denials, and accounts falling through the cracks and ending up in collections. The best strategies to improve self-pay management for Medicaid redetermination involve tightening things up with automated systems, digital patient outreach, and data-driven insights.

3. Actively Identify & Avoid Medicaid Churn

Churn takes place when individuals temporarily lose Medicaid coverage but eventually re-enroll. It contrasts with the permanent loss of Medicaid coverage, typically when a patient transitions from Medicaid to a different coverage plan, such as an employer-sponsored commercial insurance program.

A particularly concerning situation related to Medicaid churn is when an eligible patient does not re-enroll in Medicaid. In this scenario, the individual loses coverage without transitioning to alternative insurance, resulting in an indefinite lapse in coverage and, often, a gap in care.

One proactive solution to Medicaid churn is an investment in an insurance discovery solution. Insurance discovery automatically takes patient accounts and runs an exhaustive coverage check of potential government and commercial payors. Even if patients fall out of Medicaid coverage, insurance discovery can automatically determine if they still qualify, prompting staff to help the patient reapply or qualify for a different source of coverage. 

Insurance discovery prevents accounts from sitting without reimbursement for months or requiring staff to check coverage manually. It’s an easy first step to combat Medicaid churn that lasts far beyond redetermination. 

4. Stay Up to Date with New Policies

The official timeline of the Centers for Medicare and Medicaid Services (CMS) specified redetermination would officially start April 1, 2023. At this point, CMS permitted states to begin the process via four pre-established approaches to unwinding. 

Since then, CMS has provided guidance and occasionally implemented pauses in different states. In July 2023, CMS discovered an alarming number of errors and violations in federal guidelines and paused redetermination efforts in around “half a dozen” states. The process paused again in 12 states in September 2023 due to “disenrollment and procedural issues.”

Hospitals need to know CMS guidelines and quickly implement changes in response. We can expect guidance to last beyond the official end of unwinding. The aftermath of redetermination will still require action and attention as hospitals grapple with millions of patients newly without coverage. Designate one or more staff members to keep track of policy updates and lead any necessary changes in response. 

Again, this strategy has implications reaching beyond redetermination. Healthcare professionals know the industry is continually facing policy changes on the federal and state levels. Staff must be made aware of these changes and receive strict instructions on how to proceed. Now is an excellent time to start remaining compliant in the future.

Empower Your Medicaid Redetermination Process Now

Medicaid enrollment is transitioning from manual county-based systems to state- and consumer-centric online tools. Hospitals can access new technology tools, some designed specifically for certified application counselors and assisters. Providers need to understand what resources are available for both patients and staff.

At Office Ally, we provide technology-based solutions that harness comprehensive data to help providers understand patient eligibility and coverage options, including comprehensive insurance discovery. We also offer MAPS, an all-in-one technology solution to facilitate patient screening and enrollment into new coverage programs.

The Medicaid redetermination process will inevitably provide hospitals with valuable knowledge that will help improve patient relationships and manage future disruptions. For best results, use this time as a learning opportunity to reevaluate your processes and make necessary improvements. Start by learning more about revenue recovery tools from Office Ally.