Medicaid Reform: The Latest Updates Your Need to Know

March 7, 2017 by Antonio Arias, MBA, CHBME

Topics: Meaningful Use Stage 2, Practice Management, Medical Billing Company

For patients and providers across the country, the uncertain future of the Affordable Care Act (ACA) has many on pins and needles. Since 18 million Americans currently receive healthcare coverage under the ACA, any repeal or drawbacks to the ACA policies would have an immediate and complicated impact on the U.S. healthcare system.

But another potential policy initiative could impact far, far more American patients (and providers). Medicaid reform – which would affect the nearly 20 percent Americans enrolled in Medicaid – is a distinct possibility in the near future. Proposals currently circulating would reduce or eliminate coverage for millions of people.

The new reform proposals (floated by House Speaker Paul Ryan and President-elect Trump’s nominee for Health and Human Services Secretary, Representative Tom Price) set out to reduce spending and give states more leeway over how they operate their Medicaid programs. To do that, they would convert Medicaid from a defined benefit to a block grant or per capita cap program.

That means that individuals who qualify for Medicaid benefits would no longer be guaranteed benefits. Rather, states would receive a fixed amount of money from the federal government to spend on Medicaid services. So even if enrollment in a given state spikes significantly in a given year, the amount of money supplied by the federal government would remain fixed at a specific rate. Though that rate would change over time, the size of the block grant would be set to increase at a slower rate from year to year than current federal Medicaid spending.

There is heavy opposition to the reform proposals among doctors and other healthcare providers. Safety net hospitals, rural facilities, and community health centers would be most affected by any cuts resulting from block grants or per capita caps, since they treat more Medicaid patients than traditional hospitals and medical practices.

Notably, however, these kinds of ‘per capita caps’ already kind of exist within the Medicaid system. More and more state Medicaid programs have entered managed care capitated programs – whereby they turned their funding and operations over to private health insurers and are given a lump sum of money for each person they cover (similar to per capita caps). Roughly 50 million Medicaid beneficiaries are enrolled in a managed care plan, and that number is growing every year.

Will that managed care approach become the norm? Will the policy proposals circulating come to fruition? Or will other privatization legislation or changes to the ACA supercede the latest Medicaid initiatives? For providers and patients in today’s uncertain times, only time will tell. Stay in contact with a trusted medical billing service to stay ahead of important changes.


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