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Is Your Practice a Medicaid Provider?
Surge in Medicaid Enrollments
Last spring’s high unemployment rate enabled more Americans to be eligible for Medicaid than ever before. Dramatic enrollment increases were confirmed by all the primary health insurance companies who serve Medicaid patients.
There are several reasons why this trend is expected to continue throughout 2021:
As a result, healthcare providers can anticipate that Medicaid enrollment will continue to increase in the coming months.
Medicaid provides an essential service, allowing millions of Americans to receive healthcare services which they otherwise could not afford. With programs managed at the state level, individualized needs are met.
The Medicaid-to-Medicare fee index measures physician fees relative to Medicare fees and varies by state. Doctors in states with higher ratios are more likely to accept new Medicaid patients.
According to the Kaiser Family Foundation, the overall national Medicaid-to-Medicare index is 72%; Colorado scores are higher at 80%.
Since 2011, the vast majority of Colorado Medicaid beneficiaries have been enrolled in managed care plans. Providers are paid a monthly per-member fee in addition to the standard Medicaid fee-for-service (FFS) reimbursement. The difference is that the managed care fee provides upfront fixed payments for anticipated use of covered services, as well as administrative costs and profit.
The state of Colorado is currently serviced by two Managed Care Organizations (MCOs): Denver Health Medicaid Choice and Rocky Mountain HMO. Healthcare providers have the option of contracting with one or both of these MCOs to treat their Medicaid patients.
With FFS, the state pays healthcare practitioners directly for each Medicaid-covered service provided. Once managed care reimbursement for a service has been exhausted, FFS claims can be submitted. FFS rates are tailored to pay only for those services that an eligible patient has specifically received. In Colorado, that figure is around 80% of the provider’s standard fee. (See box, “Medicaid-to-Medicare Fee Index.”)
Benefits to Accepting Medicaid
There are several advantages to becoming a Medicaid provider, specifically:
You become part of the solution.
Medicaid beneficiaries have much better access to care than the uninsured population. Which means they’re less likely to postpone or go without healthcare because of the cost. Nationally, more than 43% of all Medicaid beneficiaries are kids. (At least 40% of all Colorado children are beneficiaries of the program.) Because of Medicaid, these children can receive annual checkups, necessary vaccines, and appropriate medications whenever needed. It also covers disadvantaged families who require special care.
Access to a large potential patient base.
There are households within every community that qualify for the program. For example, as of September 2020, more than 77 million people — over 23% of the U.S. population — were enrolled in Medicaid. What’s more, every state publishes a list of participating providers, so there’s no need to advertise. If you’re establishing a new practice, this built-in customer base can be particularly helpful.
Medicaid provides a guaranteed stream of income which can sometimes be even more reliable than private insurance. In fact, Health First Colorado claims to pay faster than most private payers, through weekly claims that are deposited directly into a provider’s business account.
The EHR Provider Incentive Program provides financial support for Medicaid providers who adopt or upgrade their EHR systems.
Colorado’s Medicaid Milestones
1969 – Colorado authorizes Medicaid program.
1985 – Colorado expands managed care in Medicaid by adopting Home and Community Based Services (HCBS) program.
1998 – Colorado enacts Children's Basic Health Plan Plus (CHP+).
2013 – Colorado approves Medicaid expansion through the Affordable Care Act (ACA)
2014 – Colorado introduces integrated care for Medicaid and Medicare.
2020 – Colorado witnesses a surge in enrollments fueled by COVID pandemic.
Why Don’t All Providers Accept Medicaid?
- Medicaid reimbursements are 28% less than those of private insurance nationally, and timing on payment is not guaranteed. Also, fees for missed appointments must be waived.
- Because of additional documentation required for Medicaid reimbursement (as opposed to private insurers), administrative overhead can be higher. In addition, pre-authorization may sometimes delay delivery of treatment, so more appointments may be required.
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Center on Budget and Policy Priorities
Kaiser Family Foundation
Colorado Department of Healthcare Policy & Financing
Health Research Funding
2150 Lelaray Street
Colorado Springs, CO 80909
P.O. Box 140
Colorado Springs, CO 80901