Are you Ready for Medicaid “Unwinding”? Six Steps Hospitals Can Take to Prepare

The phase-out, or “unwinding,” of the three-year Medicaid continuous enrollment program began on April 1st, and states have started to disenroll ineligible members.1 They have 12 months to complete the re-certification process.

8.2 Million Medicaid enrollees will lose Medicaid/CHIP coverage as estimated by HHS.

The HHS estimates that around 8.2 million Medicaid enrollees, of which 5.3 million are children and 4.7 million are adults ages 18 to 34, will lose Medicaid/CHIP coverage.2 These individuals could find it incredibly challenging, especially those that live in one of the 12 non-expansion states. The HHS suggests that hundreds of thousands will have incomes that are too high to qualify for Medicaid but too low to qualify for Marketplace tax credits.

Impact on Patients

First and foremost, the unwinding is likely to confuse enrollees who may find it difficult to understand the details of their change in coverage. Each state will have its own method and timing for the recertification process. According to an article published by Catholic Health World, few are going out of their way to make it a smooth transition for enrollees.3 With many state agencies still experiencing staffing shortages, enrollees are likely to experience long hold times when calling into overwhelmed state agencies for help.

The situation could be dire for those losing their coverage completely. Many of these individuals will lose access to a primary care provider, leading them to put off care and stop taking their medications. For those with chronic conditions like diabetes or heart disease, the result could be life-threatening.

Impact on Providers

The recertification could cause chaos for American hospitals as they face an increase in the number of uninsured patients using the emergency room because they see no other options. Unless hospitals increase their attempts to find financial assistance for these individuals, they will likely experience an increase in write-offs and charity care.

The impact goes beyond those patients who are losing coverage though. Those whose coverage has been altered may find it difficult to navigate the changes. This means they will likely depend on the hospital to educate them on their new coverage. But hospitals, especially those with limited staff, may be hard-pressed to find the patient’s new coverage and eligibility information in the first place. Already overburdened staff will have to spend more time researching and checking multiple sources to ensure they’ve got the most current, accurate information.

the unwinding of Medicaid will make it exceedingly difficult to predict and protect revenue.

The bottom line for providers is that the unwinding of Medicaid will make it exceedingly difficult to predict and protect revenue, especially for hospitals whose payer contracts are based on volume. This volume will now be difficult to estimate. At the same time, providers are also likely to see denials soar as it becomes more difficult to determine eligibility. If that weren’t enough, they should also prepare for patient payments to become even more challenging to collect, especially self-pay payments.

Where to Turn

There are many steps hospitals and health systems can take to mitigate the impact of Medicaid unwinding. The following are six opportunities that can be implemented quickly and can deliver a reasonably quick return on investment.

The Time to Act is Now

Although states have 12 months to complete the recertification process, hospitals shouldn’t wait. Taking proactive steps now can help protect their bottom lines and ensure long-term financial viability.


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