As Idaho lawmakers and policy advocates consider the possibility of expanding Medicaid eligibility across the state, there is also a focus on a facet of the program that could offer financial benefits to health care providers: Medicaid grants its recipients retroactive coverage for health care services, a feature that is not provided by private insurance.
“One has to have an insurance policy in hand before they receive treatment, if they expect to have that treatment covered,” Rep. Pete Nielsen, R-Mountain Home, said of private insurance coverage. Nielsen is an insurance agent and told IdahoReporter.com that “I’m not aware of any private insurance provider that extends retroactive coverage for health care services in the way that Medicaid does.”
But Medicaid does often cover health care services retroactive to the time that the services are actually rendered.
“Retroactive coverage happens when a person is eligible for Medicaid, but isn’t yet enrolled and is treated by a medical provider,” explained Niki Forbing-Orr, spokesperson for the Idaho Department of Health and Welfare. “For example, a person could go to the ER of a hospital for a medical emergency and when the hospital does the claims paperwork, it discovers the person is eligible for Medicaid and advises him to apply for coverage. The person can apply and receive coverage for up to 90 days before treatment if they met eligibility requirements during those 90 days.”
Forbing-Orr added that the retroactive feature of Medicaid coverage is something mandated by
federal law. “It is intended to help reduce risk and cost to providers and to minimize the impact to state funds when medical treatment or emergencies occur and low-income people are not covered,” she said. “Income and household circumstances are verified for the month of application as well as the three months before the application date to ensure the individual or family met all Medicaid requirements during that time period.”
Begun in 1965, the Medicaid program provides certain health care services to individuals and families with low incomes and limited resources. Financed with a combination of federal and state tax revenues, the increasing costs of Medicaid have in recent years become a topic of growing concern among the individual states, despite the eligibility of the program being based on a variety of means testing processes.
A key element of President Barack Obama’s Affordable Care Act (Obamacare) law was to have mandated that the individual states reduce eligibility requirements for Medicaid and expand the number of participants in their respective programs. However, the United States Supreme Court overturned that component of the Obamacare law, so expansion of Medicaid is now left as an elective choice for each individual state.
The fact that Medicaid expansion is now only optional and not mandatory has at least one Idaho health care industry leader concerned. Corey Surber is the executive director for community health and public policy for the St. Alphonsus Health System. She said a primary objective of the federal Obamacare law has always been to extend insurance coverage to approximately 30 million people in the country who presently have none, and this expansion of federally funded insurance coverage means less federal funding for other types of government-funded health care related programs.
“The federal financing mechanism for this additional insurance coverage was to have been derived from a combination of both increased taxes (federal taxes on the purchase of treatments, medications, medical devices and insurance itself, which will be paid by those who actually purchase such things), and by reducing the amount that the federal government reimburses health care providers for services delivered to Medicare patients (Medicare being a federal health care program for the elderly and disabled),” she told IdahoReporter.com.
She added that hospitals are required by federal law to treat anybody who seeks treatment regardless of their ability to pay for it. The expansion of Medicaid—with its retroactive coverage that is in many respects better than private insurance—was to have served as a sort of cost “hedge” for health care providers who will be compensated at a lower rate in the coming years when they treat Medicare patients. But the providers are still required by law to treat everybody who comes through their doors.
Now, with the possibility Medicaid not being expanded, Surber says that financial trouble for health care providers could be on the horizon. “We’re going to have a pay cut,” she told IdahoReporter.com. “We estimate that we’ll lose about $500 million in the first 10 years because of the reduced Medicare payments.”
So would an expansion of Medicaid eligibility and a presumed increase in the number of Medicaid patients be a good thing, financially, for health care providers?
“Absolutely,” Surber responded. “Getting reimbursed is better than not getting reimbursed, obviously. It would be an improvement for physicians and health care provider groups.”
Given the retroactive reimbursement flexibilities of Medicaid that don’t exist with private insurance, Nielsen suggests that he and other members of the Legislature need to consider the possibility that some health care providers may come to prefer Medicaid patients over those with private insurance.
Sen. Branden Durst, D-Boise, doesn’t seem as concerned about that. “I suspect doctors would prefer that patients be on private insurance because the reimbursement rate is higher,” he told IdahoReporter.com. “However, some reimbursement is better than none. Also, given that doctors are compelled to treat for a lot of ethical and legal reasons, allowing for retroactivity is only common sense.”