Ways that Medicaid Discounting Can Cause Hardships on the Facility

Accepting Medicaid Patients

Acute Care hospitals and children’s Hospitals generally under the Arizona Medicaid Program accept to offer Medicaid discounting and Medicaid services. Examples include; Geisinger, Intermountain Healthcare, and Virginia Mason.

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Ways that Medicaid discounting can cause hardships on the facility

Medicaid is a federal requirement that is administered by the states. This program is funded jointly by the federal and state governments. The beneficiaries must be either citizens of the US or certain qualified non-citizens such those that are lawful permanent residents. This program provides health coverage to tens of millions of citizens, including eligible elderly adults, low-income adults, pregnant women and disabled people (Fund, 2018). This program is philanthropic but has major setbacks to the facilities that offer the Medicaid services.

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In the states that impose work requirements, fewer covered Medicaid beneficiaries implies that the facilities will incur reduced revenues, have smaller operating margins and have increased uncompensated care costs. These effects will vary in each state depending on the payer mix, and the program design problems such as age limits.

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The number of enrollees who become uninsured Medicaid beneficiaries will lose their coverage with the health insurance if they are unable to find work, cannot document their work activity hours or cannot document on exemption. This will be hard for the state hospitals to earn anything from these beneficiaries. Their loss of coverage by the federal and state will affect the hospitals by decreasing the revenue and increasing the uncompensated care costs (Hoffman, 2018).

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The impact of this adverse effects will affect the entire community that is served by the hospitals because the hospitals will need to cut on the number of staff or eliminate crucial healthcare services so as to in a position to run the hospital. There are high levels of increased uncompensated care.

Hospitals that are located in states with high Medicaid payer mix are more reliant on the Medicaid revenues and will suffer the most that those that are states with lower Medicaid payer mix (Exterovich-Rubin, 2019). States that subject many enrollees to work requirements by increasing the age limits will be more adversely affected. If most enrollees are uninsured by losing their Medicaid coverage, the hospital uncompensated care costs will exponentially rise and the operating margins subsequently decline. Hospitals that are located in rural areas and implement the Medicaid work requirements will be most affected by this loss.

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What can be done to reduce any loss incurred by Medicaid Discounting?

To remedy the massive losses and reduce on the operating margins, hospital leadership must use analytics to identify ways to improve profitability, reduce costs of corporate services, sanction the buying and usage of medical technology, come up with standard clinical protocols and push the health care providers to adhere to them.

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Hospitals can use data analytics to develop a pathway to increasing profits. This can be done by 5%-15% expense reduction by forecasting cost elements on administration and in care provision. The facilities should curb spending on corporate services by taking advantage of economies of scale. The hospital leadership needs to get control of all the overhead costs and create a corporate service model that is responsive and efficient, tailored to match the needs of the facility (Hilferty, 2018). This can be done by sorting out the suitable level of the organization that is responsible for all main functions and making all decisions made to be clear and right. It is critical to gauge if is less costly to outsource some functions or provide them in-house.

Hospitals need to tighten their purchase and use of modern technology by making sure they only buy what is most needed and purchasing efficiently from one vendor. It is important for all hospitals to engage their workers in evidence-based reviews of their technology purchases, make sure they achieve consensus across all employees and use their economic leverage to decrease procurement prices. They can also be vigilant in tightening drug formularies in the pharmacies and use alternatives of the best available scientific evidence to lower the cost of procuring drugs.

Hospitals need to blueprint episodes of care to treat common problems. Variation in the way physicians handle a similar medical condition can lead to Medicare losses. It is critical that hospitals give choreographed care through scientifically-derived protocols (Collins, Glied, & Jackson, 2018). The hospital management has to make sure that the blueprint is adhered to. This creates clinical discipline.

It is important to follow all these steps to achieve and maintain control over the hospital finances. The key to reducing losses from treating patients covered with Medicaid is by minimizing the operating expenses of the facility. These strategies will result in better clinical outcomes financially. This will assure that the hospital improves its margin in the presence of demanding payment constraints. In case there are any federal deficits and corporate benefits costs increase, these strategies can chip in and salvage the situation avoiding financial upheavals in the facility.

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