Several states that have expanded Medicaid have also applied for Section 1115 waivers with the Centers for Medicare & Medicaid Services (CMS) to remove retroactive eligibility. Retroactive eligibility allows patients who qualify for Medicaid to have medical coverage paid for a full 90 days before they submit an application for Medicaid.
Eliminating retroactive eligibility helps states save money, particularly states that have expanded Medicaid. According to a 2017 report from Kaiser Health News, after expanding Medicaid, Iowa eliminated retroactive eligibility for Medicaid, except for pregnant women and children under the age of one. The elimination was expected to affect 40,000 people and save $36 million a year.
Eliminating retroactive eligibility has a substantial impact on vulnerable patients and the hospitals that deliver services to them. A patient may not ask to be enrolled in Medicaid because they don’t realize they are eligible. If they don’t have other insurance, that patient will incur hefty medical debt if they don’t enroll (or if a hospital doesn’t enroll them presumptively) in Medicaid right when they receive care.
Without retroactive Medicaid, a hospital doesn’t have room to correct an oversight to enroll a patient before care is provided, resulting in no reimbursement for care delivered and, potentially, a mountain of aging receivables.
Seven states have received CMS approvals for the elimination of retroactive Medicaid since 2017, with Kentucky being the most recent that will take into effect April 1, 2019. Arizona, Arkansas, Florida, Indiana, Iowa and New Hampshire also eliminated or reduced a form of retroactive Medicaid. Five other states have submitted 1115 waivers to eliminate retroactive Medicaid as of February 2019: Maine, Massachusetts, New Mexico, Oklahoma and Utah.
For hospitals, understanding the ins and outs of these waivers is critical. Each state has different proposals that define how it would eradicate retroactive Medicaid, including who the rule applies to plus variations on timing. Some states interpret benefits to be available based on the day an application is received, and not the day the application was submitted. What if an application is submitted when a patient comes in on a Saturday, and the Medicaid office is closed that day? Will coverage be extended? There are interpretation differences to the rules.
Comparing New Hampshire and Florida—two states with waivers—you can see the differences. In New Hampshire, retroactive Medicaid was removed completely. However, Florida—a non-expansion state—proposed to remove the 90-day period for retroactive Medicaid, but benefits will be extended from the beginning of the month the application is made. For example, if the date of service was January 10, 2019, and the application was received January 12, 2019, the approval date would be January 1, 2019.
For example, Florida proposed to remove the 90-day period for retroactive Medicaid, but benefits will be extended from the beginning of the month the application is made. If the date of service was January 10, 2019, and the application was received January 12, 2019, the approval date would be January 1, 2019.
What can hospitals do when they operate in a state that has eliminated or is considering eliminating retroactive Medicaid benefits?
A strong plan is necessary to remediate risks to a patient’s access to coverage and ensure compensation for care delivered rather than self-pay receivables. The focus should be on the following areas:
Many hospitals don’t have the infrastructure to handle such significant changes internally. Meanwhile, other hospitals have vendors that lack a footprint across multiple states or don’t have dedicated government relations personnel to understand and communicate education about the regulations. To learn more about our eligibility and advocacy solutions, contact Parallon.