With the expansion of Medicaid under the Affordable Care Act, Section 1115 waivers have become increasingly popular as states look for unique and more affordable ways to implement Medicaid and customize these programs for their state populations.
These waivers allow for research and demonstration projects, which are designed to test expanded eligibility or coverage options, along with methods for financing and delivering Medicaid.
But for hospitals, health systems and medical practices that rely on Medicaid reimbursement revenue, these stipulations create significant revenue cycle challenges. Not only do eligibility rules vary by state, but also the heavy burden of proof for exceptions to Medicaid work requirements and the work reporting requirements for recipients themselves put a heavier administrative burden on the front end of the revenue cycle.
Many of these Medicaid waivers seek to impose work requirements on individuals as a condition of Medicaid eligibility. Specifically, this criterion requires Medicaid recipients to work a minimum number of hours per week or per month to receive benefits, or to demonstrate participation in a job search or job training program. Currently, the Centers for Medicare and Medicaid Services (CMS) has approved such work requirements in six states, and 10 states have similar proposals pending, according to data from the Kaiser Family Foundation.
Other states have instituted enrollment restrictions related to wellness. In Indiana, for example, tobacco users are required to pay a premium surcharge. Michigan requires potential Medicaid recipients to complete a health risk assessment before being enrolled.
Beyond these requirements, the CMS has also approved waivers allowing states to use Medicaid funds to provide short-term inpatient and residential treatment for enrollees with drug addictions and enrollees with serious mental illness or emotional disturbance in institutions.
States may also pursue block grants known as the Healthy Adult Opportunity (HAO), which provide extensive flexibility to use Medicaid funds to expand programs without being bound by too many federal rules. But in exchange for reduced federal oversight, states must agree to a limit on federal financing.
Ultimately, the goal of these waivers is to enhance and promote Medicaid coverage and efficiency through “community engagement” incentives that incorporate work and health requirements into other state programs promoting wellness, increasing employment opportunities and improving financially-based social health determinants. States with these waivers are expected to assist recipients with job placement, connect them with employment and community programs, and provide opioid and other substance abuse treatment initiatives for programs with flexible work requirements. CMS officials hope this approach will drive greater independence and self-sufficiency for Medicaid beneficiaries and improve the long-term health outcomes for these patient populations.
However, providers must be equipped to do more benefits investigation and insurance and eligibility verification as well as navigate complex enrollment procedures to determine whether a patient qualifies for Medicaid and can be treated by the practice.
On the back end of the revenue cycle, practices must be prepared to verify and document information about the work hours, history and health habits of enrollees when submitting claims; manage denials from new and stricter requirements; and revamp their collections procedures to fit new Medicaid restrictions and incentive-focused plans.
Rather than collecting fees for each service performed, for example, they may need to bill for an entire bundle of services before performing any of them or after completing all of them. The amount of reimbursement they are able to collect may also be subject to change based on a patient’s health outcomes weeks or months after care is provided.
How can you upgrade your revenue cycle to meet the challenges of these new Medicaid work and wellness eligibility rules?
Keeping staff up-to-date on the latest requirements and making sure they are trained to handle and adapt to changes in clinical documentation, bill coding, claims submission, and denials and accounts receivable management are part of the equation. The rest revolves around data and providing staff with timely access to the information and analytics they need to track patient demographics, care gaps and inefficiencies, and costs.
Outsourcing these functions to a qualified vendor with the expertise and technology to adapt to these sweeping changes in Medicaid reimbursement can relieve pressure for your revenue cycle staff and help your organization achieve higher compliance and profitability.