An extension of presumptive eligibility coverage takes away Medicaid payment uncertainty if hospitals make the effort to participate and follow the rules.
Presumptive eligibility (PE) has allowed hospitals and other covered entities to screen for eligibility and temporarily enroll pregnant women and children in Medicaid. The Affordable Care Act (ACA) has extended that authority to all who appear to meet the standards.
"In the past, if a hospital signed a person up for Medicaid upon admission, you were gambling to a certain extent about whether you would get paid," said Sean Riesterer, former director of revenue cycle and reimbursement at Silverton Health in Silverton, Ore. "With PE, as long as a hospital follows the rather simple rules, they will get paid for covered services during a set period of time."
Hospitals can opt in or out of the program without regard to whether their particular state expands Medicaid coverage. Hospitals have to agree to abide by state policies and procedures, but the decision to participate in the program is solely at their discretion.
The participating entity will obtain demographic and income information from the patient. If patients meet the criteria for Medicaid, the intake worker can determine them to be presumptively eligible and essentially sign them up for a limited period of time.
"Although it does provide temporary coverage immediately, there are also features that guide patients toward submitting a full application for insurance coverage," said Riesterer. "This allows the hospital for the first time to act as an agent in making eligibility determinations for state Medicaid programs."
How long eligibility lasts depends on the patient. If a full application is submitted by the end of the month following the month of PE determination, coverage continues until Medicaid makes a final decision. If there is no follow-up, eligibility expires at end of the month following the month of determination.
There are some safeguards put in place, and states have some latitude in how these are structured. States may disqualify a provider if a certain percentage of those enrolled through PE fail to submit full applications or if error rates are too high.
"Each state is required to establish PE standards for their hospitals to follow," said Mary M. Sonier, director, patient financial services at Lancaster General Health in Pennsylvania. "In addition, states have to provide training on PE rules and encourage facilities to reach out to them for any assistance. However, there is some flexibility in how states administer PE determinations, so hospitals should make sure they understand their specific state's requirements."
Some studies suggest that PE could boost overall enrollment in Medicaid by 6.4 percent. This may mean more money is available to hospitals as patients are moved from charity care or self-pay to the federal program.
"The financial impact, either positive or negative, remains to be seen," noted Sonier. "In theory, hospitals would hope to see an improvement since those patients are now covered. There is a concern that our Medicaid reimbursement is low relative to the cost of high-quality care and a gap could still remain."