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How Resumed Medical Redetermination Could Take 10% of Your Revenue This Year

Jan 19, 2024 12:23:35 PM / by Altruis

medicaid costs

Did you know that the reinstatement of Medicaid requirements and medical redetermination could lead to a 10% revenue loss? The reason is complex but critical to understand when overseeing Medicaid costs at a federally qualified health center (FQHC).

This article explains how medical redetermination could impact your revenue and what you can do to minimize the disruption and protect your financial stability.

What is Medical Redetermination?

Medical redetermination is a formal process through which a healthcare payer reviews and reevaluates a previously made decision regarding coverage or reimbursement for medical services. This process is typically initiated when a beneficiary, healthcare provider, or medical facility disagrees with the initial decision made by the payer, such as an insurance company or a government health program. Redetermination can impact a medical facility's revenue by introducing delays, administrative challenges, and financial uncertainties. 

How Did the Pandemic Impact Medicaid Costs?

When the COVID-19 pandemic began, the U.S. Congress enacted the Families First Coronavirus Response Act (FFCRA) to expand and preserve healthcare coverage. The FFCRA covered the cost of COVID-19 testing and provided additional funds for nutrition assistance to help keep people healthy in a time of crisis.

In addition, the FFCRA required Medicaid to keep people continuously enrolled through the end of the public health emergency. Medicaid gained additional funds from the FFCRA and suspended certain activities, allowing their staff to focus on handling the nationwide health crisis. As a result, Medicaid coverage was maintained, and there was no medical redetermination until the requirement was lifted on March 31, 2023.

Resumed Medical Redetermination

Now regular processes are resuming, which is sometimes termed unwinding continuous enrollment because healthcare organizations must find a way to unravel the complex protocols they put into place to comply with the FFCRA and other regulations. Across the U.S., healthcare providers are at risk of losing revenue as Medicaid reevaluates coverage and previously covered care is no longer included.

How Does Medicaid Redetermination Impact Revenue?

Medicaid covers 89.9 million low-income people who might otherwise not have adequate health coverage. When someone qualifies for Medicaid, their coverage level and how long their coverage will last are determined by a process known as redetermination.

During redetermination, Medicaid reviews the person’s income and other factors used to decide whether eligibility requirements have been met. The goal of redetermination is to ensure the person can continue to receive the coverage they need, as long as they qualify. The Medicaid redetermination process typically happens regularly, every few months or at least every six months, but it was suspended during the COVID-19 crisis.

With the reinstatement of normal Medicaid requirements, many healthcare providers will now experience a considerable loss of revenue as the Medicaid redetermination process resumes and coverage comes into question. Patients may lose Medicaid eligibility as a result of redetermination requirements, so their providers lose those reimbursements.

Projections are showing a 10% loss in revenue for healthcare providers due to redetermination resuming and a large-scale loss of coverage for an estimated 15 million Americans. A Kaiser Family Foundation study found that 83% of providers are bracing for the impact of a Medicaid revenue decline. 

This is a trend to watch in the coming year because it could drive a significant loss in revenue for your organization. However, there is a strategy to combat the loss.

If you have a backlog of unrecovered accounts receivable from patients who may or may not be Medicaid-eligible, you can use retroactive Medicaid to recover payment for many of these aging claims. This reduces the impact of medical redetermination and allows you to claim as much revenue as possible in the following ways.

Retroactive Coverage for Previous Medical Expenses

For healthcare providers, including FQHCs, retroactive Medicaid coverage provides compensation and reduces the negative consequences of uncompensated care costs.

Reducing the Risk of Medical Debt

Retroactive coverage lowers the risk of patients encountering major medical debt and shying away from getting medical care. As a result, provider FQHCs maintain patient volume and bring in the associated revenue.

More Stable and Efficient

It takes time and staff hours to seek payment for uncompensated services, so this provides an efficient way to ease the burden. It promotes financial stability by mitigating the impact of redetermination.

How Can Altruis Help Maximize Revenue?

Altruis can help with redetermination by assessing your billing processes and finding new strategies to ensure your organization is always maximizing its revenue. Our team helps minimize Medicaid costs while optimizing your revenue cycle management so it runs smoothly and profitably.

To learn more about the impact of medical redetermination, please contact us for a free billing assessment.


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Topics: Medicaid Costs


Written by Altruis

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