Prepping for more uncompensated care at safety net facilities

Many of our clients are smaller provider organizations, some in fact, provide services primary through Community Health Workers (CHWs) while others are more clinically oriented, like Community Health Centers (CHCs) or larger acute care facilities. As their states prepare for significant Medicaid program changes, these providers and others will need to continue to plan for a rise in uncompensated care and the stress on patients and staff alike that come from that. The impact of Medicaid cuts isn't likely to be felt equally across all communities, un-enrollment patterns often follow existing social and economic disparities. Rural areas and communities with limited healthcare infrastructure may face disproportionate effects, while certain demographic groups might experience higher rates of coverage loss.

The Rising Tide of Uncompensated Care

According to recent analyses, the healthcare system is bracing for a substantial increase in uncompensated care costs:

• The Urban Institute and Robert Wood Johnson Foundation forecast an increase of $18.9 billion in uncompensated care costs
• Additional RWJF analysis indicates a $19 billion surge following the elimination of enhanced Federal Medical Assistance Percentage (FMAP)

Community Health Centers (CHCs) and Federally Qualified Health Centers (FQHCs) will feel the full force of these cuts. These safety net providers are already preparing for greater strains on existing resources and staff, but how to prepare for some of the potentially unforseen impacts stemming from dramatic swings in coverage?

Many patients may not know they are uninsured

Following the unwinding, significant discrepancies were found between official Medicaid enrollment numbers and people's awareness of their coverage status. Findings from a recent study showed that many individuals who maintained their Medicaid coverage as a result of continuous eligibility were not aware:

• While CMS data showed a 5.2 percentage point increase in Medicaid coverage from 2019-2022, survey respondents during this time only reported a 1.3 percentage point increase
• Children showed the largest "awareness gap" - their actual enrollment grew much more than what families reported in surveys
• The gap was smaller in states that had recently expanded Medicaid, suggesting that people who actively enrolled were more aware of their coverage status
• Many people reported having multiple types of coverage simultaneously (like both Medicaid and private insurance), indicating potential confusion about their primary coverage source

These findings suggest that many people who maintained their Medicaid coverage during the pandemic weren't aware they were still covered, which could lead to challenges as states review eligibility and potentially terminate coverage. Its extremely likely we'll see similar impacts as eligibility requirements shift and patients begin to lose their coverage. Many people will seek care not knowing their benefits have been revoked or reduced, and will be faced - at the point of care - with very difficult decisions.

CHCs and FQHCs are very familiar with providing care for the uninsured, and in many cases for individuals who believe they are insured but do not actually carry coverage. This phenomenon is going to increase of course, and like many of our clients, these providers will continue to deliver services regardless as it is a core part of their mission.

Moving Forward: Essential Considerations

Healthcare providers, particularly safety net organizations however, need to build consensus across their organizations to face these coming challenges:

• Fixing any gaps in referral networks with community partners to ensure that no recoverable revenue now and into the future is lost, this could include looking into new billing solutions or integration opportunities between case management and electronic medical record systems.
• Seeking low-cost financing options for uninsured patients and looking for partners that could provide resources to ease the impact of medical debt.
• Training staff to handle increased emotional responses from patients discovering their lack of coverage.

As these changes unfold, it will be crucial for healthcare organizations to remain adaptable and focused on maintaining access to care while managing the financial implications of increased uncompensated care. Historically, safety net providers have had significant exposure to these types of issues but the magnitude of the coming changes are likely to be unprecedented.

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