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How hospitals are impacted by nearly 400,000 Arizonans disenrolled from AHCCCS

By Lauren Gilger
Published: Wednesday, November 29, 2023 - 11:12am
Updated: Wednesday, November 29, 2023 - 4:59pm

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Nearly 400,000 Arizonans have been dropped off the Medicaid rolls this year as the Arizona Health Care Cost Containment System — or AHCCCS — has been going through the process of cleaning up its rolls. 

Federal rules prevented states from removing recipients during the pandemic so it’s been three years since anyone has been disenrolled. 

For most of those who have been removed, it was due to procedural errors, and AHCCCS has projected the number could reach 600,000 by the end of the year. 

So, how are hospitals feeling the results?

For more on that, The Show spoke with Ann-Marie Alameddin, president and CEO of the Arizona Hospital and Healthcare Association. 

LAUREN GILGER: Good morning

ANN-MARIE ALAMEDDIN: Good morning.

GILGER: So I want to begin with a little bit about the view from the hospital world here. Like advocates are concerned that too many people are being taken off the rolls that people will not have health insurance who need it. And there's been concern that because of that hospitals might see a big jump in uncompensated care as it's called. So is that happening yet?

ALAMEDDIN: You know, I think hospitals anecdotally have seen an increase in uncompensated care of patients who are presenting to the emergency department without health insurance coverage, but we haven't really been tracking it statewide. I think we can take the numbers that you just provided in terms of 380,000 have are no longer eligible for access and they will be seeking care. Now, hopefully, those 380,000 people, a good number of them now have a different source of health care coverage perhaps through their insurance. But we have seen anecdotally an uptick in uncompensated care of patients without insurance coming to hospitals. 

GILGER: Right. And as this continues, as more people are disenrolled and maybe not reenrolled or whatever it is, they need to be not finding another form of insurance. Are you kind of bracing yourselves? Are hospitals worried about this?

ALAMEDDIN: I think hospitals are always worried about it because I think it's really important for patients to have health insurance so that they are really taking care of their health, that they're taking those preventative measures. They're getting their flu shots, their COVID vaccines, they're taking care of their you know, chronic conditions, getting care with their primary care department, with their primary care physician, not seeking, you know, emergency care in them department when it can be handled really in the community. So that's first and foremost, but hospitals are bracing for it because hospital financials are really in a difficult place right now. We really haven't recovered financially from the pandemic. In 2022, one of our surveys to our members, you know, all hospitals, the average were negative operating margins. So just incredibly challenged financially, you know, what are the drivers of that? I think we've seen you know, inflation which we are all experiencing, drug costs and the labor supply, just the labor costs have increased exponentially throughout the pandemic. So those are the are the drivers and we really don't have, you know, relief valves, you know, what can hospitals do? So as patients are presenting without health insurance with the disenrollment process, it's an issue for hospitals. We simply just don't have the reserves that may have been built up prior to the pandemic.

GILGER: Yeah. So explain this a little bit for us and how this works. Like how do hospitals handle uncompensated care? If someone comes into the emergency room, you know, and doesn't have health insurance? It's not like they're going to be turned away. But how do hospitals make up for that?

ALAMEDDIN: Absolutely. No, hospitals are open 24 hours a day, seven days a week to provide emergency care to patients. And so if you have an emergency condition, regardless of your health insurance status, come to a hospital to make sure you get the care that you need. But what hospitals do is, you know, first and foremost, they try to enroll if they determine eligibility for access to get them enrolled if they're eligible for AHCCCS or to get them with the Navigator to see if there's a health insurance on the marketplace that they can obtain. But oftentimes it's what hospitals call bad debt. Well, they will not be collecting on that. And so hospitals try to have reserves to really cover that. But you know, hospital care that is expensive and a part of that is to cover, you know, the care for patients who do not have health insurance, so that hospitals can continue to provide care to all patients, regardless of their ability to pay. It's just built into the system to try to cover that.

GILGER: So as we're looking at this Medicaid disenrollment, is this a specific concern for hospitals in rural areas? Because I know there are more concerns from advocates that people in those areas might not have the technology, they need to reenroll, they might not get the mail as soon as they need to and get continue their health insurance coverage in that way. Are rural hospitals in a tougher spot here?

ALAMEDDIN: You know, I think generally rural hospitals have very unique challenges in terms of workforce and recruitment, you know, their payer mix in terms of you know how much of their patient population has insurance. So rural hospitals have a number of challenges. You know, I think on this end, they're very similarly situated to all hospitals where you know, you want to make sure that patients are determined to have AHCCCS, have AHCCCS. And so I think hospitals have done a lot of outreach to their patient population to make sure that, you know, if you're a patient and you're on AHCCS and you get mail or a call from AHCCCS or the health plan to make sure that you're being responsive and that you're not disenrolled for some sort of lack of paperwork that you're able to maintain. I think AHCCCS nationally has done a really good job on this. I think I read a Kaiser report that we're like top 10 in the nation for really having a very well thought out redetermining process to make sure that they are keeping the eligible members enrolled, anyone who is not no longer eligible, that they're able to get insurance on the marketplace. They've done a really good job reaching out to hospitals, health care providers and community partners to really do that education. 

GILGER: So last minute or so here, Anne Marie, let's talk a little bit more broadly about the state of hospitals right now. You mentioned at the top that they're in a tough situation financially. What are your biggest priorities in terms of rebuilding then having those reserves that they once had?

ALAMEDDIN: I think one thing that we have been working on last legislative session and we hope it comes back this legislative session is health plan accountability. Health plans have had you know, record denials, denying claims, have increasingly erected barriers to care in terms of prior authorizations, physicians determining that a certain care is appropriate, and the health insurance plan sort of denying that care. And so health and accountability, timely payment is something that we are are actively pursuing in terms of legislation because it's only fair, you know, hospitals pay their bills on time and it's only fair to expect that health plans are paying their bills on time to hospitals, because we are taking care of patients in our community and they're in tremendous pressures on hospitals right now. And how health plans have a part of really ensuring that the health of that financial ecosystem is strong and resilient so we can continue to provide the care we need to.

GILGER: Yeah. All right, we'll have to leave it there. Ann-Marie Alameddin, president and CEO of the Arizona Hospital and Health Care Association, joining us. Anne Marie, thank you so much for coming in. I appreciate it.

ALAMEDDIN: Thank you for having me.

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