As Medicaid Expands, Hospitals See Declines In Charity Care, Self Pay

Some hospitals seeing declines in uncompensated care, but the future of Medicaid hospital financing remains volatile

June 5, 2014

As Medicaid enrollment grows to record levels, covering 65 million people nationwide, providers are starting to see some positive trends in their rates of uncompensated care.

Hospitals in states that have expanded Medicaid eligibility under the Affordable Care Act are already bringing in fewer self-pay and charity care patient cases, according to an analysis by the Colorado Hospital Association.

The association examined recent financial data from 465 hospitals in 30 states, half of them expanding Medicaid and half declining, and found hospitals in the states expanding Medcaid saw the program becoming a greater share of their revenue base, increasing on average from 15 percent of all revenue to almost 19 percent between 2013 and the first quarter of this year.

The average proportion of hospital charges for self-pay patients declined on average 25 percent in those same states, from 4.7 percent to 3.1 percent, the study found. Meanwhile, hospitals in states that are not expanding eligibility saw little variation in their share of Medicaid and self-pay patients.

Since Medicare’s average share of hospital revenue mostly held steady over the same time period, the increase in Medicaid “cannot be explained by an overall rise in total volume of patients attending hospitals or overall costs of care due to other structural changes in the healthcare sector,” wrote researchers at the Colorado Hospital Association.

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