How Medicaid Discounting Causes Hardships on Organizations

Consumer and Provider Costs
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Consumer and Provider Costs
Since the enactment of the Affordable Care Act (ACA) in March 2010, Americans have enjoyed improved healthcare coverage due to the financial and other healthcare advancements prompted by this reform. Its continued expansion has further induced various benefits, including reducing the number of uninsured (Offer, 2021). However, the author indicates that expansion has exposed challenges in the policy with the states that have embraced this recent reform providing more insurance for their beneficiaries, unlike those that have yet to expand Medicaid coverage. Thus, this variation in the implementation of the ACA reforms has far-reaching impacts on the financial health of organizations and consumer costs, requiring strategic changes to address the emerging deficits.
The challenges a health facility faces in a state that has not expanded Medicaid coverage are diverse and complex. As a healthcare administrator, detailing these issues is fundamental because they arise from accepting Medicaid as a payor. Such an approach is critical because it exposes the shortcomings and identifies improvement areas for the organization. As a result, this executive summary seeks to inform this board of directors about the dynamic cost-related hardships and the health delivery impacts presented by Medicaid discounting. Offer (2021) acknowledges that opting out of the Medicaid expansion left a significant proportion of the people this organization serves uninsured. This situation has presented conflicting issues while implementing the current discounting measures. It creates financial strains that adversely affect the organization’s stability, service delivery, and health outcomes. Such effects remain especially pronounced considering the nature of this facility. The board should recognize that this organization is a primary healthcare provision establishment that serves a vast population of people with low to medium income. Many of these individuals and households have no insurance coverage because they fall within the 15.5% of the uninsured groups in states without Medicaid expansion in 2019 (Offer, 2021). This facility has remained patient-centered, integrating progressive policy changes that improve care provision, including Medicaid discounts that promote affordability. Unfortunately, these efforts have triggered financial constraints for the organization because they are inconsistent with the reimbursement rates by Medicaid. As a result, the facility needs to re-strategize to maintain its financial health and continue serving the population appropriately.
Diverse Medicaid cuts implemented by states in recent years have triggered widespread impacts on the facility. For instance, Aron-Dine et al. (2020) reveal that these measures include provider payment reductions, planned coverage reversal, and furloughs. The authors report that these cuts reduce the rate of financial support disbursed in hospitals, yet the policy requires them to continue extending Medicaid discounts to the patients. Aron-Dine et al. (2020) further highlight states’ cutting of non-Medicaid ...