Updating Financial Assistance Policies Amid Potential Medicaid Changes: Laxmi Patel

As coverage losses mount under proposed Medicaid reforms, hospitals face growing risks of uncompensated care and bad debt. Laxmi Patel, chief strategy officer at Savista, explains that patients who previously qualified for Medicaid but lose eligibility are likely to become self-pay patients, often without the means to handle larger medical bills.

In this interview, Patel recommends that providers adapt by updating financial assistance policies, expanding patient financing options, and emphasizing price transparency to better inform patients of costs. She also notes these steps will be critical to offset higher denial rates and uncollectible balances.

Check out the last part of this interview, where Patel explains how Medicaid work requirements and more frequent eligibility redeterminations may reduce the covered patient base, increase uncompensated care, and add costly administrative and technology demands—all of which are set to especially impact rural, low-income hospitals.

This transcript has been lightly edited; captions were auto-generated.

Transcript

How might hospitals adapt their revenue cycle processes to manage potential increases in self-pay cases and mitigate the risk of bad debt?

Coverage losses will increase uncompensated care and bad debt, because when you have loss of coverage, these become self-pay patients, and these are going to be, in most cases, low-income population who previously qualified for Medicaid but now are not going to have the ability to make the payments, especially for a larger medical debt.

Providers should really start to think about updating their financial assistance policies, maybe rebuild their presumptive eligibility tools, or scale kind of that patient financing program. Because with bad debt in collection, we're probably going to see some higher denial rates, uncollectible balance, going to need stronger financial counseling. Really, price transparency in the application will become a bigger role in educating patients what their self-pay amount is going to be, because it's no longer about deductibles and coinsurance. It's really about what self-pay discount, charity options, financial assistance programs they may have. And then really thinking about that correlation of bad debt increases and different ways to offset that from a system strategy standpoint.