With Medicaid cuts, a Louisiana hospital system braces for big impact

Millions of Americans are projected to lose coverage due to Medicaid cuts in the coming years, and Louisiana is one of the states that is expected to be among the most heavily affected.

Louisiana expanded its Medicaid in 2016, enabling hundreds of thousands of residents to get coverage. But the tax package approved by President Trump and Congress in July changes how Medicaid programs are financed. As many as 10 million Americans are expected to lose coverage, according to the Congressional Budget Office.

States will have to weigh questions of reducing the number of people covered by Medicaid, or taking the unpopular approach of raising taxes. Louisiana is expected to be among the states most impacted by the cuts, according to a KFF analysis.

LCMC Health, based in New Orleans, is working to prepare for an increase in the number of patients who won’t be able to pay for their care. About a quarter of the system’s patients rely on Medicaid, says Anthony Cunningham, LCMC Health’s chief revenue officer.

Cunningham tells Chief Healthcare Executive® that the system expects a good number of its Medicaid patients to lose coverage, based on initial estimates.

“For me, what keeps me up a little bit at night is that, if we don't drastically change how we do business, that we potentially could be adding a tremendous amount of uncompensated care to our book of business,” Cunningham says. “So basically, providing services for patients without receiving any reimbursement to cover those expenses.”

LCMC Health operates eight hospitals in and around New Orleans. Cunningham says the system has to think of ways to grow revenue and minimize the number of bills that are uncollectible.

He also says the system is going to have to utilize technology to do more with less and find different ways to engage patients.

Rethinking financial counseling

As LCMC Health faces more people without Medicaid coverage, Cunningham says the system is going to have to do more work with patients ahead of time to get a sense of their financial needs.

“I'm going to really have to rethink how I do the whole financial counseling process,” Cunningham says.

Today, the financial counseling of patients is relatively straightforward, he says. The health system assesses the income and household of patients to see if they qualify for Medicaid, or perhaps a plan on the Affordable Care Act marketplace.

Cunningham expects that LCMC will need to do more.

“Moving forward, we're going to have to start really getting a little deeper with our patients, and really starting to think through, what are all those social determinants of health that you're dealing with, and what's your best kind of solution,” he says.

Patients who are struggling financially can be reluctant to discuss the extent of their difficulties. Financial counselors may have new challenges.

“The skill of that financial counselor is really going to have to grow, in my opinion, and be close, probably to a social worker,” Cunningham says. “How you talk to people about sensitive information like that is really important.”

“Having those conversations is going to be completely different in the new world,” he adds.

Part of that work may also involve helping patients get a better sense of different types of assistance that may be available to them, including food assistance. Many patients may not be aware of programs that could help them.

Cunningham wants to reduce barriers to care for patients with modest incomes.

As he says, “How do we do a better job of helping our patients to kind of navigate the system?”

‘Patient stickiness’

LCMC is looking at technology solutions that can help engage patients and give the system a better sense of what patients may need.

The health system utilizes Cedar, a healthcare technology firm that provides patient engagement and digital payment solutions to help boost payments.

“We’ve got to make sure we're continuing to collect dollars when we can,” Cunningham says.

Florian Otto, MD, co-founder and CEO of Cedar, says some patients with lower incomes find the billing of a hospital system confounding. Otto tells Chief Healthcare Executive® that many patients with lower incomes are reluctant to acknowledge that they need help.

“A lot of patients from underserved populations, they're actually ashamed of asking for something because they don't have the money,” Otto says. “The interesting piece is, rich people ask for discounts all the time. They're not ashamed, but sometimes people are ashamed, so offering them something that works for them, reducing the friction, personalizing is the way to go.”

Health systems can save headaches by engaging patients directly, assessing their needs and helping connect them with assistance early in the process, rather than working to collect bills that are past due.

“Usually, patients, if they understand the bill, they have the means to pay, and you make it easy for them, they also pay,” Otto says.

As more patients may be without coverage, LCMC Health is looking at ways to enhance what Cunningham calls “patient stickiness.”

The health system is going to have to work harder to help patients through the process of paying for care, and getting help where they need it, including government programs, prescription assistance and other forms of aid.

“How do you build trust with that patient when you're asking a lot of sensitive questions to them today? So it's going to drastically change, from a revenue standard perspective, how we deal with that entire front end process when that patient walks through the door,” Cunningham says.

If LCMC Health and other providers can make those connections with patients, they can find ways to maximize revenue and also do a better job of getting patients what they need, in terms of patient care and financial assistance, Cunningham says.

“What I see this whole role of financial counseling or financial navigation in the future is that these folks have to help people understand what are their needs by leveraging the social determinants of care,” Cunningham says.

“Do you have access to food regularly? Do you have transportation regularly so you can get these appointments? Do you have funding for your basic needs? …. All those things are going to be what will develop the trust between providers and patients that's going to get that patient stickiness that I'm talking about as it relates to this kind of new world,” he adds.