Health Policy$ense

Reducing ED Use in Medicaid Patients

Provide More Robust Access to Primary Care

In a new NEJM Perspective, LDI Fellow Ari Friedman, Brendan Saloner, and Renee Hsia analyze different policies to reduce emergency department (ED) use in Medicaid patients. They advocate strongly for providing Medicaid patients with better alternatives to the ED, rather than discouraging nonemergency ED use by imposing steep copayments.

The latter approach is a feature of Indiana’s Medicaid expansion waiver that involves charging patients $8 for their first ED visit and $25 for subsequent ED visits in the same year, when the visit is considered to be for “non-emergency” care. This is not a new strategy; states have had the option of imposing copayments (usually limited to $8) since 2005. A recent study found that the policy did not change ED or outpatient medical provider use in the eight states that implemented ED copayments. However, another analysis found that copayments were associated with reductions in nonurgent care, determined by  triage codes.

But the authors argue that there is a much better way to reduce ED use in Medicaid patients: provide them with better access to a primary care provider. Medicaid patients, as others, go to the ED for many reasons. Some are taken by ambulance or told to go by their primary care provider; some go because they believe their condition is too serious for other settings; others go because they have no other source of regular care, or their provider’s office is closed.

Give patients better alternatives than the ED, and they will use them, Friedman and colleagues argue. They point to key components of the patient-centered medical home (PCMH) model, including care coordination, case management, extended hours, and walk-in visits. Preliminary studies show that the models can be effective in reducing ED use, although a study of PCMH certification in Louisiana found no such effects in Medicaid patients. The ACA includes an optional program that gives states additional funding to support providers that develop “health homes” for Medicaid beneficiaries with multiple chronic physical conditions or severe mental illness. As of May 2015, 19 states have a total of 26 approved Medicaid health home models. The Urban Institute is conducting a long-term evaluation of this option.

The authors conclude:

Burdening patients with a bill if the cause of their visit is retroactively deemed not to have been an emergency will probably prove neither equitable nor effective in directing patients to alternative settings and could lead to unintended consequences if patients avoid care out of fear of economic hardship. Given these ramifications and the ineffectiveness of past attempts to impose costs on Medicaid patients seeking ED care, the Obama administration’s decision to approve demonstration projects involving high cost sharing and loss of transportation coverage is troubling. Instead, CMS might encourage state initiatives to develop robust ED alternatives. Although this approach requires more substantial changes to the health care system, it may be one of the most meaningful and sustained ways to improve the care of all medically or financially vulnerable Americans, especially Medicaid beneficiaries.