Unpaid bills, charity care down 50% at Michigan hospitals after Medicaid expansion

Many Michigan hospitals saw a major drop in uncompensated care after the state expanded Medicaid under the ACA, according to a new study out of the University of Michigan in Ann Arbor.

For the study, researchers examined state data on the influence of uncompensated care on premium rates, rate change filings and the net effect on rates overall in the year before and the two years following the expansion of Medicaid, via the Healthy Michigan Plan, in 2014.

The study found uncompensated care dropped by about half for the 88 hospitals that have reported a full year's worth of data from after Medicaid expansion, according to a news release. This finding represents 62 percent of all hospitals in Michigan.

Researchers said more than 90 percent of hospitals submitting data for both fiscal year 2013 and fiscal year 2015 saw a decline in the percent of their total expenses that came from uncompensated care between those years. In FY 2013, these hospitals spent about 5.2 percent of their total budget on writing off the cost of unpaid care, absorbing $627 million in total costs, according to the release. In FY 2015, it was down to 2.9 percent, and $327.1 million.

"The decline occurred across the board. Nearly every hospital in our sample saw a drop in uncompensated care between 2013 and 2015. We will continue to monitor this trend as more data become available," Study co-author Helen Levy, PhD, a research professor at the U-M Institute for Social Research, said in the release.

 

 

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