4 Important Concessions to Know When Billing Out-of-State Medicaid Hospital Claims

Posted May 24, 2023 by Kami Coots

Out-of-State Medicaid billing is notoriously complex for hospital providers. In fact, some providers choose not to participate and simply write off the debt because of the tedious nature of the work and the unique requirements of each state.

The number of people on Medicaid varies by month and year, but the latest enrollment figures show that Medicaid covers more than 92 million individuals, making it the largest health insurance program in America. Due to the continuous enrollment rules associated with the pandemic, this has increased by about 20 million people. However, this rule expired in Q2 of 2023 so there will be a large drop in membership as states mass disenroll impacted individuals.   

Although most Medicaid enrollees obtain medical services within their state of residence, some enrollees seek care out-of-state care under certain circumstances. Current Medicaid regulations describe four situations in which states must provide out-of-state coverage:

  • A medical emergency
  • The beneficiary’s health would be endangered if required to travel to the state of residence
  • Services or resources are more readily available in another state; or
  • It is general practice for recipients in a particular locality to use medical resources in another state

The complexities for billing Out-of-State Medicaid are due to many factors such as eligibility and enrollment requirements, unique benefit coverage for each state, different application processes for each state, and much more. However, before you can understand how to overcome these complexities, you must first identify the exceptions associated with billing Out-of-State Medicaid claims.

Here are the four most impactful, but not the only, exceptions/limitations related to Out-of-State Medicaid billing:

  • Traveling to a different state with Medicaid – If traveling outside of the insured’s home state and medical care is needed, Medicaid generally doesn’t cover the cost of services rendered in a state other than the insured or patient’s home state. One major reason for this limitation is the way providers bill Medicaid. As a rule, a medical provider in one state will only be authorized to bill that state’s Medicaid. Thus, an outpatient clinic visited in Florida most likely will not be able to collect payment from Medicaid in New York.
    • There is one major exception to this rule: Out-of-State Medicaid coverage may be used if the patient or insured has a life-threatening emergency. This must be an emergency that requires immediate medical care, and there isn’t time for the patient to return home to receive care from their regular provider. Such instances may still require the treating hospital to enroll with the state Medicaid plan providing coverage to the patient.
  • Medicaid coverage for non-emergency treatment – Medicaid sometimes covers non-emergency treatment from an out of state facility. The exception here is that this can only occur when proper authorization is obtained beforehand, and all provider enrollment requirements have been met. This works on a case-by-case basis so check with your Medicaid representative to see if your situation qualifies. In most cases, the treating hospital can also provide guidance in these situations.
    • It is possible for healthcare facilities in other states to enroll in the home state Medicaid plan that covers the patient. If the facility elects to provide all required documentation and pursue enrollment, then out-of-state medical care could possibly be covered if all other requirements, such as prior authorization, are met.
  • Transferring Medicaid coverage to a different state – One thing you should know about Medicaid is that a patient cannot receive coverage in two states at the same time. Therefore, to transfer your coverage, you’ll need to first terminate your original Medicaid coverage and then apply in your new state once you’ve relocated.
    • The challenge of applying for Medicaid in a new state is that each state has its own requirements for eligibility, so just because you’re entitled to coverage in one state doesn’t mean it’s guaranteed in another. Medicaid eligibility hinges on several factors:
      • Income level
      • Assets/resources (if the applicant is 65 or older, or enrolling in Medicaid due to disability, blindness, or receiving HCBS or long-term care services)
      • Medical expenses (in states that have Medically Needy Medicaid programs)
      • Level of care requirements for long-term care
    • The thresholds for income level and asset level eligibility are fairly similar across states, with the significant exception of adult Medicaid expansion under the ACA. The ACA called for all states to expand Medicaid eligibility to adults (age 19-64) with household income up to 138% (133% plus a 5% income disregard) of the poverty level. But the Supreme Court later ruled that this would be optional, and there are still 12 states that have not expanded their Medicaid eligibility rules as of last year including Texas, South Dakota, Wyoming, Kansas, Wisconsin, Mississippi, Tennessee, Alabama, Georgia, Florida, North Carolina and South Carolina. South Dakota will expand Medicaid in July 2023 and North Carolina by early 2024.
  • Out-of-State Medicaid coverage for certain geographical locations – Medicaid coverage might be available if the patient receives medical care at a facility located just across the border from the state in which they are currently enrolled. This will most likely be approved when the out of state location is the patient’s regular care provider, and in-state facilities are inconveniently far from the patient’s home address.
    • Use of out-of-state hospitals varies widely by state, but the most significant limitation for the availability of medical care outside of the patient’s home state is based on the extent to which residents live near other states. Hawaii, for example, does not border any states so it excludes coverage for non-emergency care across their border or in other states. Vermont, on the other hand, reduces barriers to out-of-state care by designating certain border hospitals as Vermont Medicaid providers and paying these hospitals the same rates as in-state hospitals.
    • Always check with your local Medicaid office to make sure it covers such treatment out of state before seeking non-emergency care across the border or in other states. Otherwise, responsibility for medical bills may fall on the patient.

Successful execution and measurable results from Out-of-State Medicaid billing hinge on challenges surrounding state registration/enrollment and ever-changing regulatory nuances. To receive payments for a state’s Medicaid services, a provider must enroll in the patient’s respective “home” state program and provide an often-extensive amount of proprietary and/or confidential data. Further, each state sets its own payment rates for out-of-state providers. Providers can get ahead of the process by working with a trusted partner like EnableComp to break through roadblocks and stay well-informed of continuous state-by-state changes.

EnableComp operates as an extension of your business office by bringing our detailed and extensive knowledge of the regulations and requirements of 50 different state Medicaid programs. We handle this work for over 140 hospitals, so we understand the challenges providers face when attempting to obtain reimbursement for Out-of-State Medicaid claims. We can address your Medicaid prior authorization needs by submitting the necessary payer forms, follow up to confirm proper processing, and manage all requirements and submission destinations.

If you need help reducing authorization denials and increasing your Medicaid payment cycle, EnableComp is your solution. Our clients often see an increase of over 50% in Out-of-State Medicaid payments once we take on the work.