Don’t Write Off Your Out-of-State Medicaid Claims

Medicaid provides healthcare and long-term services to more than 90 million low-income individuals, and it pays for one-fifth of all personal healthcare spending in the United States. Hospitals, community health centers, physicians, nursing homes, and community-based long-term services rely heavily on Medicaid reimbursements. And because of that, it’s important to get those claims paid.

Most Medicaid enrollees typically receive medical services within their state of residence. However, there are situations where patients seek care out of state. When this happens, the reimbursement is very difficult to chase down, and claims are often denied. Sometimes providers give up pursuing these complex claims. But they don’t have to be written off.

Knowing how to bill out-of-state Medicaid is critical to the bottom line. Increasing out-of-state Medicaid payments for hospitals requires thorough knowledge of the out-of-state Medicaid agency where you are filing the claim. 

Other Payment Policies That Influence Out-of-State Reimbursement

Additional factors that influence Medicaid reimbursement in significant ways include:

• States have flexibility in determining payment rates for services provided out of state.
• Many states pay out-of-state providers at lower rates than in-state providers.
• Out-of-state providers may need to undergo additional provider screening and enrollment, even if they are already enrolled in Medicare or Medicaid elsewhere.

Hospital Services and Out-of-State Medicaid Use

Hospital services account for the largest category of Medicaid spending. In fiscal year 2013, about 2% of Medicaid hospital stays occurred out of the patient’s state of residence, according to the Medicaid and CHIP Payment and Access Commission. About half of these out-of-state stays happened at hospitals in neighboring states within the same hospital-referral region (HRR) where the patient lived. HRRs are geographical designations describing regional healthcare markets for tertiary medical care.

There are also other factors to consider:

• Children eligible for Medicaid because of a disability are more likely to have out-of-state hospital stays.
• Children’s hospitals serve a higher share of patients from out of state compared with other types of hospitals.
• The use of out-of-state care may increase further as a result of the Advancing Care for Exceptional Kids Act (ACE Kids Act), which aims to facilitate out-of-state care for children with disabilities.

Medicaid Managed Care Organizations and Prior Authorization

More than two-thirds of all Medicaid patients get their care through a Medicaid managed care organization (MCO). These MCOs often require patients to obtain prior authorization before receiving care. If the MCO determines the requested service or prescription isn’t appropriate or medically necessary, it may fully or partially deny the request. 

About 1 in 5 Medicaid enrollees report facing difficulties with prior authorization — higher than for most other types of insurance, according to a July 2023 Kaiser Family Foundation survey.

What Does It Take to Submit a Clean Out-of-State Medicaid Claim?

Each state’s Medicaid plan operates by its own rules, deadlines, and policies. Without experts to help, many out-of-state claims don’t make it through, and most providers end up writing off these services. But it doesn’t have to be that way. With the right strategy and support, you can get all the money that’s due to you.

To submit a clean claim requires regular interaction with each state Medicaid agency, and timely knowledge of each program’s rules, regulations, processes, and policies. It also requires that:

• Provider numbers are updated and maintained with the states.
• The patient’s Medicaid eligibility is confirmed prior to billing.
• Prior authorization is obtained for medical services when needed.
• The claim can pass all Medicaid agency data checks before payment. 
• All requirements for payment meet each state’s deadlines.

Don’t Write Off Those Medicaid Claims: What it Takes to Get Paid

Your organization’s bottom line takes a major hit when you write off challenging Medicaid claims like those from out of state. That’s why it’s crucial to understand the common reasons for denial and how to prevent them. 

Here are some ways you can ensure you get paid:

• Ensure patient eligibility by checking for lapsed coverage or incorrect patient information, including typos in date of birth or ID numbers.
• Verify Medicaid coverage before treating the patient.
• Check for coding errors in Medicaid state-specific codes and be aware that state-specific modifiers (e.g., “U” modifiers) and telehealth modifiers (such as 95 or GT) can vary by state.
• Ensure familiarity with coding specifics for Medicaid plans in the state where you want to bill. 
• Meet submission deadlines, but if you can’t, and have a valid reason, submit an appeal.
• Make sure provider enrollment is up to date in the state where you are billing.

EnableComp operates as an extension of your business office. We have the expertise to get you paid, with years of experience in billing Medicaid in all 50 states. 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, following up to confirm proper processing, and managing all requirements and submission destinations. We have plug-and-play solutions with claims clearinghouses that support the electronic submission of bills and attachments, typically improving days-to-pay significantly. We are swift and tenacious in our follow-up on claims. Providers we serve typically see a 50% recovery increase on claims.