Out-of-state Medicaid billing is notoriously complex for hospital providers. Some providers even choose not to participate and 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 recent figures show that Medicaid covers more than 92 million individuals, making it the largest health insurance program in the United States.
Although most Medicaid enrollees obtain services within their state of residence, some seek care out of state under certain circumstances. Federal Medicaid regulations require states to provide out-of-state coverage in four situations:
- A medical emergency
- The beneficiary’s health would be endangered if required to travel to the home state
- Services or resources are more readily available in another state
- It is general practice for recipients in a particular locality to use medical resources in another state
The complexities of out-of-state Medicaid billing stem from multiple factors: eligibility and enrollment requirements, differing benefit coverage, unique application processes, and more. Before you can navigate these challenges, it’s important to understand the key exceptions and limitations that shape reimbursement.
Below are four of the most impactful, though not the only, exceptions related to out-of-state Medicaid billing.
1. Traveling outside the home state with Medicaid
If a Medicaid enrollee travels outside of their home state and needs medical care, Medicaid generally does not cover services rendered in another state. This is because a provider in one state is typically authorized to bill only that state’s Medicaid program.
Exception: Out-of-state Medicaid coverage may apply if the patient experiences a life-threatening emergency requiring immediate medical care and there isn’t time to return home for treatment. Even in emergencies, however, many states require the treating hospital to be enrolled or at least registered with the patient’s home-state Medicaid program.
Best practices:
- Document the emergency medical condition and ensure the treating provider certifies that a delay would endanger the patient’s health.
- Verify whether the home state requires out-of-state provider enrollment or prior notification for emergency cases.
- Build eligibility verification workflows to flag when the enrollee’s home state differs from the provider state.
2. Medicaid coverage for non-emergency treatment
Medicaid may sometimes cover non-emergency treatment provided out of state, but only when prior authorization or written approval has been obtained and the provider has met all enrollment requirements. This is handled on a case-by-case basis and requires coordination with the patient’s home-state Medicaid agency.
In many cases, a healthcare facility can enroll in another state’s Medicaid program to receive reimbursement for out-of-state patients. If the facility provides all necessary documentation and secures prior authorization, the care can be covered.
Best practices:
- Confirm enrollment and prior authorization rules directly with the home-state Medicaid office.
- Recognize that payment rates are determined by the patient’s home state, not the treating state.
- Create workflow triggers for out-of-state patients to ensure all authorization and enrollment steps are completed before billing.
3. Transferring Medicaid coverage between states
A patient cannot be covered by Medicaid in two states at the same time. To transfer coverage, the enrollee must terminate their current state’s Medicaid plan and apply for coverage in their new state after relocation.
Each state sets its own eligibility requirements, so being eligible in one state does not guarantee eligibility in another. Factors that determine Medicaid eligibility include:
- Income level
- Assets and resources (especially for those age 65+, disabled, or in long-term care)
- Medical expenses (for states with Medically Needy programs)
- Level of care for long-term services
While income thresholds are generally similar across states, adult Medicaid expansion under the Affordable Care Act (ACA) remains optional. As a result, some states have not adopted expansion, leaving coverage gaps for certain individuals.
Best practices:
- Verify whether an enrollee has transferred Medicaid coverage to the new state before billing.
- Understand that each state conducts its own eligibility determination process.
- Review whether the new state allows retroactive coverage to avoid gaps in reimbursement.
- Use financial counseling and registration teams to educate relocating patients early in the process.
4. Out-of-state coverage for border or adjacent areas
Medicaid coverage can sometimes apply to facilities just across state lines, particularly when the out-of-state facility is the patient’s regular provider or when in-state options are too far away.
For example, border hospitals in states like Vermont are often designated as in-network providers for neighboring states, whereas geographically isolated states like Hawaii exclude almost all out-of-state care except emergencies.
Best practices:
- Hospitals near state borders should maintain enrollment or reciprocal agreements with adjacent state Medicaid programs.
- Clearly document that the out-of-state facility is the enrollee’s usual provider or that it is standard practice in that locality to use cross-border medical services.
- Maintain a “border state Medicaid matrix” summarizing each neighboring state’s enrollment, rates, and prior authorization requirements.
Key takeaways and provider strategies
Successfully managing out-of-state Medicaid billing requires disciplined workflows, clear documentation, and familiarity with each state’s requirements. To receive payment for services, providers must often enroll in the patient’s home-state Medicaid program and comply with that state’s documentation and authorization rules. Payment rates are set by the home state and may differ from the treating state’s rates.
Provider best practices:
- Flag claims where the patient’s Medicaid home state differs from the treatment state.
- Keep a current reference guide for all 50 states’ out-of-state billing and enrollment policies.
- Verify enrollment and prior authorization requirements before providing non-emergency care.
- Train billing teams to recognize state-specific nuances and common pitfalls.
- Regularly monitor policy updates from state Medicaid agencies and CMS.
Partnering with an expert
Because Medicaid rules are state-specific and frequently change, many hospitals partner with specialists like EnableComp.
EnableComp acts as an extension of your business office, leveraging detailed knowledge of all 50 state Medicaid programs. Their team manages provider enrollment, prior authorization, and denial resolution to accelerate payment cycles and reduce revenue leakage.
Hospitals working with EnableComp often see an increase of more than 50% in out-of-state Medicaid reimbursements once these workflows are optimized. Contact us to learn more.
