The Affordable Care Act (“ACA”) was passed in 2010 by a Democratic President and a Congress controlled by Democrats. The overall goal of the ACA, also known as Obamacare, was to decrease the number of uninsured Americans. The ACA has been somewhat successful in that an estimated 22 million Americans have obtained coverage either through Exchange-based health insurance or Medicaid Expansion. However, there have been many critics of the ACA’s individual mandate, federally funded Medicaid expansion, and federally subsidized Exhange-based health insurance premiums. Today, Americans are sharply divided on how to proceed with the ACA.
Six years later, the ACA is now faced with a Republican President in Donald Trump and a Congress with both houses controlled by Republicans. These leadership changes certainly mean an aggressive and determined attempt to repeal (or drastically undermine) and replace the ACA. From early indications, these efforts will focus on eliminating the individual mandate to have minimum health insurance coverage, preserving employer-sponsored insurance coverage, returning control of Medicaid programs to the states, and eliminating or changing the structure of Medicaid Expansion. Therefore, the question must be asked: “what do these changes mean for MedData as a company that provides third party eligibility and enrollment services for hospitals, clinics and physicians?”
Today, MedData is a leading national provider of technology-enabled healthcare services designed to help physicians and hospitals better engage patients throughout the entire healthcare continuum. MedData currently employs more than 2,200 employees that provide services to 540 clients, more than 2,000 hospital sites and more than 10,000 physicians. MedData, across all lines of service, engages in 24 million patient encounters annually in all 50 states and Puerto Rico.
The MedData suite of solutions includes a range of patient access and communications, revenue cycle management, and consulting and analytics services, including billing, coding, patient pay collections, eligibility and enrollment, third party liability, and mobile-first engagement and communication software for patients and providers. MedData is committed to delivering these industry-leading and patient-focused revenue cycle management solutions to physicians, clinics, and hospitals across the country.
A significant portion of MedData’s revenue is generated by assisting patients who are uninsured with the application process to become enrolled in Medicaid and, to a much lesser extent, Exchange-based insurance plans. More than a thousand MedData employees are dedicated to interacting with patients across the country to determine if there is the potential for an Eligibility program that will pay for our client’s services – most often Medicaid – and then converting that potential into coverage. The conversion process is often complicated, time consuming and labor intensive. The scope of MedData’s Third Party Eligibility enrollment program makes the Trump Administration’s position on the ACA critical to our future planning.
While the future is uncertain regarding exactly what shape the healthcare landscape will take in the coming years, the following are some of the answers that seem clear today.
First, the repeal and replacement of the ACA means that hospitals, clinics and physicians will need MedData’s expertise more than ever. When the ACA was originally passed, many of our clients requested and relied heavily on our opinion of what the new law meant and how the new process would work. This interaction provided very high-level access to our clients’ decision-makers and helped establish and advance MedData as a valuable partner. We believe that the changes that could begin as early as January of 2017 will present the same opportunity. We, as an enterprise, need to remain: 1) highly educated on developments as they are happening and 2) prepared to assist our clients with both understanding and working within the new system that will be crafted by the Trump Administration and Congress.
Second, MedData has taken steps to be both nimble and flexible in our operating philosophy and processes to adjust quickly to changes in the ACA, particularly as they affect Medicaid expansion. It is anticipated that any “repeal and replace” plan will take place over at least a two or three year window to ensure an organized transition. Two or three years is not a very long time to completely reconstruct an ACA replacement system. Fortunately, due to a lot of hard work and vision, MedData is uniquely situated to meet this need. MedData’s acquisitions of Alegis, Cardon, and Duet over the last fifteen months has brought together an unprecedented level of expertise and experience across all lines of service including Third Party Eligibility, Third Party Liability, Billing and Appeals and Patient Pay. MedData’s technology – internal, client facing, and patient facing – is cutting edge. And, the integration of these recent acquisitions is coming to fulfillment in early 2017, a timeline that will position MedData to take on the coming changes and make the most of them.
Third, MedData has been and will continue focusing on the flow of reimbursement to clients in order to capture all revenue opportunities. MedData has traditionally charged a contingency fee to clients based on the actual reimbursement for a specific patient account. However, other payment mechanisms such as Disproportionate Share and Upper Payment Limits have been used to compensate hospitals for treating indigent and Medicaid eligible patients. As the states regain more control over the form of Medicaid expansion, MedData will ensure that if non-traditional payment mechanisms are used to reimburse healthcare providers, that our fee structure incorporates those mechanisms in order to fully compensate the enterprise for our efforts.
Fourth, even more than today, every opportunity for an Eligibility enrollment will be critical to both our clients and MedData. MedData is currently very efficient at identifying Eligibility opportunities and converting those opportunities into revenue. However, going forward, MedData is striving to improve the efficiency of both coverage identification and eligibility conversion efforts. Third Party Eligibility companies that cannot continue to improve by lowering costs, decreasing processing times, and adjusting to new Eligibility frameworks will likely not thrive with the coming changes. MedData is already in the process of updating its technology platform in anticipation of this need by adding functionality and controls that will allow the enterprise to do more in less time and with less cost. MedData is constantly in a mode of process improvement. This culture and philosophy will drive separation from our competitors in the coming years which should positively impact both existing client retention and new client acquisition.
Finally, MedData’s diversification of services will reduce the impact of any potential negative effects of the Trump Administration’s ACA changes. MedData provides a broad range of services to hospitals, clinics and physicians, including: coding, billing, account follow-up, appeals of denial accounts, third party liability recoveries (accident accounts) and patient pay collections. With the acquisition of Duet, MedData also has the ability to materially affect the patient’s healthcare experience. Changes in the ACA that reduce Eligibility opportunities: 1) will create opportunities in other service lines such as patient pay collections and third party liability recoveries because there would be more uninsured patients and 2) will have no effect on the patient interaction services provided by Duet. Very few of MedData’s competitors have such diversification and would feel any negative effects more strongly than our enterprise. This changing environment would also present opportunities to expand MedData’s client base at the expense of competitors who are not as well positioned for change.
As we say in healthcare, the only constant is change. Change is always a risk; however, change is also always an opportunity. There is the risk that Medicaid expansion and Exchange-based health insurance coverage will be negatively affected by the Trump Administration. However, MedData is well positioned to take on these changes and take advantage of the opportunities represented by the likely repeal and replacement of the ACA.