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Hospitals see PPACA admissions boost

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Executives at three publicly traded hospital companies say they see clear signs that Patient Protection and Affordable Care Act (PPACA) is changing the mix of incoming patients.

The executives — at HCA Holdings Inc. (NYSE:HCA), Tenet Healthcare (NYSE:THC), and Community Health Systems Inc. (NYSE:CYH) — talked about the effects of PPACA recently during conference calls with securities analysts.

Two major PPACA coverage expansion programs were supposed to start helping consumers pay for health care Jan. 1.

One provides federal funding for states that expand Medicaid eligibility. Some states took the money and expanded Medicaid, and other states did not.

The other is the PPACA public health insurance exchange program. Consumers can use the exchanges to buy “qualified health plan” (QHP) coverage from private insurers. Many moderate-income QHP buyers can use federal premium tax credits to reduce their share of the premiums. Some QHP buyers can get help with paying deductibles and coinsurance amounts.

The Medicaid expansion program is having a dramatic effect on admissions, the hospital company executives said.

Tenet, for example, found that admissions of patients with Medicaid increased 17 percent in Medicaid expansion states from the levels recorded in early 2013 and fell 1 percent in states that declined to expand Medicaid, according to a Tenet investor presentation.

Admissions of uninsured patients and patients who would be depending on charity fell 33 percent in the Medicaid expansion states and increased 2 percent in the non-expansion states.

The effect of Medicaid expansion on outpatient patient mix was similar, and the effect on the emergency room patient mix was bigger, Tenet said.

At HCA, Medicaid admissions grew 22 percent in Medicaid expansion states and fell 1.3 percent in non-expansion states. Admissions of uninsured patients fell 29 percent in the Medicaid expansion states and increased 5.9 percent in the other states.

At Community Health, uninsured “self-pay” admissions in Medicaid expansion states accounted for just 5.3 percent of admissions, down from 7.1 percent in the first quarter of 2013, and Medicaid admissions increased to 23.3 percent, from 20.6 percent. In non-expansion states, the mix of self-pay and Medicaid admissions was about the same as it was a year earlier.

Community Health executives said they had a hard time getting enough information from health insurers about which patients had exchange QHP coverage — or exchange and non-exchange QHP coverage — to provide any statistics on patients with QHP coverage.

Tenet is starting to get some early data on QHP enrollees.

Tenet says that the number of patients with QHP coverage is still small, but that the number who came in with QHP coverage in April alone was about 80 percent of the number who in with QHP coverage during the first three months of the year.

About 30 percent of the QHP enrollees who used Tenet hospitals were uninsured in 2013, according to Daniel Cancelmi, the company’s chief financial officer.

Some QHP issuers have not had enough staff to process QHP enrollee claims, but they have told Tenet that they are adding enough staff members to handle the claims, according to Stephen Mooney, Tenet’s president.

HCA says it had at least 1,700 exchange QHP enrollee admissions in the first quarter. Those admissions accounted for just 0.4 percent of all admissions.

HCA took in about 250 patients with QHP coverage in January, 500 in February, and 1,000 in March.

HCA treated some of the QHP enrollees both in 2013 and in the first quarter of 2014. About one-third of the repeat-customer QHP enrollees were uninsured in 2013, according to William Rutherford, HCA’s chief financial officer.  

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