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Accounting firm: Hospital admissions are still falling

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Crowe Horwath LLP, an accounting firm that runs a hospital financial performance tracking database, has evidence that Patient Protection and Affordable Care Act (PPACA) programs might be cutting use of hospital care.

Some observers have noted that PPACA-related drops in the uninsured rate seem to have slowed in recent months, especially in states that refused to take PPACA Medicaid expansion money. When Crowe Horwath analysts looked at hospital performance in August, they found signs that insured patients were having trouble paying their share of the bills.

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But Crowe Horwath analysts say the Medicaid-expansion-state hospitals in its database reported fewer inpatient and outpatient admissions in September 2015 than they reported in September 2014, and that increases in average revenue per patient were modest.

In the Medicaid-expansion states, inpatient admissions decreased 1.4 percent and outpatient visits fell 2.8 percent. Average revenue per patient increased 2.7 percent for inpatients and just 1.1 percent for outpatients.

In the non-expansion states, outpatient visits fell 4.3 percent, but inpatient admissions increased 3.6 percent. Average revenue per patient was flat for inpatients and increased 4.1 percent for outpatients.

The analysts also looked at who paid hospital patients’ bills in the third quarter. The percentage of self-pay patients fell to 3.7 percent, from 4.3 percent, in the Medicaid expansion states. In the non-expansion states, the self-pay percentage fell to 8.9 percent, from 9 percent.

In the Medicaid expansion states, one challenge for nonprofit hospitals is proving that they’re still providing enough charity care to justify keeping their tax-exempt status, the analysts say.

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“Although there are no definitive community benefit thresholds required by the [Internal Revenue Service], a 5 percent threshold is often a baseline target for many hospital organizations,” the analysts say.

In Medicaid expansion states, the analysts say, nonprofit hospitals may be able to justify tax-exempt status by spending more on preventive care and wellness services.