Discontinuity of Medicaid Coverage: Impact on Cost and Utilization among Adult Medicaid Beneficiaries with Major Depression

Tuesday, June 14, 2016: 10:15 AM
F55 (Huntsman Hall)

Author(s): Xu Ji; Adam S. Wilk; Benjamin Druss; Janet R. Cummings

Discussant: Sean Orzol


Major depression is a highly prevalent and costly condition among Medicaid beneficiaries. A disruption in Medicaid coverage can result in a discontinuity of routine care and potentially exacerbate outcomes, leading to subsequent use of acute services. However, little is known about the impact of discontinuous Medicaid coverage on acute care use in this vulnerable population. Furthermore, recent studies examining the effects of Medicaid coverage disruptions on acute care utilization have been unable to address the endogeneity of this relationship due to reverse causality. More specifically, the use of hospital services can reduce the duration of coverage disruptions due to hospital staff efforts to enroll eligible patients in Medicaid to increase payments. Failing to address this endogeneity may bias the estimates of this relationship towards the null hypothesis. This study contributes to the literature by identifying the causal effect of discontinuous Medicaid coverage on acute care use among adults with major depression, addressing the endogeneity of this relationship with an instrumental variable (IV) approach.


We derived a sample of adults with a diagnosis of major depression who were not enrolled in managed care, using the 2003-04 national Medicaid Analytic eXtract Files. Adults eligible for Medicaid due to disability for the duration of the study period were excluded. The following health care use outcomes were measured after the index diagnosis of major depression: (1) number of emergency department (ED) visits; (2) number of inpatient days; and (3) Medicaid-reimbursed costs (including all-cause costs and acute care [ED or inpatient services] costs) per person per Medicaid-covered month.  A disruption in coverage was defined as an enrollment gap of more than one month. In our two-stage least squares IV analysis, we used a state-level indicator for whether the state required Medicaid recertification annually (“streamlined” re-enrollment, versus recertification every six months or more frequently) to instrument for endogenous coverage disruptions.  The Medicaid re-enrollment policy satisfies requirements for a valid IV; the streamlined re-enrollment policy is strongly related to a reduction in coverage disruption and is otherwise unrelated to health care use.  


Of the 139,164 Medicaid beneficiaries in our sample, 29.4% experienced disruptions in coverage. The IV analysis suggests that compared to those with continuous coverage, those with a disruption in coverage incurred an increase of $567 (p<0.001) in acute care costs per person per month, evidenced by an increase in ED use (0.1 more ED visits per person month, p<0.001) and inpatient days (0.5 more inpatient days per person month, p<0.001). The increase in acute costs contributed to an overall increase in total all-cause costs by $314 (p<0.001) per person month. The magnitude of these estimates were 2-3 times smaller when the IV methods were not applied.


Among adults with major depression, those experiencing disruptions in coverage have, on average, significantly greater use of costly ED and inpatient services compared to those with continuous coverage.  Our findings suggest that maintenance of continuous Medicaid coverage is crucial for those with major depression to prevent acute episodes that require care delivered in high cost hospital settings.