Medicaid Expansion After the ACA: Intensity of Treatment and Billing in Emergency Departments

Importance: Expanding health insurance coverage, in addition to increasing access to healthcare, affects medical provider revenue. While projections of medical expenditure include increased utilization attributable to improved access, they do not include changes in provider practice and billing misestimating the cost of insurance expansion. Objective: To evaluate changes to provider practice and billing following the Affordable Care Act (ACA) mandated Medicaid expansion in the emergency department (ED). We analyze total number of procedures and diagnoses on discharge records, then we focus on two diagnostic categories to examine use of specific tests. Design: We analyze 18,872,744 discharges in six states, four of which chose to expand Medicaid, and two which did not, using State Emergency Department Databases (SEDD) for 2013-2014. Using difference-in-differences analysis, we compared outcomes of interest adjusting for patient, visit, and zip code characteristics. Results: The number of procedures in expanding states increased by 0.27 per visit (95% CI, 0.09-0.45), while the number of diagnoses declined by 0.098 per visit (95% CI, -0.22 – 0.03) in 2014 compared to non-expanding states. Focusing on diagnoses of abdominal and pelvic symptoms, we find consistent evidence of decreased use of ultrasounds of abdomen and pelvis (-0.0076, 95% CI, -0.01- -0.002), and some evidence of decreased use of CTs of abdomen and pelvis (-0.0112, 95% CI, -0.01 - -0.001). For diagnoses of upper respiratory symptoms, we find evidence of substitution between tests: 3.2 percentage point decrease in use of ECGs (95% CI, -0.04 - -0.02), and a parallel 1.8 percentage point increase in use of chest x-rays (95% CI, 0.01-0.03). While these magnitudes appear small, the average CMS reimbursement for ECGs is $11.76 and for x-rays is $43.32, an almost four-fold increase in cost. Conclusion: We find that the Medicaid expansion led to between 2.7% to 4.0% increase in number of procedures per visit in the ED. This increase translates into 1,057,169 extra procedures performed in the four expanding states studied here in 2014, adding an estimated cost of $248 million to health expenditures in these states, of which $95.8 million was paid by Medicaid, a cost not captured by current policy projections.