Report: Montana Medicaid reduced ER visits, charity care, leaned into telehealth

A groundbreaking study released Thursday showed that many of Montana’s greatest hopes about how Medicaid expansion could benefit the state have turned out to be true, and in some cases, better than expected.

The report, commissioned by the Montana Healthcare Foundation, conducted by Manatt Health, demonstrated that reliance on emergency room for medical care fell significantly, hospitals and healthcare systems saw the amount of uncompensated charity care drop, and the state spent less of its funds than neighboring or comparable states on healthcare.

“Improving health is a complicated, costly task, but the findings are really significant,” said Dr. Aaron Wernham, the CEO of the Montana Healthcare Foundation.

Among the most notable finding was that after a year of being covered by the Medicaid expansion, ER visits fell by 14 percent. That’s important because one of the key selling points to lawmakers and the public has been to decrease trips to the emergency room, where it’s often more costly and resource-intensive to treat patients. The theory went that by expanding Medicaid and health insurance in general that patients would go to healthcare providers before illness or chronic conditions developed into a crisis or emergency medical situation.

Wernham told the Daily Montana that the study is one of the first of its kind to actual provide hard data to suggest that’s the case. The report, “Medicaid in Montana,” is the organization’s second annual report on the topic.

However, Wernham said it’s important for his organization to track the impact of the expansion so that both leaders and citizens know how the costly, complex program may be working or what other solutions may be needed.

No longer an emergency

More than 278,000 Montanans are insured by Medicaid. And the data collected through the Foundation, Manatt and the Department of Health and Human Services shows that “enrollee use of the emergency department decline each year they were enrolled.”

“These results offer a powerful validation of the Legislature’s core reasons for expanding Medicaid,” Wernham said. “They didn’t want people going to the emergency room when there was another department.”

Largely, the trend lines proves that Medicaid expansion enrollees are going to other departments as the number of trips to the emergency room falls. The report shows a continued trend line of fewer visits the longer a patient has access to other services.

Montana pioneering telehealth

Wernham credited Montana leaders for pioneering and leading the charge to embrace telehealth and telemedicine, especially during the COVID-19 pandemic. He said that by writing into law the reimbursement for telehealth, lawmakers gave the added nudge to healthcare providers who were contemplating adding it.

“We’ve talked a lot about this as a solution for a long time, but because of the pandemic, providers jumped into it and people used it,” Wernham said.

Telehealth’s success, as captured by the report, produced numbers that are almost hard to fathom. Behavioral telehealth visits since 2019 have risen by 2,817 percent.

“In 2021, the Montana Legislature passed and the governor signs a bill to make these temporary telehealth measures permanent, institutionalizing new access to service for rural Montanans,” the report said.

Montana Gov. Greg Gianforte, the former tech industry developer, praised the decision.

“Telehealth services are transforming how care is delivered in Montana, particularly in our frontier and rural communities,” Gianforte said.

Montana spends less than most other states

The percentage of Montana’s overall state general fund spending on healthcare dropped and was significantly lower than that of neighboring states. Notable is that other states like Wyoming and South Dakota, which haven’t accepted Medicaid expansion, are spending far more state money on healthcare than Montana.

Montana only spends 12 percent of its state general fund.

By comparison, the U.S. spends 18 percent on average, while South Dakota spends 20 percent and Wyoming doles out 17 percent percent.

“Montana had the ninth lowest rate of state general fund spending on Medicaid,” the report said.

In its comparisons, only Oregon had less at 9 percent.

When Medicaid expansion was passed in Montana, some lawmakers worried that by offering the program for free, or greatly reduced, would simply encourage residents to use the program excessively or provide an incentive for staying on it.

However, statistics collected by the foundation show that as of July 2021, enrollees were contributing more than $430,000 per month toward premiums, and most stayed on the program for less than 24 months.

“(The) coverage was often not available to them through their employers,” the report said. “Half of the state’s Medicaid expansion population (able-bodied adults) was enrolled for less than two years between 2016 and 2020.”

Medicaid expansion enrollees contribute premium payments equal to 2 percent of their household incomes, and those payments continue to increase, the report found.

Substance abuse programming

Wernham said another key finding was that since the expansion, the number of substance abuse programs has more than doubled, and funding has increased even more.

He said that providers are more likely to invest in programming because there’s a stable funding stream. That change has meant more programming, and more opportunities in rural parts of the state.

“Federal and state Medicaid funds available to support substance use disorder prevention and treatment have quadrupled since Montana’s Medicaid Expansion,” the report said.

The report found that many of the programs helped to establish a stronger framework of community-based care.

“This was a lifeline for patients as a whole,” Wernham said.

Detecting serious conditions

Finally, Medicaid expansion also played a key role in detecting serious health conditions, like breast cancer and colon cancer, earlier because of pre-screening.

Even though pre-screening decreased in 2021, likely due to concerns about COVID in healthcare settings, in 2020, the screenings covered by Medicaid found 65 cases of breast cancer and 770 potentially averted cases of colon cancer.

From uncompensated to compensated

In its first year, hospitals throughout the state had reported a drop in the uncompensated charity care. Because of federal law, hospitals may not turn away certain patients in need of care. Yet, because of the lack of insurance, many hospitals and healthcare centers were forced to write off the care as “uncompensated charity care.” This created a financial crisis for many smaller, rural healthcare centers, which could not make up the difference.

However, almost as soon as Medicaid expanded, the amount of uncompensated charity care started dropping, being replaced by Medicaid reimbursement rates. While many providers and healthcare systems remain concerned about the amount of reimbursements covering the cost of providing healthcare, the problem has greatly improved, Wernham said.

The state is also in the middle of a reimbursement rate study that will examine the role rates are playing in the healthcare field.

“Hopefully, this will help the state figure out if rates are adequate to recruit providers and retain them in state,” Wernham said.

In 2015, Montana’s uncompensated healthcare costs approached $400 million. By 2020, that number had dropped to $180 million.

In that time, not one rural hospital in Montana has closed, Wernham noted, while many other rural hospitals in other states have closed.

That’s even more critical in rural Montana, where not only hospitals but towns can be miles and miles away.

Uncompensated charity care dropped from $64 million among Montana’s rural hospitals in 2016 to $35 million in 2020, a decrease of more than 40 percent.