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Docs Earn More with ACA, if State Participates

The ACA’s Medicaid expansion results in better payments to hospitalists.

The Affordable Care Act is paying doctors more through Medicaid expansion. Payments to physicians for hospital stays increased by $3.38 (4.2%) per day. About half of the higher payments were due to better payer mix. This means that uninsured patients stayed for 66% fewer hospital days in 2014 than 2013; these patient-days were replaced with insured patients (mostly Medicaid). The other half of the physician payment boost came from all types of insurers paying more for services in 2014, which can be thought of as an adjustment for inflation.

Source: Kevin Schraer (Flickr/CC)

Source: Kevin Schraer (Flickr/CC)

was responsible for the improved payer mix. The percent of hospital days spent by the uninsured dropped by two-thirds, from 18% to just 5% after the ACA. Medicaid days increased by 73%, from 17% to 30%, while privately insured days actually dropped slightly (by 6%) despite access to private insurance through ACA marketplace plans. Colorado—where this data came from—expanded Medicaid, but based on their experience, doctors in states that chose not to expand Medicaid would not enjoy the same benefits.

In addition to being paid more, doctors’ jobs were likely easier after implementation of ACA. In 2013, the University of Colorado doctors spent almost 1 in 5 days caring for the uninsured. When these uninsured patients converted to Medicaid coverage, their discharge planning, a big and often difficult part of caring for hospitalized patients, got easier.

When someone without insurance is sick enough to stay in the hospital, it is more difficult to discharge them safely because they do not have money to pay for things Medicaid covers like rehabilitation, home visits, or even the medicines they need to keep them healthy and out of the hospital. Insurance coverage also makes it more likely that they can follow up with a primary care physician after their hospital stay, another aspect which might reduce hospital readmission.

One other factor contributed to the payment changes. Patients stayed in the hospital a little longer in 2014 – 6.23 days instead of 5.87 days on average. The longer hospital stays actually decreased average reimbursement per stay because doctors are paid more for the care on the first and last days of the admission and less for the days in between.

In the end, physicians seeing hospitalized patients earn more under the ACA, if their state has accepted Medicaid expansion.

commentary by Laura Medford-Davis


Although uncompensated care for hospital-based care has fallen dramatically since the implementation of the Affordable Care Act and Medicaid expansion, the changes in hospital physician reimbursement are not known. We evaluated if payer mix and physician reimbursement by encounter changed between 2013 and 2014 in an academic hospitalist practice in a Medicaid expansion state. This was a retrospective cohort study of all general medicine inpatient admissions to an academic hospitalist group in 2013 and 2014. The proportion of encounters by payer and reimbursement/inpatient encounter were compared in 2013 versus 2014. A sensitivity analysis determined the relative contribution of different factors to the change in reimbursement/encounter. Among 37 540 and 40 397 general medicine inpatient encounters in 2013 and 2014, respectively, Medicaid encounters increased (17.3% to 30.0%, P < .001), uninsured encounters decreased (18.4% to 6.3%, P < 0.001), and private payer encounters also decreased (14.1% to 13.3%, P = .001). The median reimbursement/encounter increased 4.2% from $79.98/encounter in 2013 to $83.36/encounter in 2014 (P < .001). In a sensitivity analysis, changes in length of stay, proportions in encounter type by payer, payer mix, and reimbursement for encounter type by payer accounted for -0.7%, 0.8%, 2.0%, and 2.3% of the reimbursement change, respectively. From 2013 to 2014, Medicaid encounters increased, and uninsured and private payer encounters decreased within our hospitalist practice. Reimbursement/encounter also increased, much of which could be attributed to a change in payer mix. Further analyses of physician reimbursement in Medicaid expansion and non-expansion states would further delineate reimbursement changes that are directly attributable to Medicaid expansion. PMID:  26310500

Jones, CD, et al. Inquiry. 2015 Aug 25; 52.

Laura Medford-Davis, MD
About Laura Medford-Davis, MD

Dr. Medford-Davis is an assistant professor at Baylor College of Medicine and works as a consultant for McKinsey&Company. She began writing for Policy Prescriptions® in 2013. Contact: Website | Facebook | Twitter | More Posts