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Medicaid Eligibility Vendors: 3 Reasons Why You Need Them

Medicaid Eligibility Vendors: 3 Reasons Why You Need Them

If you’ve been in the healthcare business as long as I have, you see generally accepted conventions or practices come and go or morph as necessity dictates. The healthcare revenue cycle without exception presents some of the best examples of practices that have come and gone…and have returned again simply in a different flavor (think capitation, HMOs and managed care).

In a program delivered October 10, 2001, HFMA identified ten self-pay activities consistently practiced by better performing hospitals. Among these, the utilization and outsourcing of Medicaid and alternative state funding application processes. For years, Medicaid eligibility vendors like The Midland Group were charged with the heavy lifting that was–and still is–the Medicaid eligibility process for uninsured patients. While uninsured patients needing Medicaid application assistance is still a small percentage of the total patient population, the 80-20 rule generally prevails on several levels:

  • 80 percent of the uninsured patients would not be able to start and/or complete a Medicaid application on their own;
  • 80 percent (or more) of a hospital’s revenue cycle staff time is spent on 20 percent (or less) of insured accounts–difficult accounts with big dollars attached, leaving little time to help uninsured patients with their Medicaid application;
  • Considering all admission types (inpatient, outpatient and emergency), there is an 80 percent chance that an uninsured patient will need follow up care and perhaps readmit for the same diagnosis.

Over the last few years, some hospitals have attempted to take the eligibility process in house. The results, although anecdotal, have not been inspiring, causing some hospitals to re-hire the very vendors they let go when they thought they could do it themselves.

So, here are my three reasons why Medicaid eligibility vendors are still essential for hospitals:


Well-established Medicaid eligibility vendors are connected to a variety of outside resources needed to get the job done. An example would be the staff at the rescue mission who knows that a certain discharged patient sleeps under a certain bridge at night and occasionally comes in to the rescue mission when the weather is bad. Can’t find that patient with the $140,000 bill? Medicaid eligibility vendors use private investigators to find patients who are needed to sign an application. They do not come cheap. Then there are the case workers who approve the applications. Does a particular patient’s case need special attention due to a need for expedited discharge planning? Medicaid eligibility vendors have established relationships with case workers and are well-versed on the bureaucratic procedures within the agencies.


Can hospital staff locate and screen patients, process the necessary applications with all required documentation (oh, and pay for that documentation when necessary) and follow up with the Medicaid case worker after the application has been submitted? What about appeals? It is not uncommon for Medicaid case workers to make inaccurate denials on pending applications. Does hospital personnel have the knowledge and persistence to challenge the decision–or does the account get written off?

Can they do all this–and much more–consistently, 7 days a week, 365 days a year?


The typical public benefits eligibility specialist can manage about 100 to 120 cases at a time. However, that is not without the technological tools needed to maximize call tracking, manage and notate cases, prioritize tasks, as well as create and document written communication with patients, physicians or case workers involved with the eligibility process. To reach a large volume of patients in a timely manner following discharge, a progressive VoIP telephone communication system is essential. On top of it all, databases, communication and call centers have to be managed by people who are experienced with the nuances of healthcare and all the rules that come with it, i.e. HIPAA.

These tools do not come cheap. A public benefits eligibility vendor with many hospital customers can utilize economies of scale and absorb the cost of these technologies into their overhead. Managing the tens of thousands of patients from multiple hospitals is less expensive on a per-patient basis compared to a few hundred from one hospital.

On the surface, it is understandable why hospitals would desire to take control of eligibility cases. It is not always obvious to hospitals the amount of work, expertise, support staff time and overhead that goes into the process.

And, let’s face it, not all eligibility vendors are good…just like not all doctors are good. But, that doesn’t mean you don’t find and use good doctors when you need them.


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