Healthcare providers face three major threats to revenue. The pandemic-era Medicaid continuous enrollment provision has expired. The number of patients presenting as self-pay or on high-deductible health plans (HDHP) continues to grow. Compounding these challenges, Medicare physician payments have been cut for the fifth consecutive year, and there is potential for additional cuts later this year.
Medicaid-eligible, Coverage Expired. Proposed Medicaid cuts loom on the horizon, but the bigger threat to providers and facilities that serve low-income populations is already here: millions of Medicaid-eligible patients were not redetermined, fell off the radar, and lost coverage. Covered patients moved, and state administrators didn’t have updated addresses. This population does not seek healthcare regularly, so they did not know they needed to re-qualify for eligibility. Hospitals and providers do not turn away people who need care, so if a patient does not have coverage, providers simply do not get paid.
Self-pay, High-deductible, Functionally Uninsured. The Kaiser Family Foundation reported that 11.1% of adults aged 19 through 64 and 5.3% of children were uninsured in 2023.i Uninsured, self-pay, and HDHP patients take longer to pay — if they pay — and have a higher risk of write-off. High-deductible plans have created a new class of patients who are functionally uninsured; that is, if they receive a $10,000 bill and have a $10,000 deductible, they don’t have the resources to pay up front. Slow payment stalls the cash conversion cycle and contributes to already low profit margins that are plaguing most emergency providers.
Declining Physician Fee Payments. Effective January 2, 2025, the Medicare physician fee schedule (PFS) conversion factor was set to $32.35, a nearly 3% decrease from 2024. A provider who treats a Medicare patient in 2025 will receive less pay than they did last year for the same care. This does not account for inflation or the year-over-year increased cost of doing business. According to a study done by the AMA, when these factors are included, Medicare physician payment has declined 33% from 2001 to 2025.ii Medicare can drive other schedules, too. Many commercial payer contracts include provisions that are triggered when the PFS changes.
These threats to revenue magnify the importance of capturing every dollar available from all payer sources. Now is the time to shore up revenue cycle management (RCM) processes, employing smart strategies to support the billing team.
iTolbert, Jennifer; Cervantes, Sammy; Bell, Clea; Damico, Anthony. KFF website, 18 Dec 2024, Key Facts About the Uninsured Population, https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/. Accessed 12 Jun 2025.
iiHenry, Tanya Albert. AMA website, 21 April 2025. Medicare physician pay has plummeted since 2001. Find out why. https://www.ama-assn.org/practice-management/medicare-medicaid/medicare-physician-pay-has-plummeted-2001-find-out-why. Accessed 12 Jun 2025.