California ER use jumps despite Medicaid expansion

California is the latest state to report that emergency room usage is up despite expanding Medicaid eligibility.

Emergency room visits by people on Medi-Cal, the state's Medicaid program, rose 75% over five years from 800,000 in the first quarter of 2012 to 1.4 million in the last quarter of 2016, according to California's Office of Statewide Health Planning and Development.

Similar findings have also been noted in studies on Illinois, Massachusetts and Oregon. The trend contradicts what policy experts thought would happen if people gained more insurance coverage. They could also give Republican lawmakers the ammunition they need to dramatically overhaul Medicaid, as they propose in the American Health Care Act that passed the U.S. House of Representatives.

From 2013 to 2016, enrollment in Medi-Cal grew by 57%; 5 million new members were added, bringing current enrollment to 13.5 million. Medi-Cal now covers more than one-third of all Californians, leading some to claim that it's the closest to universal coverage of any state.

California health officials couldn't explain the rise, but providers think they have an answer.

"There has not been an increase in physicians willing to see Medi-Cal patients, mostly because the payment rates are so low," said Jan Emerson-Shea a spokeswoman for the California Hospital Association. Therefore, newly enrolled Medi-Cal patients continue to seek care in hospital ERs because they cannot access primary care in physician offices and clinics.

California ranks 47th in the nation for payment rates for providers, according to the CMS.

Republicans have already used reports of increased ER usage in expansion states and rising spending in the program as reasons to convert Medicaid into a per capita cap system.

Medicaid spending jumped 4.3% to $575.9 billion in 2016 with the federal share growing 4.5% to $363.4 billion, according to the CMS.

"Despite these significant investments, one-third of doctors in America do not accept new Medicaid patients," HHS Secretary Tom Price told the Senate Appropriations Committee on Thursday. "We need structural reforms that equip states with the resources and flexibility they need to serve their unique Medicaid populations in a way that is as compassionate and as cost-effective as possible."

Price supports President Donald Trump's budget proposal that includes a $600 billion cut to Medicaid over the next decade.

The trend in rising ER visits could also support Republican's rationale for imposing co-pays on those services, according to Josh Archambault, senior fellow at the Foundation for Government Accountability, a conservative think tank. Wisconsin recently submitted a waiver for such a requirement.

"Hopefully these kinds of reports grant urgency to change Medicaid and the health system it operates in," Archambault said.

High ER use in expansion states also gives Republicans some political cover as they seek to roll back Medicaid expansion.

"The argument that expanding coverage would reduce ER use was always a bit of a canard used to sell the ACA," said Charles Blahous a senior research fellow for the Mercatus Center, a conservative research organization, adding that while the information would have been useful when crafting the ACA, the findings could still be useful to discount the notion that any decrease in Medicaid coverage would lead to more ER visits.

Dr. Larry Stock, president of the California chapter of the American College of Emergency Physicians, worries how Medicaid cuts and ER visit co-pays could affect patients.

"We don't want to scare people from coming into the emergency department if they need to," he said.

In California, provider groups have lobbied for new taxes that could increase reimbursement for providers and boost the number of residency slots in the state.

Insurers say in order to affect the number of ER visits, patients need to be better informed about their options in healthcare especially since many who enrolled under expansion had never before had coverage.

Mary Ellen Grant, a spokeswoman for the California Association of Health Plans, said plans will continue to work with providers to lower ER overuse.