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Medicaid Discounting and its Impact on a Border Health Care Organization

Medicaid Discounting and its Impact on a Border Health Care Organization

I’m presenting this executive summary on behalf of a healthcare organization in a bordering city of Texas to discuss the effects Medicaid discounting has on the populations we serve as well as the financial hardships it causes. Our community health center offers comprehensive medical services, including maternity care, radiology, medical-surgical care, and intensive care, to a wide range of patients, focusing on helping Medicaid beneficiaries. Due to the geographical location, approximately 80% of our patients are Medicaid beneficiaries. Our organization is currently facing significant financial difficulties as a result of recent Medicaid policies and discounting.

Medicaid Cuts and Hardships

Medicaid has adopted several cost-cutting measures over the past few years, which have negatively affected the financial health of our organization. These include decreases in reimbursement rates, restrictions on the services that are covered, and added administrative burdens. Medicaid reimbursement rates have consistently been lower than the actual costs of providing care, resulting in significant revenue shortfalls (Schwarz, 2022). It is also challenging for us to offer our patients comprehensive care because some services that Medicaid used to cover have been eliminated or restricted. Medicaid now has a heavier administrative burden, requiring more resources to meet the intricate documentation and reporting requirements (June 2022 report to Congress on Medicaid and Chip 2023).

Impact on the Organization

The financial health of our organization has been significantly and adversely affected by Medicaid discounting. The combination of low reimbursement rates and inadequate service coverage puts our financial stability at risk (How will Medicaid work requirements affect hospitals’ finances? 2019). Consequently, we face considerable challenges in meeting staffing requirements, acquiring the necessary technology and equipment, and providing the level of care our patients deserve (Cunningham, 2016). The financial pressure we experience hampers our ability to meet the growing demand for healthcare services in our community, impeding our capacity to enhance infrastructure and expand our range of services.

Impact of Health Care Policies on Consumers’ Costs

Healthcare laws at the federal and state levels affect consumer costs in both positive and negative ways. Positively, the Affordable Care Act’s (ACA) Medicaid expansion has increased access to low-cost health insurance for more people. This has been especially advantageous for low-income individuals and families, particularly many of the recent immigrants in our community. However, Medicaid discounting has more detrimental effects than beneficial ones. Patients have higher out-of-pocket costs due to lower reimbursement rates and fewer coverage options, making it challenging for them to pay for essential healthcare services (Value-based payment).

Recommendations to Decrease the Deficit

From our organization’s standpoint, we suggest several modifications to address the financial deficit brought on by Medicaid discounting. To begin, advocate for adequate reimbursement rates that reflect the actual cost of care and actively involve policymakers in this effort. This includes emphasizing the difficulties faced by healthcare organizations in border regions and the particular requirements of immigrant populations. Second, expanding our services to patients with privately insured insurance is one way we plan to diversify our sources of income. We will also look into opportunities to apply for grants and form partnerships that may lessen the financial effects of Medicaid discounting. Third, enhance operational effectiveness without sacrificing care quality by concentrating on streamlining administrative processes, improving operational procedures, and implementing cost-saving strategies.

Actions to Alleviate Negative Effects

Our organization will take specific actions to meet the needs of various populations while alleviating the negative effects of Medicaid discounting. Firstly, we will invest in care coordination programs and technology to improve the efficiency and effectiveness of care delivery. We will fund these programs and improve the technology by applying for grants and partnerships, which will lessen the financial effects of Medicaid discounting. We can provide better patient care while spending less money by ensuring seamless coordination between providers, utilizing local resources, and not increasing costs for the consumer to make up for the cost of the technology improvements. Secondly, we shall expand preventive care and education by prioritizing preventive care services and health education programs to proactively address health issues, reduce the need for expensive interventions, and equip patients to make informed decisions about their health. Lastly, we will develop community partnerships by working with community organizations, regional governmental organizations, and other stakeholders to maximize resources, split costs, and create cutting-edge strategies to meet our community’s healthcare needs.


Medicaid discounting puts a significant strain on our organization’s finances and makes it difficult to meet the healthcare needs of our wide-ranging patient population. To overcome these difficulties, it is advised to promote reasonable reimbursement rates, diversify income sources, enhance care coordination, boost operational efficiency, expand preventive care and education, and foster community partnerships. By making these adjustments, we can work to give our patients high-quality care while preserving the viability of our organization’s finances.


How will Medicaid work requirements affect hospitals’ finances? Commonwealth Fund. (2019, March 14).

June 2022 report to Congress on Medicaid and Chip (2023) MACPAC. Available at:

Peter Cunningham, R. R. F. @RRudowitz on T. (2016, October 27). Understanding Medicaid hospital payments and the impact of recent policy changes – issue brief. KFF.

Schwarz, C. (2022) Kaiser Family Foundation Releases Report on Medicaid in 2022, Medicare Rights Center. Available at:

Value-based payment (2021) Center for Health Care Strategies. Available at:


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As demonstrated in the 2020 Census, the population of the United States continues to include greater percentages of immigrants. Many of these immigrants do not have private health insurance and thus rely on Medicaid. This has led to changes in the populations that healthcare organizations must serve.

Medicaid Discounting and its Impact on a Border Health Care Organization

Medicaid Discounting and its Impact on a Border Health Care Organization

Assume you are the administrator of a healthcare organization in a city in Texas bordering Mexico that accepts Medicaid as a payor. Recent Medicaid policies and discounting have contributed to the organization’s failing bottom line. Many of your clients have recently immigrated to the United States and are on Medicaid.

You have been asked to prepare an executive summary to present to the board of directors detailing how Medicaid discounting causes hardships on your organization’s finances and the health populations you serve.

Write a 525- to 700-word executive summary.

Include the following in your executive summary:

  • Clearly identify the type of facility that you are
  • Explain specific cuts that Medicaid has made in recent years.
  • Describe how Medicaid discounting causes hardships on your
  • Evaluate the impact that federal or state health care policies are having on consumers’ lives. Explore both positive and negative effects.
  • Recommend changes you propose to help decrease the deficit from the perspective of your
  • I recommend actions the organization can take to alleviate the negative effects of these changes while still meeting the needs of various populations.

Cite 3 reputable references to support your assignment (e.g., trade or industry publications, government or agency websites, scholarly works, or other sources of similar quality).

Format your assignment according to APA guidelines.

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