In an effort to curb rising Medicaid costs, about a dozen states are starting a new budget year by reducing payments to doctors, hospitals and other health care providers that treat the poor. Some health care experts say the cuts, most of which went into effect during July, could add to a shortage of physicians and other providers participating in Medicaid. I believe that reducing payment rates is a bad solution to the overall problem. In fact, that approach can only worsen the situation since severe Medicaid physician shortages already exist in many states.
Insurers and employers should also be concerned about the payment cuts. Cutting the rates will prompt providers to raise their prices for patients who have private insurance. States that reduced Medicaid payments to physicians are South Carolina, Colorado, Nebraska, Oregon and South Dakota. Arizona, which cut rates in April, will impose another cut in October. States reducing payments to hospitals include Colorado, Connecticut, Florida, Nebraska, New Hampshire, North Carolina, Oregon, Pennsylvania, South Carolina, Texas, Virginia and Washington. New York cut hospital payment rates in April.
In March, California approved a 10% Medicaid cut to doctors and hospitals, but those reductions are pending because of an existing lawsuit. The payment cuts, which require federal approval, are part of a larger effort by states to reduce the cost of Medicaid, typically the largest expenditue or second-largest expenditure after education. In some states, dental services and other optional benefits have gone under the knife. And many states are requiring enrollees to sign up for private Medicaid managed care plans.
Medicaid, a joint state-federal health care program, serves more than 50 million low-income and disabled people. Under the 2010 health care law, more than 16 million additional people will become eligible starting in 2014, with the federal government picking up most of the cost. To entice more physicians to accept Medicaid patients, the law raises rates for primary care doctors in 2013 and 2014 to match those paid by Medicare, the health care program for seniors. On average, states currently pay Medicaid providers about 72% of what Medicare pays.
Federal-state Medicaid costs were $366 billion in fiscal 2009. The federal stimulus package gave states $100 billion to help pay their share, but that funding ended on June 30th. “States are struggling,” according to Laura Tobler, a policy analyst at the National Conference of State Legislatures. The new health law bars states from restricting eligibility for the program. Nearly half of the states cut provider payments in the fiscal year that ended in June, according to the National Association of State Budget Officers.
Source: USA Today
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