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Medicaid Forecast: Cloudy with 100% Chance of Trump

Regardless how you voted, regardless whether you “accept” Trump as your president, and regardless with which party you are affiliated, we have a new President. And with a new President comes a new administration. Republicans have been vocal about repealing Obamacare, and, now, with a Republican majority in Congress and President, changes appear inevitable. But what changes?

What are Trump’s and our legislature’s stance on Medicaid? What could our future health care be? (BTW: if you do not believe that Medicaid funding and costs impact all healthcare, then please read blog – and understand that your hard-working tax dollars are the source of our Medicaid funding).

WHAT IS OUR HEALTHCARE’S FORECAST?

The following are my forecasted amendments for Medicaid:

  1. Medicaid block grants to states

Trump has indicated multiple times that he wants to put a cap on Medicaid expenses flowing from the federal government to the states. I foresee either a block grant (a fixed annual amount per state) or a per capita cap (fixed dollar per beneficiary) being implemented.

What would this mean to Medicaid?

First, remember that Medicaid is an entitlement program, which means that anyone who qualifies for Medicaid has a right to Medicaid. Currently, the federal government pays a percentage of a state’s cost of Medicaid, usually between 60-70%. North Carolina, for example, receives 66.2% of its Medicaid spending from Uncle Sam, which equals $8,922,363,531.

While California receives only 62.5% of its Medicaid spending from the federal government, the amount that it receives far surpasses NC’s share – $53,436,580,402.

The federal funding is open-ended (not a fixed a mount) and can inflate throughout the year, but, in return, the states are required to cover certain health care services for certain demographics; e.g., pregnant women who meet income criteria, children, etc. With a block grant or per capita cap, the states would have authority to decide who qualifies and for what services. In other words, the money would not be entwined with a duty that the state cover certain individuals or services.

Opponents to block grants claim that states may opt to cap Medicaid enrollment, which would cause some eligible Medicaid recipients to not get coverage.

On the other hand, proponents of per capita caps, opine that this could result in more money for a state, depending on the number of Medicaid eligible residents.

2. Medicaid Waivers

The past administration was relatively conservative when it came to Medicaid Waivers through CMS. States that want to contract with private entities to manage Medicaid, such as managed care organizations (MCOs), are required to obtain a Waiver from CMS, which waives the “single state entity” requirement. 42 CFR 431.10. See blog.

This administration has indicated that it is more open to granting Waivers to allow private entities to participate in Medicaid.

There has also been foreshadowing of possible beneficiary work requirements and premiums.Montana has already implemented job training components for Medicaid beneficiaries. However, federal officials from the past administration instructed Montana that the work component could not  be mandatory, so it is voluntary. Montana also expanded its Medicaid in 2015, under a Republican governor. At least for one Medicaid recipient, Ruth McCafferty, 53, the voluntary job training was Godsend. She was unemployed with three children at home. The Medicaid job program paid for her to participate in “a free online training to become a mortgage broker. The State even paid for her 400-mile roundtrip to Helena to take the certification exam. And now they’re paying part of her salary at a local business as part of an apprenticeship to make her easier to hire.” See article.

The current administration may be more apt to allow mandatory work requirements or job training for Medicaid recipients.

3. Disproportionate Share Hospital

When the ACA was implemented, hospitals were at the negotiating table. With promises from the past administration, hospitals agreed to take a cut on DSH payments, which are paid to hospitals to help offset the care of uninsured and Medicaid patients. The ACA’s DSH cut is scheduled to go into effect FY 2018 with a $2 billion reduction. It is scheduled to continue to reduce until FY 2025 with a $8 billion reduction. The reason for this deduction was that the ACA would create health coverage for more people and with Medicaid expansion there would be less uninsured.

If the ACA is repealed, our lawmakers need to remember that DSH payments are scheduled to decrease next year. This could have a dramatic impact on our hospitals. Last year, approximately 1/2 of our hospitals received DSH. In 2014, Medicaid paid approximately $18 billion for DSH payments, so the proposed reductions make up a high percentage of DSH payments.

4. Physician payment predictability

Unlike the hospitals, physicians got the metaphoric shaft when the ACA was implemented. Many doctors were forced to provide services to patients, even when those patients were not covered by a health plan. Many physicians had to  increase the types of insurance they would accept, which increased their administrative costs and the burden.

This go-around, physicians may have the ear of the HHS Secretary-nominee, Tom Price, who is an orthopedic surgeon. Dr. Price has argued for higher reimbursement rates for doctors and more autonomy. Regardless, reimburse rate predictability may stabilize.

In the Future, Could Physicians Be Forced to Accept Medicaid?

According to a report in the “Mason Conservative,” Virginia Democrat delegate candidate, Kathleen Murphy, stated, during a debate, that the government should force physicians to accept Medicaid.

After reading that, how many of you shuddered from horror?

I think we can all agree that we need more physicians to accept Medicaid.  We simply do not have enough physicians to meet the needs of all our Medicaid recipients.  Not enough physicians equals not enough quality health care to our most needy.  In particular, rural areas suffer most from the lack of physicians who accept Medicaid.

According to Forbes magazine, “Right now, the United States is short some 20,000 doctors, according to the Association of American Medical Colleges. The shortage could quintuple over the next decade, thanks to the aging of the American population — and the aging and consequent retirement of many physicians. Nearly half of the 800,000-plus doctors in the United States are over the age of 50.”  I’m sure Forbes would have found even more shortage had it researched the rural areas.

But is the answer to force doctors to accept Medicaid?

A week or so ago I saw my primary care physician.  I’ve seen my primary care doctor for years. (We will call him Dr. Bob).  He’s a native North Carolinian, just like I.  So he knew me in college, law school, and for the past 13 years of my legal career, both pre-baby and post-baby.  Until a week or so ago, I always knew Dr. Bob accepts Medicaid as a form of insurance.  I liked that he did.

Per our normal routine, Dr. Bob asks about my husband, my daughter, and my job.  But, usually he is extremely interested in “all-things-Medicaid.”  He normally asks the status of reimbursement rates, my opinion on the current administration, my perception of the trend at my job (who was getting audits, who may be getting audits soon, etc.), and other various Medicaid-related issues.

But, at my visit, Dr. Bob fails to ask about the current events of Medicaid.  And I, being I, just started talking about Medicaid.  He interrupts me and says, “Knicole, I made a difficult decision since I have seen you last.”

Pause….I’m expecting:

Retirement….possible divorce???

Retirement….change in profession???

Retirement…closing his practice???

Instead, Dr. Bob says, “I’ve decided to no longer accept Medicaid.”  (My jaw is agape).

My first instinct is, “What? But you CARE! How could you?”

My second instinct is, “I get it. Medicaid is a hassle.”

My third instinct is to actually ask HIM why HE made this decision. (My first couple instincts are usually the wrong route).

When I ask him why he decided to no longer take Medicaid, his response is “I’m sick of people who are not physicians telling me what to do in my practice.”

I get it. 

As a primary care physician, the bulk of his Medicaid work is conducting physicals (or what Medicaid calls, “preventative care”).

He says that he is ‘ok’ with the low reimbursement rates of Medicaid because he is able to offset the low reimbursement rates by accepting more privately insured patients (like me).  He says he loves serving the Medicaid population. His issue lies in the administrative burden of accepting Medicaid versus accepting private insurance, including the regulatory audits, the way in which the regulatory audits are conducted, NCTracks debacles, and possible unannounced payment suspensions…to name a few.  Dr. Bob explains that when he decides a procedure is “gender-and-age-appropriate,” inevitably, someone, from some, state-contracted company, will come back to him a couple of years later to recoup the Medicaid money because that (non-physician) auditor disagrees that the procedure he chose, as a physician, was “gender-and-age-appropriate.”

DMA Clinical Policy 1A-2 defines preventative care as, “An adult preventive medicine health assessment consists of a comprehensive unclothed physical examination, comprehensive health history, anticipatory guidance/risk factor reduction interventions, and the ordering of gender and age-appropriate laboratory and diagnostic procedures.” (emphasis added).

He describes an audit during which an auditor, who was not a physician, attempted to recoup a date of service (DOS), citing the reason as the procedure was not “gender-and-age-appropriate.”  How can a non-physician decide what treatment is or is not “gender-and-age-appropriate?”

I’ve seen this before.  In behavioral health care audits, an auditor with no substance abuse clinical background determines no medical necessity exists for a service for a Medicaid recipient suffering from substance abuse.  In dental audits, an auditor without ever attending dental school, will determine that a partial implant is not medically necessary.

N.C. Gen. Stat. 108C-5 requires that, “[a]udits that result in the extrapolation of results must be performed and reviewed by individuals who shall be credentialed by the Department, as applicable, in the matters to be audited, including, but not limited to, coding or specific clinical issues.” (emphasis added).

Credentialed in the matters to be audited.

Is DHHS seriously credentialing non-physicians to audit physician? Non-dentists to audit dentists? Non-substance abuse clinical providers to audit substance abuse clinical providers?

I do not know whether DHHS is credentialing the auditors, but, in my experience, non-qualified auditors (in the field in which they are auditing) are conducting audits.

Going back to my original premise, are we going to force/require that physicians, in order to be physicians, to accept Medicaid, thus subjecting themselves to limitless and unannounced Medicaid audits? To force physicians to undergo the administrative burden that comes with Medicaid audits, not to mention the administrative burden to just follow Medicaid regulations?  To force physicians to accept the quite possible possibility that the physician will need to defend him or herself against audits and incur steep attorneys’ fees?

In Dr. Bob’s case, he did accept Medicaid for years.  Then, he consciously made the decision that he no longer wanted to be subject to the regulatory scrutiny that comes with accepting Medicaid.  So, now, would we force Dr. Bob to undergo the very scrutiny he so loathes?

It would be similar to the State forcing all attorneys to accept clients at a discounted rate and accept the threat of audits.  Or forcing accountants to accept clients at a discounted rate and accept the threat of audits.  Or forcing a plumber to accept clients at a discounted rate and accept the threat of audits.

Don’t we, in the United States, have the economic freedom to own private property, thus, logically, allowing us the right to pursue private property?

“We hold these truths to be sacred & undeniable; that all men are created equal & independent, that from that equal creation they derive rights inherent & inalienable, among which are the preservation of life, & liberty, & the pursuit of happiness;…”

See the Declaration of Independence.

I understand that Ms. Murphy’s comment was just that…a comment at a debate.  But her comment demonstrates that, while politicians understand there is a shortage of physicians who are willing to accept Medicaid, some politicians may believe that physicians should be forced to accept Medicaid.

But aren’t we all entitled to the economic freedom to pursue private property, happiness, and liberty?

Or is that all a ruse?