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As the 31st State Expands Medicaid: Do We Need to Be Concerned About a Physician Shortage?

Recently, Montana became the 31st state, including D.C., to expand Medicaid. Discussion regarding Medicaid expansion is ongoing in one state: Utah. Nineteen (19) states have rejected Medicaid expansion, including NC.

When Medicaid expansion was first introduced, it was a highly polarized, political topic, with Republican governors, generally, rejecting expansion and Democrat governors, generally, accepting expansion.

Now, however, many Republican governors have opted to expand Medicaid. There are currently 31 Republicans, 18 Democrats, and one independent that hold the office of governor in the states. Yet, 31 states have expanded Medicaid. Here is an extremely, difficult-to-read chart outlining the states that have opted to expand, those that have opted to reject expansion, and the one state (Utah) still discussing:

caid expansion1medicaidexpansion2

I know, it’s hard to read. Feel free to go to the actual Kaiser website to see the chart readable by humans. (Microsoft’s “Snipping Tool” leaves much to be desired; Apple’s “Screen Shot” is much better, in my opinion).

An interesting fact is that, in its first week with Medicaid expansion, Montana had over 5,500 people sign up for Medicaid.

Another interesting fact is that, approximately 18,078 physicians graduate from medical school in America per year.  But in Montana?

montana

N/A…as in, none. Not applicable. You see, Montana does not have a medical school. It does participate in the Washington, Wyoming, Alaska, Montana, and Idaho collaborative program. However, the collaborative program does not do a stellar job at recruiting physicians to Montana. It tries. But the statistics are stacked against Montana.

“Sixty-eight percent of doctors who complete all their training in one state end up practicing there,” according to the Association of American Medical Colleges.

Yet Montana has no medical school. And expanded Medicaid. If any of you ever took economics, there is this accepted theory called, “supply and demand.”

supplyanddemand

Supply and demand dictates that, when supply is low and demand is high, the product, whatever it is, can be sold at the highest price. Medicaid expansion, however, is creating an anomaly. Medicaid expansion expects a higher demand to meet the lower supply without increasing the reimbursement rates. This is a fundamental flaw in Medicaid expansion. If, on the other hand, Medicaid expansion was premised on an increase in reimbursement rates, we may see an uptick in supply. When demand is high and supply is low, many people “demanding” get nothing.

Let’s think about how many patients each primary care physician can handle.

“According to a 2013 survey by the American Academy of Family Physicians, the average member of that group has 93.2 “patient encounters” each week — in an office, hospital or nursing home, on a house call or via an e-visit. That’s about 19 patients per day. The family physicians said they spend 34.1 hours in direct patient care each week, or about 22 minutes per encounter, with 2,367 people under each physician’s care.” See article.

physician need

“The baseline projections from BHPr’s physician supply and requirements models suggest that overall requirements are growing faster than the FTE supply of physicians (Exhibits 51 and 52). Between 2005 and 2020, requirements are projected to grow to approximately 976,000 (22 percent), while FTE supply is projected to grow to approximately 926,600 (14 percent). These projections suggest a modest, but growing, shortfall of approximately 49,000 physicians by 2020 if today’s level of health care services is extrapolated to the future population. ” See article.

This is not the first time I have noted the increasing physician shortage with Medicaid expansion. There is a huge difference in giving someone a Medicaid card and providing a person with quality health care. A card is a piece of paper. If you cannot find a physician..or psychiatrist…or pulmonologist….or neurosurgeon who will accept Medicaid, then your Medicaid card is simply a piece of paper, not even worth the paper upon which it is printed. See blog. And blog. And blog.

The same can be said with the shortage of dentists. See blog.

With a shortage of approximately 49,000 physicians in 2o20, I pray that I am not holding a Medicaid card.

If I am, I will be another victim of high demand with low supply.

NC Docs Face Retroactive Medicaid Rate Cut

This is a story from NC Health News by Rose Hoban…a follow up blog to come

In the 2014 state budget passed last August, state lawmakers inserted what could be considered a poison pill for Medicaid providers: a 3 percent pay cut that for specialists could be effective retroactively to January 2014.

Primary care providers such as pediatricians, internists and family doctors will see the same pay cut, effective back to Jan. 1, 2015.

But the cut is only now being implemented.

“All of us were optimistic that the cut wouldn’t happen,” said Karen Smith, a family doctor in Raeford who runs her own practice.

Smith said she and other physicians have been writing, calling and talking to legislators, working to convince them not to implement the cut.

But she and thousands of other primary care providers received notification late last week that on March 1 they would begin seeing the 3 percent cut.

And for specialists, the reduction will go back 14 months.

“It’s quite a hit,” said Elaine Ellis, spokeswoman for the North Carolina Medical Society.

Failed shared-savings plan behind the problem

The origin of the 3 percent cut goes back to the 2013 budget for Medicaid, the program that covers health care for low-income children, some of their parents, pregnant women and low-income seniors. In 2013, the federal government paid North Carolina 65.5 percent of every dollar billed for Medicaid-eligible care, while the state covered the other 34.5 percent (The rate, which changes annually, is 65.9 percent for 2015).
In 2013, the Medicaid budget had grown to close to $4 billion in state dollars, and lawmakers at the General Assembly were looking for ways to trim costs. So they devised a “shared-savings” program, in which Medicaid providers would take a 3 percent rate cut that would be collected by the state Department of Health and Human Services. If doctors and hospitals saved money by operating more efficiently, DHHS would share those savings back with the providers, effectively reducing the amount of the 3 percent cut.

But DHHS needed federal approval to initiate the program, which would have been complicated. The agency never submitted a plan to the federal government, so neither part of the program was initiated.

That created a problem for lawmakers, who had calculated the savings from the rate cut into their state budget. When lawmakers returned to Raleigh in 2014 to adjust the state’s biennial budget, they implemented the rate cut retroactively to Jan 1, 2014 for specialists. Primary care providers, such as Karen Smith, had their rate cut put off until the beginning of 2015.

Big bucks

Officials from the Medical Society have been gathering numbers from around the state and are finding that some specialty practices could owe tens of thousands of dollars that would need to be repaid to state coffers.

The need for retroactive payment is in part a logistical problem: The computerized Medicaid management information system, known as NCTracks, has not been able to process the cuts. NCTracks has had technical issues since it was rolled out in mid-2013; at that time, glitches in the system created months of delays and tens of thousands of dollars in unpaid services for providers.

“Requiring these [specialist] medical practices to pay back 3 percent of what the state has already paid them for the last 14 months would wreak havoc with the finances of these businesses – really, any business would struggle to recover from such a financial blow,” Robert Schaaf, a Raleigh radiologist and president of the Medical Society, wrote Monday in a press release.

And primary care doctors like Smith are also fretting over paying back 3 percent of what she earned from Medicaid for the past two months.

“Practices such as my own are functioning on an operating budget that’s month by month,” said Smith, who said that a great many of her patients are Medicaid recipients.

“We simply do not have that type of operating reserve to allow for that,” she said.

The cuts will be especially tough for rural providers, who have high numbers of Medicaid patients, said Greg Griggs from the N.C. Academy of Family Practitioners (The Academy of Family Practitioners is a North Carolina Health News sponsor).

“It’s one thing to make the cuts going forward, but to take money back, especially for that period of time, is pretty significant for people who’ve been willing to take care of our most needy citizens,” Griggs said.

“It’s pretty bad,” he said, “and its not like Medicaid pays extraordinarily well to begin with.”

Piling on

In addition to the state cut is a federal cut of 1 percent to Medicaid reimbursements for primary care providers that went into effect on Jan. 1.

As part of the Affordable Care Act, primary care providers like Smith got a bump in reimbursement last year, but that ran out with the new year. Smith said that legislators in other states found ways to keep paying that enhanced rate for primary care doctors.

“We were hoping our legislators would do the same,” she said.

Instead, Smith finds herself talking to her staff about possible reductions, and she’s hearing from providers in her area that they’re throwing in the towel.

“I already have colleagues who’ve left practice of medicine in this area,” she said. “My personal physician is no longer in this area. Another colleague who was a resident three years in front of me told me he cannot deal with the economics of practicing like this anymore.”

Smith acknowledged that North Carolina’s Medicaid program has a slightly higher reimbursement to physicians than surrounding states. But she said many of her patients are quite ill.

“We are in the stroke belt,” she said, referring to the high rate of strokes in eastern North Carolina. “When we look at how sick our patients are compared to other states, is it equivalent? Are we measuring apples to apples?