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.
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.”
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?
I am constantly amazed at the amount of knowledge that I do not know. And how quickly the knowledge I have becomes obsolete due to changes. To quote Lewis Carroll’s “Alice and Wonderland,” “Why, sometimes I’ve believed as many as six impossible things before breakfast.” My other favorite quote series from Lewis Carroll is the following scene:
“But I don’t want to go among mad people,” Alice remarked.
“Oh, you can’t help that,” said the Cat: “we’re all mad here. I’m mad. You’re mad.”
“How do you know I’m mad?” said Alice.
“You must be,” said the Cat, or you wouldn’t have come here.”
So too, must I be mad, I think, at times, for dealing with Medicaid and Medicare law. The statutes and regulations are vast and ever-changing. You can easily miss a policy change that was disseminated by an update posted on the web. But, I am a lawyer…I read a lot. But providers are held accountable as well for every revision and every update.
Just when you think you understand the State Plan, the Department of Health and Human Service (DHHS) asks the Center for Medicare and Medicaid Services (CMS) for an amendment.
In this blog, I am going to discuss 2 issues. (1) What is the State Plan and why is it important; and (2) how can providers stay abreast of the ever-changing Medicare/caid world and policies.
(1) Our State Plan
What is our State Plan in Medicaid? Is it law? Guidance? Does NC have to follow the State Plan? Can NC amend the State Plan?
These are all good questions.
The State Plan is a contract between North Carolina and the federal government describing how NC will administer its State Plan, i.e., Medicaid program. The State Plan describes who can be covered by Medicaid, what services are available, and, basically, assures the federal government that we will abide by certain rules and regulations. NC must follow the State Plan or risk losing federal funding for Medicaid, which would be BAD.
Quite often, the Department of Health and Human Services (DHHS) will issue a State Plan Amendment (SPA) to the Centers for Medicare and Medicaid Services (CMS). DHHS has to post all proposed amendments on its website “10 Day Posting for Submission to CMS.” This internet site should be in your “favorites,” and you should check it regularly.
For example, February 27th, DHHS asked to reduce Medicaid reimbursements methodologies for Chiropractic Services, Podiatry Services and Optometry Services to 97% of the July 1, 2013, rate, effective January 1, 2014 (yes, retroactively).
Just in 2014, there have been approximately 10 SPA requests. So, these SPAs are relatively common.
So, question #2…how can you keep up?
(2) Keeping abreast of all changes
As much as I would love to throw my computer out the window (I am on the 16th floor) and watch it crash, computers and technology can be very helpful. And technology makes it easy for everyone, even busy health care providers, to stay current on changes, amendments, and revisions to Medicaid/care policies and law.
Here is the secret: (shhhhhhhhh!!)
If you want to keep current on NCTracks, all you have to do is set a Google alert with the search term “NCTracks,” and you will receive daily email alerts on all internet articles on NCTracks. It is that easy.
So how do you set up a Google Alert? I have drafted a set by step process, otherwise entitled “Google Alerts for Dummies.”
1. Go to Google.
2. At the top of the page you will see the words: “You,” “Search,” “Images,” “Maps,” “Play,” “Youtube,” “News,” “Gmail,” and “More.” Click on “More.”
3. When the box drops, at the very bottom, you will see “even more.” Click on “even more.”
4. Scroll down to specialized search and click on “Alerts.”
5. Type in whatever search term you like, such as “Medicaid,” or “Knicole Emanuel.”
6. Decide how often you want to be alerted and your email address.
You will now be alerted about your topic. See? Easy!!
Now, because of this blog, you have learned two or more impossible things before lunch.