America's Health Insurance Plans (AHIP)
June 23, 2010
Medicaid Provision Could Turn Into 'Another SGR,' Some Advocates Fear
By Amy Lotven, Inside Health Reform
Under the reform law, starting in 2013 Medicaid payments for primary care physicians must equal 100 percent of Medicare payments, but Congress only funded the policy for two years due to fiscal constraints.
The Republican Study Committee (RSC), in a March 26 policy brief on the health reform law, calls the payment boost a "budget gimmick" and notes that "history has shown that this two-year increase will likely be increased every year after the 'sunset date,' thus hiding the true cost of the provision."
"While many conservatives may believe that physicians in Medicaid should be paid more, many may believe that we should not be expanding this flawed program to begin with."
The RSC also notes that the provision could be seen as "just another SGR," referring to the annual congressional move to stave off physician payment cuts resulting from Medicare's sustainable growth rate.
But primary care stakeholders are already working to mitigate the issue. The American Academy of Family Physicians says that it will be asking lawmakers to extend the provision to cover a longer period. "It is likely that any extension will be of specified duration because of its impact on the federal budget," AAFP writes on its web site. "Nonetheless, physicians are not likely to begin taking Medicaid patients if they know that the higher payment rates are not going to continue. As Medicaid coverage expands, this will create an untenable situation in which more patients will be covered but have no physician practice that can take them," the site adds.
The provision in the final legislation was obviously crafted so as to address fiscal constraints, AAFP President Lori Heim said. Essentially, the legislation expands Medicaid to an estimated 17 or so million people starting in 2014 and as of now the funding is slated to end that same year. If all of these people gain access to physicians at that point, what will happen in 2015? Heim asked.
California HealthCare Foundation
Physician Participation in Medi-Cal
While 90% of California physicians are accepting new patients and 73% accepting new Medicare patients, only 57% reported accepting new Medi-Cal patients.
Medi-Cal patients are concentrated in a small share of practices, with 25% of physicians providing care to 80% of Medi-Cal patients.
Comment: Medicaid, being a welfare program with piddling political support, has been chronically underfunded. Yet, in the reform legislation, expansion of Medicaid eligibility is one of the more salient policies, designed to extend Medicaid coverage to perhaps 17 million more individuals. Will we have enough willing primary care professionals to take care of them?
Close to half of physicians already are unwilling to accept any Medicaid patients at all, and the patients who do receive care tend to be concentrated amongst one-fourth of physicians.
Congress recognized that there would be a reluctance on the part of primary care physicians to absorb this influx of Medicaid patients, so they increased payment rates for primary care services to the same level as Medicare. But the increase is scheduled for only two years merely because an arbitrary federal spending limit constrained the reform policies.
The increased fees will apply the year before and the first year of the Medicaid expansion. Physicians are already unhappy with the continued uncertainties over the future of Medicare payments since Congress has repeated failed to enact a revision to the SGR formula (sustainable growth rate), without which physicians could see dramatic reductions in Medicare payments. Physicians do not see Congress as reliable partners.
Why would any physician sign up a large number of new Medicaid patients in 2014, if the next year rates will be reduced to levels that already have caused physicians to refuse to participate in the program? It is likely that the one-fourth of physicians who already are dedicated to caring for Medicaid patients will be inundated, and at a time when we already have a serious primary care crisis.
The increased funding for community health centers may provide some relief, but serious logistical problems may impair adequate access - problems such as health center location and transportation to it, the shortage of primary care professionals to staff the centers, and the continual struggle with funding. Also, whether Medicaid patients are seen in primary care practices or community health centers, access to specialized care is very limited, primarily because of a lack of willing providers.
Medicaid is branded with the stigma of being a welfare program because it is a welfare program, quite unlike Medicare which is a social insurance program. Not only is Medicaid humiliating for the patients, it also creates fiscal problems for the health care delivery system because of chronic underfunding.
The Medicaid problem could be eliminated quite easily. It would be much more efficient, equitable, and less costly overall to have a social insurance program that covered absolutely everyone - an improved Medicare for all.