Physicians must be able to viably practice, and fair Medicaid compensation would help.
When a business is no longer financially viable, tough decisions must be made. That, regrettably, holds true for health care as well. Even though it is a caring profession, physicians must also care for the businesses they run, and that can even mean closing a practice.
When a physician has to close a practice, we know that patients not only lose a doctor who knows their history, they also lose access to care, face longer wait times and potentially risk delayed diagnosis during that wait. While all patients in a community suffer when a physician closes the doors, those on Medicaid are further disadvantaged as they very likely will have a challenge finding another practice in their community willing to see them.
Medicaid reimbursement rates don’t come close to covering the cost of providing care, and many practices — to keep their business afloat — must limit the number of Medicaid patients they can treat. Medicaid provides coverage for eligible low-income adults, children, pregnant women, elderly adults and people with disabilities, and is supported by state and federal dollars. Historically, Medicaid rates have been extremely low, covering just 66 percent of what Medicare, the other government sponsored program for seniors and the disabled, pays for the same service.
Nationally, policymakers sought to address this conundrum with the Affordable Care Act. Expanding access to Medicaid coverage to more patients also created a need to make sure these patients had access to providers who would treat them. Hoping to sweeten the pot, the federal government agreed to fully cover the cost to increase Medicaid payments to the same rate as Medicare for primary-care services only, and only for the first two years of expansion — 2013 and 2014. After 2014, the understanding was to continue at the higher payment rate, the state would have to pay a portion of those costs out of their own coffers. In 2015 the payment rate increase stopped.
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Except for that short-lived bump in rates, Medicaid rates receive only minor adjustments annually, and those are nowhere near on par with the cost of medical inflation. Last year, the state Legislature enacted an increase for pediatric services under the Medicaid program after they realized that the impact of a 35 percent reduction in rates was seriously reducing access to care for children. While a positive and appreciated step, this one-off increase doesn’t address the larger crisis looming.
The average cost to a medical practice in Washington for a Medicaid visit is two to three times the amount it costs to provide the service. What business can survive when its receivables are lower than its expenses?
This unhealthy consequence of impractical reimbursement rates is a shortage of physician availability for Medicaid patients. In a recent Washington State Medical Association survey of 872 physicians, more than a third of respondents — physicians of all specialty types — reported that they no longer see Medicaid patients, largely due to low reimbursement rates. And when it comes to accepting new Medicaid patients, 49 percent of physicians in small practices said they are less likely to accept new Medicaid patients.
With more than 1.7 million Washingtonians enrolled in Medicaid and Children’s Health Insurance Program (CHIP), that affects a significant portion of our population.
Even so, physicians do what they can to balance the business of care with caring for the business. They entered this profession to help and to heal. But the miserable reality is that some practices may not be able to bear the losses, which can compel the need to limit what insurance plans they will take — a further loss suffered by both physicians and their patients.
There is a ready solution to this problem: Raise Medicaid rates to at least the level Medicare pays — for all physicians of all specialties — which would help ensure that the very real cost of delivering care is at least modestly covered.
At the WSMA, we want all patients and communities to have access to care where and when they need it. Physicians must be able to viably practice, and fair Medicaid compensation would help.