August 13, 2012

2 in 5 doctors shun Medicaid patients

Physicians in Connecticut are voting with their feet on the state's expanding Medicaid program.

Nearly 40 percent of in-state physicians did not accept new Medicaid enrollees last year, according to a recently released study by health policy publisher Health Affairs, which could restrict access to primary care doctors for some low-income residents.

It's an issue that has some health care industry officials concerned, especially as the state prepares to add up to 200,000 new Medicaid patients in the coming years as a result of health care reform.

Connecticut doctors, many of whom still operate in small practices, say they aren't adding new Medicaid patients because inadequate reimbursement rates make it financially difficult to do so.

But there are other issues as well. Doctors say administrative hassles, poor communications with the state, and unreceptive provider relations over the years also plays a role in their lack of participation in health care programs for the poor.

"Traditionally, doctors in Connecticut are small business owners and have to make a decision on what they could do to keep their business viable," said Ken Ferrucci, a lobbyist for the Connecticut State Medical Society. "Sometimes that means they can't continue to see lower payers that require higher administrative costs."

Nationally, about 31 percent of physicians did not accept new Medicaid patients in 2011, according to the Health Affairs survey, which was conducted by National Center for Health Statistics economist Sandra L. Decker. Meanwhile, 8 percent of physicians nationally weren't accepting new self-pay patients and 17 percent weren't taking on new Medicare patients.

Connecticut had a higher percentage of doctors not accepting new Medicaid patients than the national average, but Decker said the difference was not statistically significant.

Regardless, there are fewer doctors accepting Medicaid patients than there has been in the past, Decker said.

The Health Affairs survey was based on 2011 data. Since then, Connecticut has significantly changed the way its Medicaid programs operate.

Earlier this year, Connecticut switched from a managed care to a self-insured administrative services organization model, which eliminated health insurance companies from state health care programs and made the state responsible for assuming financial risk for the cost of a medical claim.

The change, which aims to reduce costs by eliminating some overhead expenses, impacted about 600,000 residents including 165,000 seniors and younger adults, and 391,000 children and parents in Husky A, Husky B, and Charter Oak Health Plans.

Connecticut spends more than $4 billion annually for its various Medicaid programs. The costs account for about 20 percent of the state budget.

David Dearborn, a spokesman for the Department of Social Services (DSS), which administers the state Medicaid programs, said their medical staff has "not reported primary care access as a problem trend with our new HUSKY Health/Medicaid system that began Jan. 1."

Still, provider willingness to see Medicaid patients is an issue.

Lack of access to primary care can force Medicaid patients into emergency rooms, where costs are higher than in a primary care office.

In 2009, Connecticut Medicaid patients made up 35 percent of emergency department visits that did not require inpatient admission, according to DSS estimates.

Concerns over Medicaid reimbursements is certainly not a new issue, and health care providers in Connecticut have long complained about inadequate payments to cover the costs of seeing some low-income patients.

Some estimate that for every dollar of cost incurred, in-state providers are paid about 70 cents by Medicaid, a program funded jointly by the state and federal governments.

"Reimbursement rates for Medicaid are below commercial rates," Ferrucci said.

But payments aren't the only issue. Even when the state substantially increased Medicaid reimbursement rates in 2008, it made little difference in providers' willingness to accept public program patients, said Ellen Andrews, the executive director of the Connecticut Health Policy Project.

Andrews' organization published a report last year that explored why many Connecticut doctors don't participate in Medicaid.

Besides reimbursement rates, the report found that providers also had major problems dealing with DSS, citing the amounts of paperwork, late payments, rude treatment, poor communications, and unreceptive provider relations.

Andrews said the "basic failure of administration at DSS," has caused many doctors to turn away from the Medicaid program over the years, although things are getting better under new DSS Commissioner Roderick L. Bremby.

Andrews said Bremby has been responsive to the issues laid out in her report and has been making progress on almost all the recommendations to improve the system.

"I think things are getting better, at least I am hearing fewer complaints," Andrews said.

Ferrucci, of the medical society, said the administrative hassles are a particular problem for the small physician practices in the state that lack back office resources.

However, he anticipates that more Connecticut doctors will begin to participate in the Medicaid program when several new measures under the federal health care reform law kick in.

Beginning in January 2013, for example, the health care law requires states to reimburse primary care services for Medicaid patients at 100 percent of Medicare rates, which are higher than Medicaid. The federal government will pick up the tab for the higher reimbursement rates for two years.

"Hopefully we will see an influx of doctors participating in the program, but there are a lot more factors involved than just reimbursement rates," Ferrucci said.

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