The winds of change began blowing early in the year as several governorships changed, state budgets were pushed to unprecedented limits, and the pace of recession recovery – specifically employment and corresponding health benefits. Six months later, there is ample evidence of significant cuts in state Medicaid funding resulting in emergency department challenges, primary care challenges, and a continued evaluation of accessibility.
It is important to note that funding from the federal stimulus package during the initial stages of the recession ended 30 June. The “rock” for states is their inability, by law, to restrict eligibility for Medicaid programs and the “hard place” is state projected deficits.
This week, Kaiser Health and CNN released an evaluation of current Medicaid strategy and expenditure. They noted in addition to the issues raised initially, the funding shortfall is predicted to lessen the number of physicians and physician extenders currently providing services to Medicaid covered lives.
The evidence – states reducing physician Medicaid payments:
- South Carolina
- Colorado
- Nebraska
- Oregon
- South Dakota
- Arizona
Hospital payments are not exempt. States lowering Medicaid payments to hospital providers include:
- Colorado
- Connecticut
- Florida
- Nebraska
- New Hampshire
- North Carolina
- Oregon
- Pennsylvania
- South Carolina
- Texas
- Virginia
- Washington
- New York
The current healthcare reform plan calls for Medicaid to increase coverage by 16 million eligible lives in 2014; this is on top of the current 50 million plus low-income and disabled lives currently.
A local health system announced last week its strategy is to position itself as the low cost provider. Part of this strategy is to position all of its employed physician staff to accept Medicaid patients. Heretofore, physicians often accept Medicare and Medicaid covered lives when launching their practice. Once their panels begin to build, the number of new patient visits dwindles exponentially. The current plan to meet the uptick in covered lives is to increase physician payment rates in 2013 and 2014 for primary care providers – increase them to match Medicare rates.
We have emphasized since Q4-2010 the need for health systems to understand and drill down as deeply as possible into current Medicaid covered lives – volume, revenue, utilization, access points. Five immediate action steps for a successful Medicaid strategy include:
- Identify current utilization patterns, access points, and CPT/MSDRG utilization for all patients – clinical and financial.
- Look for unique trends; for example, use of neonatal services, congestive heart failure patients, emergency department utilization. Once these trends are identified, begin immediate intervention to design lower cost access.
- Drop all barriers to Medicaid patients. Either help direct access to centralized clinical access points or create a wide-ranging net to integrate Medicaid patients into all points of care. Not selecting one or the other strategy will create havoc.
- Using the analytics described above, begin building predictive models of patient access and use in 2012, 2013, 2014. The predictive models will include current volume, market penetration, forecasted changes to the number of Medicaid covered lives, and volume/cost care for this population. The result may not be pretty; but, if incorporated in your annual budgeting and planning will not be a surprise.
The philosophical debate regarding healthcare coverage and safety nets will continue as long as there are political parties, elections, and economic problems. The objectives at this time are to (a) listen and actively engage in identifying a solution, and (b) build care delivery models that enable this growing patient population to seek and receive appropriate care.
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