Pay for some Medicaid doctors headed for 'especially big cliff'
Posted July 11, 2014
Raleigh, N.C. — Family doctors in North Carolina are bracing for a looming deadline that will slash the amount they're paid for the treatment of the state's poor and disabled.
On Jan. 1, a two-pronged state and federal cut to Medicaid reimbursement rates will mean a drop in payments of 15 percent or more for primary care physicians. Opponents of the cuts say they will return reimbursement rates to pre-2012 levels, a major hit for doctors considered a first line of defense against more costly medical care.
"It's a pretty devastating blow," Gregory Griggs, executive vice president of the North Carolina Academy of Family Physicians, said. "Within a month or so, you're going to see people have to make tough decisions."
Primary care doctors will see two things happen to their Medicaid reimbursement rates for the new year.
First, a temporary boost to Medicaid payments for general practitioners put into place by the Affordable Care Act will expire. Meant to encourage more general practitioners to treat the poor and disabled with less costly preventative care, the lapsed measure amounts to a 15 percent cut, Griggs said.
The deadline also triggers a 3 percent cut mandated by state lawmakers in 2013 as part of a so-called "shared savings plan," which is supposed to pay medical providers back for efficient and effective care. Primary care doctors were originally exempted from that plan – at least until Jan. 1.
"They are headed for an especially big cliff," Robert Seligson, chief executive of the North Carolina Medical Society, said in a statement Thursday.
Rate reductions could cause costly ripple effects
By several measures, Griggs said, North Carolina fares better than most when it comes to doctors who focus on managing and preventing illnesses and keeping patients out of the hospital – the most costly form of treatment.
Like most states, North Carolina has a shortage of primary care physicians, although Griggs said it's not as bad as other states across the country and in the Southeast.
North Carolina's Medicaid program also pays these doctors better rates than other states, he said. Right now in North Carolina, he said, about 90 percent of primary care physicians accept Medicaid.
But Griggs worries the coming changes may reduce options for low-income patients, especially in urban areas where Medicaid patients make up a smaller portion of each practice's income.
"[Providers in] very rural areas of the state with high percentages of Medicaid patients – they're going to keep taking it and try to survive at that lower rate," he said. "I worry more about our metropolitan areas like the Triangle where practices may throw up their hands and say, 'I'm not going to take Medicaid anymore.'"
Those tough choices will fall to providers such as Dr. Conrad Flick at Family Medical Associates of Raleigh. Flick said most primary care doctors treat Medicaid patients as an obligation to the community, only breaking even in most cases.
But for more rural practices with high percentages of Medicaid patients, Flick said, consolidating with larger health systems like Duke or UNC is the only way to stay in business.
"You're really crippling them to the point where they have to be owned by somebody else and increase the cost of care to everybody in that community," Flick said. "Somebody has to pay the bill."
One way or another, Griggs said, patients who don't use Medicaid will start to feel the ripple effects of more costly treatment.
"What people need to understand is the ability to fund health care impacts all of us," he said. "What happens when we don't take care of those who are disabled, those who are challenged in other ways? We're going to pay for those health care costs down the road."
Some changes hinge on General Assembly budget talks
Any changes to the Affordable Care Act expiration would take action from Congress.
But the 3 percent cut is now in the hands of state lawmakers, who could alter the shared savings plan during their ongoing budget negotiations.
The plan, originally mandated in the General Assembly's 2013-15 budget, required the state Department of Health and Human Services to begin withholding 3 percent of Medicaid reimbursements for providers across the state – with the exception of primary care doctors. The law required DHHS to craft a plan to pay that money back to providers in the form of incentives for effective and efficient care.
But in a report to lawmakers on March 1, state health officials argued they did not have enough time to implement the complex plan and start doling out money by Jan. 1, 2015. Citing extensive federal requirements for shared savings plans, they asked state lawmakers to reconsider or clarify the legislation during the short session.
With budget negotiations between the state House and Senate ongoing, it's unclear what that clarification will ultimately look like. Current plans from both chambers repeal the shared savings plan but maintain the cut, although there are some differences.
Seligson said the Medical Society opposes the reductions, calling them "short-sighted and dangerous."
"History has taught us that this type of reduction will mean less access for patients, and ultimately they will seek care in more expensive settings," he said in the statement.
Meanwhile, DHHS continues to withhold the payments to providers, collecting an estimated $21 million in the first six months of 2014, according to a December notice from the department.
It's unclear what will become of that money.
A DHHS spokesperson said officials at the agency were unavailable for interviews this week. The department has not yet responded to written questions submitted Tuesday evening.
Flick said however incremental the cuts on the state level may seem, they add up quickly for the very providers who are key to keeping costs in check.
"I'd like for people to look beyond the budget cycle," Flick said. "This is really about how health care plays out down the road."
Some doctors say they're still owed payment
Although temporary, the premium rate primary care doctors were allowed to collect per the Affordable Care Act meant a sizable boost to the bottom line. Instead of the lower Medicaid rate, doctors could receive reimbursements at the 15 percent higher Medicare rate starting Jan. 1, 2013.
"The whole purpose of this ACA thing was to encourage primary care doctors to see Medicaid patients," Dr. Albert Abrons, who practices family medicine in Wilmington, said.
But the July roll-out of NCTracks, the state's new system for paying Medicaid claims, complicated that federal mandate. Through NCTracks, DHHS was unable to process claims at the higher rate until Oct. 22, when they launched a tool that allowed doctors to affirm they were primary care providers.
In a memo to providers updated in April, DHHS officials wrote that retroactive pay would be available only to doctors who completed this process prior to the July 1 launch.
For Abrons, who signed up using the tool in October, that equates to months of missing payments for a practice with about 40 percent of its patients on Medicaid.
"That isn't good enough, because they should be paying me and every primary care provider," Abrons said.
A memo from the federal Centers for Medicare and Medicaid Services says states that were not prepared to make the higher payments by Jan. 1, 2013, should "ensure providers receive payment for the difference."
"Qualified providers should receive the total due to them under the provision in a timely manner," the memo reads.
Abrons estimates DHHS owes him at least $60,000, an "uncomfortable feeling" for the small practice. But he's worried many primary care doctors don't know what they're owed, especially given the rocky start many providers experienced with the launch of the NCTracks system.
"People have been so overwhelmed with this whole business with NCTracks that, frankly, they're just grateful for getting a flow of cash," said Abrons, who is a party in the class-action suit against state health officials over NCTracks. "If you starve a dog long enough, he's grateful that you feed him."
Abrons said he's contacted DHHS officials about the problem, but hasn't heard back.
DHHS has not yet responded to written questions from WRAL News about the backdated payments or Abrons' case.