September 16, 2010

Mr. Bruce Greenstein, Secretary

 Louisiana Department of Health and Hospitals

P.O. Box 91030

Baton Rouge, LA 70821

Dear Mr. Greenstein:

The Louisiana State Medical Society (LSMS) has very serious concerns about the impactof the Department of Health and Hospitals’ (DHH) plan announced by Don Gregory, Director of Health Services Financing in his letter of August 24, 2010 to recover Medicaid payments made to Louisiana physicians.

The unanticipated and crippling action called for in the plan became necessary when the Department failed to timely implement reimbursement cuts called for in the last two state budgets and mid-year cutsin 2010. Contending with an upward spiral of operating costs physicians who are stilltaking Medicaid patients will not only face future reimbursement rates 15%-45% less than 2008, but in addition they are now saddled with a debt to repay the Medicaid program.

This perfect storm of events will most certainly force physicians to decide whether they can continue to treat Medicaid patients.

The convergence of multiple cuts in Medicaid reimbursement and the subsequent payment recovery plan have physicians across the state anxious about their economicfuture and ability to continue to provide their patients access to essential health care services. In addition, the state’s ratio of physicians per 1000 in population is well below the national average and Louisiana is considered a physician underserved area.

Further,42% of Louisiana’s practicing physicians are more than 50 years old, an age at which studies have shown many physicians have considered reducing their patient activities or taking early retirement. This combination of factors paints a grim picture for access tocare throughout Louisiana.

Recent surveys conducted by the LSMS of its members document clearly the impact of significantly underfunding the delivery of health care to Louisiana’s Medicaid recipients. The surveys were conducted in March 2009 and again in July 2010 before the DHH announcement of the Medicaid payment recovery plan.

The following are some of the sobering findings of the latest survey:

• More than half of respondents (56.6%) indicated they have stopped or will stop accepting new Medicaid patients; another 24.8% are considering this as an option

.• A majority (69.0%) of respondents indicated they have either limited or will limit the number of new Medicaid patients accepted by their practice; another 16.0%are considering this option.

• 40.3% of respondents indicated they no longer see or will no longer accept any Medicaid patients; another 31.4% are considering this as an option.

• In response to the question of whether or not to close their practice in the face ofsevere Medicaid budget cuts, 43.3% responded they will take that action or are considering it.

• When asked to indicate their experience in referring Medicaid patients for specialty care, respondents who chose “difficult to make referrals” and “almost impossible to make referrals” the percentages are substantial: 94.9% in 2010 compared to 86.7% in 2009.

The physicians of Louisiana were aware of the looming cuts in Medicaid reimbursement contained in the 2009 and 2010 state budgets. They also were aware of additional cuts asa result the 2009 revenue shortfall requiring adjustments to the budget.

However, physicians continued to see and treat patients expecting timely notification by DHH of when the cuts were to take place. To the best of our knowledge, during the eighteen month period when these cuts were to be implemented only one attempt was made by DHH to make physicians aware of when the cuts were set to begin. That was a vague post on the DHH website in May 2010 that the Department intended to begin implementation of the previously approved cuts.

After a few weeks that notice was removed without explanation. The next notification was the August 24, 2010 memorandum from Mr. Gregory. The failure of DHH to keep physicians fully informedand give them the opportunity to plan ahead for the full brunt of accumulated budget cuts and the demand for partial claims repayment implies a lack of respect for the dedicated physicians in Louisiana who have continued to provide access to care for some of our most vulnerable Louisiana citizens.

The LSMS understands Louisiana finds itself in a financial crisis, however, we as a state should be moving to protect the Medicaid program as a safety net to meet our obligation to provide equal access to health care services for all Medicaid recipients.

The Board of Governors of the Louisiana State Medical Society approved a motion to explore various legal options to prevent further deterioration of the ability of Medicaid recipients to access essential health care services.

Sincerely,

Patrick C. Breaux, MD

President

PCB: ghl

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