Recent cuts to the state’s reimbursement rates mean few physicians will accept new Medicaid patients, placing even more pressure on emergency rooms, according to a recent survey of Louisiana State Medical Society members.
Two-thirds of doctors responding said they would be unable to accept new patients in the wake of the state Department of Health and Hospital’s roughly 10 percent cut in reimbursements.
Dr. Vincent Culotta, chair of the society’s Council on Legislation, said if Medicaid patients have no other options, they end up in an emergency room, where care is the most expensive.
“It’s a system that’s penny-wise and pound-foolish,” Culotta said. “Patients are going to need the care. When you don’t pay people to do it, and you expect the doctor to give a quarter away for a nickel, the docs are not going to do it.”
The Medical Society and others in the industry believe pushing patients to emergency rooms will drive up hospitals’ costs. But at the same time, hospitals’ revenue will be affected because their Medicaid reimbursements have also been lowered due to the budget cuts.
Culotta said the result will be a slow and insidious system of declining service.
Culotta said state legislators knew when they cut the budget, Medicaid would suffer, and doctors and patients would be unhappy.
The situation won’t change until the patients finally rise up, berate their legislators, and the legislators will fix it on a temporary basis, Culotta said.
The cuts exempt services to Medicaid recipients under 16. According to the Medical Society, this leaves general adult care and specialty care services to bear the brunt of the reductions.
Some 87 percent of the physicians responding to an earlier LSMS survey, done in March 2009, were already finding it “difficult” or “almost impossible” to refer patients to physicians for some specialty care services.
Culotta said the problem is already visible in New Orleans, where some orthopedists and other specialists are having to turn down new Medicaid patients.
The Medical Society has found that the Medicaid funding uncertainty is also affecting physicians’ practices. More than 64 percent of the respondents to the March 2009 survey indicated it is difficult to recruit new physicians.
The primary reason was low reimbursement rates, and that was even before the fiscal year 2009-10 Medicaid cuts were announced.
The cuts and their impact are more bad news for a state that already faces a physician shortage, especially in rural areas saddled with large numbers of Medicaid patients. Nearly 30 percent of Louisiana’s residents are enrolled in Medicaid, and payment cuts will discourage physicians from relocating to the state, according to the Medical Society.
Meanwhile, 42 percent of Louisiana’s practicing physicians are more than 50 years old, an age at which statistics show many doctors are considering reducing their patient care activities.
Culotta said that physicians, ultimately, are businessmen.
But no business can sell a product for less than it costs to provide it and remain in business very long, he said.
Physicians’ fixed costs are rising, from the cost of malpractice insurance and unemployment insurance for workers to electricity and salaries, Culotta said. At the same time, the reimbursements to provide medical services are falling.
Doctors can do some incremental cost shifting in the beginning, Culotta said. But at a certain point, with reimbursement cuts to federal programs and private insurers the costs can no longer be transferred.
“Docs will finally realize it one day when they say, ‘Hey, I’ve seen 45 patients today and didn’t make enough money to pay the overhead,’” Culotta said.
The issue has not yet reached critical mass, Culotta said. But at some point Louisiana residents may reconsider their vote to constitutionally protect everything but healthcare and higher education from budget cuts.
The state cuts take place against the backdrop of potentially crippling federal cuts to the Medicaid program. DHH Secretary Alan Levine has been sounding the alarm about the scheduled reduction of federal Medicaid matching funds, the loss of federal disproportionate share hospital funds and the end of federal stimulus money since the last session of the state Legislature.
The state could lose as much as $1.25 billion by the end of 2011, an amount Medical Society members have described as staggering. DHH officials are working with the state’s Congressional delegation to find solutions to the impending crisis.
But if relief is not granted, patients will be in jeopardy of losing services, according to the Medical Society.
Culotta said everyone is waiting to see what happens with national healthcare reform, and that’s one reason Louisiana has not been able to get a waiver to implement its own healthcare reform.
The state has proposed a plan to give Medicaid patients a medical home, with primary care physicians coordinating with specialists on patient care.
The question, Culotta said, is can the state afford to wait any longer?
“I don’t know,” he said. “It really is going to be the good will of the physicians and the tolerance of the patients. And when either of those breaks, the dam’s going to go under.”