Low pay hurts Medicaid access to specialists

Doctors are dropping Medicaid or cutting the number of program enrollees they'll see.

By Joel B. Finkelstein — Posted July 26, 2004

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Washington -- For Bruce Weinraub, MD, the first hint of referral trouble for his Medicaid patients started with dermatologists a couple of years ago.

"I have one patient with a malignant melanoma who was not able to get follow-up," said the internist from Northampton, Mass.

Next it was dentists and oral surgeons in the area who stopped seeing Medicaid patients. Now a local group of urologists has begun turning away his Medicaid referrals.

"The way I found out about it was a patient calling me and telling me: 'They won't see me.'... It was a bit of a shock."

The difficulties Dr. Weinraub and his patients are facing are symptoms of a growing Medicaid problem -- the program's low pay is driving many specialists away.

Medicaid reimbursement has always been low, if not below the cost of providing services. Advocacy and sometimes lawsuits by local physician groups seem to have sensitized state governments to the effects on access when rates drop too low.

But efforts by state legislatures and health departments to buoy physician reimbursement have consistently focused on primary care, while specialists' fees often have continued to stagnate, according to an analysis of data from 1998 to 2003 that was published in June by the policy journal Health Affairs.

"Overall, there was a 27% increase across all services, but it was 41% for primary care, 10% for obstetric care and 11% for other services. ... That's lower than inflation," said co-author Peter Cunningham, senior health researcher at the Center for Studying Health System Change.

Some increases seen in the study reflect a period when state revenue was rising in the 1990s. More recently, states have begun to see budget shortfalls that have meant rate cuts.

Surveys in the past few years show that low Medicaid reimbursement is leading to decreases in doctors' participation across the board, but the problem could be more acute for specialists. "You can't make a living on $7 for an office visit and $50 for an endoscopy," said Michael Kressner, MD, a gastroenterologist in New Rochelle, N.Y. Those reimbursement rates haven't changed in 22 years.

Like an increasing number of specialists fed up with the program, Dr. Kressner will see Medicaid patients only for emergencies, although he still accepts referrals from primary care physicians he knows.

State health agencies are aware of the problem but have been focused on improving access to primary care first and foremost, said David Parrella, head of Connecticut Medicaid and immediate past chair of the National Assn. of State Medicaid Directors.

"We were trying to tackle some of the real basic problems with low immunization rates and high inpatient days, particularly in the NICU, by getting better preventive care out there," he said. "And we really did focus on that, and now maybe we haven't paid enough attention to some of the specialty issues."

But states might have to take notice as physicians gain more leverage in negotiating their fees.

Physicians "are becoming more sophisticated and are being pretty tough in these negotiations. The subspecialties are one place where you're really seeing it," Parrella said.

Primary care doctors taking notice

For now, though, the payment problem continues to hurt primary care physicians' ability to get referrals for their patients.

Brian Bachelder, MD, of Bachelder Family Practice in Mount Gilead, Ohio, faced the issue when he discovered that none of the rheumatologists in his or surrounding counties would accept his Medicaid referrals.

"We started calling Columbus, a huge population center, and it took about five phone calls down there before we found one rheumatologist who would take this patient, and even then it was a two-month delay before they could be seen," he said.

At best, Medicaid patients are waiting longer and traveling farther to see specialists. But what is more likely is that many patients are simply not receiving care for non-urgent conditions, said Andrew Mackey, MD, medical director for Cooley-Dickinson, Northampton, Mass.' physician-hospital organization.

Specialist dropout also seems to be having a snowball effect. When one specialist stops accepting Medicaid, specialists still serving those patients face increased financial pressure. This comes when physicians are already seeing reimbursement decreases from private insurance.

Dr. Bachelder has found out that the rheumatologist in Columbus still accepting Medicaid patients is considering getting out of the program because he is being inundated.

The problem is beginning to be felt beyond Medicaid. As specialists in a community leave the program, Medicaid patients end up relying on the local hospital system for specialty care. To balance their budgets, hospitals in turn offer lower salaries to specialists and subspecialists.

"[Children's hospitals are] having a hard time attracting pediatric subspecialists because the salary is lower here in New York than it would be somewhere else," said Thomas McInerny, MD, a pediatrician in Rochester.

While low reimbursement is an obstacle, bureaucratic micromanagement could be the real deal breaker.

Brian Jumper, MD, a urologist in Portland, Maine, was content to provide what amounted to more than $100,000 a year in uncompensated care to Medicaid patients.

That was until the state hired an audit firm that assessed him $6,000 in overcharges for billing Medicaid average wholesale prices for pharmaceuticals the practice had purchased in bulk. After the federal government stakes its claim and the audit firm gets its cut, the state will probably get a few hundred dollars of that, he said.

"It was such a slap in the face," he said. "I'm sorry, but I can't take it anymore."

Some of his primary care colleagues were upset with his decision to leave Medicaid, Dr. Jumper said, and he knows the move put them in a bad position. But in the end, they understand why he did it.

"I can say 'no.' It is the only leverage I have at this point."

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External links

"Changes In Medicaid Physician Fees, 1998-2003: Implications For Physician Participation," abstract, Health Affairs, June 23 (link)

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