HHS offers physicians funds for Katrina care

A new government report shows that New Orleans' health care community is still devastated, and questions about the future are hindering rebuilding.

By Elaine Monaghan — Posted April 17, 2006

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Washington -- Physicians who treated uninsured victims of Hurricane Katrina are eligible to receive a slice of a $1.5 billion pie in this year's federal budget.

The funds will deliver a small shot in the arm to New Orleans, whose health care infrastructure remains severely damaged and where there is staff for only one-fifth of pre-Katrina acute care beds.

Most of the funds will go to state Medicaid programs, but some is to be set aside for uncompensated claims by doctors in states that took in the most evacuees.

The Centers for Medicare & Medicaid Services told AMNews that arrangements had been worked out with states that had asked for help compensating doctors: Alabama, Arkansas, Georgia, Louisiana, Mississippi, South Carolina, Tennessee and Texas. The doctors should contact state Medicaid agencies about recouping losses, a CMS spokeswoman said. The funds cover patients who were ineligible for Medicaid and had no other insurance.

"Every little bit counts," said Yarnell Beatty, director of legal and governmental affairs at the Tennessee Medical Assn. "If they can get back money they didn't expect, that's a little gravy."

In Tennessee, 29 practices treated 817 evacuees without being paid, at a collective loss of $338,129, he said. The association was determining whether all or some of this would be covered.

One physician in Kingsport provided $4,160 in uncompensated care. But one clinic stood to recoup six-figure amounts, Beatty said.

The deadline to apply for compensation for care between Aug. 24, 2005, and Jan. 31, 2006, is June 30. In Louisiana, an extension is being worked on.

A CMS spokeswoman did not have a state-by-state breakdown of figures. But Louisiana announced that $383 million was available.

"This extra money will help pay our hospitals, our doctors and our other medical professionals who were there when needed most," said Gov. Kathleen Babineaux Blanco.

The cash is part of a $1.5 billion pot HHS is distributing among the 32 states that received special permission to enroll evacuees on an emergency basis in local Medicaid programs. That effort did not cover patients ineligible for Medicaid in their home states after the storm.

Doctors will be compensated for "medically necessary" treatment to evacuees who were not eligible for Medicaid but had no other source of payment. Treatment given as part of an official relief effort is excluded.

The Alabama Medicaid Agency released a letter on its Web site from CMS saying Medicaid had to be the "payer of last resort." Audits would be performed to check for fraud or duplicate claims.

Physicians would have to attest to the recipient's lack of other coverage and the necessity of treatment.

Still a grim situation

The relief will be welcome in New Orleans, where the two Medical Center of Louisiana at New Orleans hospitals -- Charity and University -- that had treated the bulk of the city's uninsured, remain closed, placing a burden on private hospitals. "These facilities have responded, and we are committed to finding a way to at least partly reimburse them for the services they provide through the end of this fiscal year," said Fred Cerise, MD, the state's health secretary.

But for some, the relief is a drop in the ocean. Floyd Buras, MD, whose pediatric practice was wrecked by Katrina, needs $1.1 million to rebuild but has only a $180,000 small business administration loan.

"We are still floating in the wind," he said.

Dr Buras, president of the Louisiana State Medical Society, said most of the patients he had seen for free -- mainly newborns -- had been eligible for Medicaid, so the cash would not affect him much.

"The elephant in the room that no one is talking about is that this disaster was of such a scope that even the federal government can't afford to fix it," he said.

A Government Accountability Office report released last month, based on interviews and visits between December 2005 and February 2006, painted a grim picture of the state of New Orleans' health care.

The area's sole Level I trauma unit, run by the Medical Center of Louisiana, remains closed. The number of staffed hospital beds has dropped 80%. Many safety-net clinics are not operating, and little information is available about the status of physicians and other health care professionals.

Uncertainty about the future size of the city's population is slowing planning efforts to rebuild. A 2000 Census put the population at 484,674, but by December 2005 it was estimated at 156,900.

The GAO said a decision to repair Charity and University hospitals "could have significant implications for health care service delivery in post-Katrina New Orleans and for statewide training and Level I trauma care."

But with uncertainty about funding, "proceeding with federal funding for repairs may be wasting tens of millions of dollars," the GAO stated.

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Disaster remains

New Orleans' health care infrastructure remains severely damaged months after Hurricane Katrina. Acute care hospital beds are in short supply in the city. Nearby parishes are faring better.

Pre-Katrina staffed beds Post-Katrina staffed beds
Orleans parish 2,269 456
Jefferson and St. Bernard parishes 1,814 1,528

Note: Post-Katrina figure as of Feb. 22 Source: Government Accountability Office

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