Wisconsin budget crisis threatens physicians' Medicaid pay

Washington -- Wisconsin physicians face stiff reductions in state Medicaid spending if the governor and legislators fail to agree on a state budget soon.

Democratic Wisconsin Gov. Jim Doyle plans to place 20% of the state's Medicaid budget off-limits each month because the Republican-led State Assembly will not approve a corresponding amount -- $363 million -- in cigarette taxes and hospital assessments he asked for in his fiscal 2008-09 biennial budget proposal. The Senate passed a bill reflecting Doyle's budget plan, but the Assembly approved a competing measure. The two bills are now in conference committee.

The frozen Medicaid funding will be released when the state passes a new budget, which was due July 1, stated an Aug. 29 memo from Doyle's Dept. of Administration to the Dept. of Health and Family Services.

Doyle stuck to the plan even though an Aug. 30 letter from the state's Legislative Fiscal Bureau concluded that there are sufficient funds to support Medicaid through March 2009. If no budget is passed, state law provides that funding would continue at current levels until one is.

The 20% freeze has not yet gone into effect. The Dept. of Health and Family Services on Sept. 11 released its plan to implement the decrease. It places heavier reductions on groups the department views as less dependent on Medicaid revenues, such as primary and acute care facilities and health professionals. Funding for all hospital, physician and clinic services would be reduced by 35% starting in January 2008.

In a Sept. 10 letter accompanying the plan, the department's secretary, Kevin R. Hayden, noted that physicians can better absorb the reductions because Medicaid makes up a smaller proportion of their patient mix.

Federally qualified health centers and rural health clinics would be exempt, because federal law requires cost-based reimbursement for them, Hayden wrote.

Federally required Medicare cost-sharing expenditures also would be exempt, he added.

The plan will be reviewed by the Dept. of Administration for several weeks to determine its feasibility, said its secretary, Michael L. Morgan.

One in every seven Wisconsin residents is eligible for Medicaid, said Wisconsin Medical Society President Clarence Chou, MD. Lower reimbursements would force physicians to curtail the number of new patients they see, he said.

"Our concern is if the cuts go into effect, it will affect physician practices pretty quickly," he said. "It is hard for us to deal with this uncertainty. I hope the budget impasse is lifted [so we can] maintain access to the care of our patients."

The cuts would impact patient care in Milwaukee, said Medical Society of Milwaukee County Executive Vice President Bruce Kruger. "We have a major crisis on the horizon."

Access to primary and specialty care -- already limited for Medicaid patients in the county -- would decline significantly, he explained. As a result, more Medicaid care would be delivered through area emergency departments, stressing an already taxed system, Kruger said.

Medicaid cuts also will hurt efforts to curb Milwaukee County's high teen pregnancy and infant mortality rates, Kruger added. Pregnant teens often do not see a physician until four or five months after becoming pregnant, he explained. A 20% freeze would only make the situation worse, he said.

Access to childhood immunization would suffer, Kruger added. Vaccination rates in the county are in the low- to mid-40% range, compared with low 90s for the state. The cuts also could reduce graduate medical education funding at the Medical College of Wisconsin in Milwaukee, which provides a significant amount of free and Medicaid care, he said. Reduced funding would strain the county's mental health system, which is breaking down, he added.

A 20% reduction probably would cost more than it saves because Medicaid patients would be forced to go to the emergency department for routine care, said John Whitcomb, MD, an emergency physician at Milwaukee's Aurora-Sinai Medical Center. For example, asthma patients with no regular doctor typically go to EDs five times a year at a total cost of $10,000, he said. Treating asthma through a primary care physician costs $1,000 a year. "Do the math," he said. "That basically happens at every level."