Kansas cuts Medicaid physician pay by 10%

Kansas' fourth round of budget cuts in 2009 included a 10% cut to Medicaid pay for physicians, hospitals and others caring for Medicaid enrollees.

The $22 million cut means Medicaid pay for physicians was reduced starting Jan. 1, according to Kansas Medical Society Executive Director Jerry Slaughter. Before the reduction, Medicaid paid about 80% of Medicare rates in the state.

The Medicaid cut is part of $260 million in statewide reductions Kansas Gov. Mark Parkinson ordered on Nov. 23, 2009. It's also Parkinson's second round of administrative budget cuts in 2009 to account for lower-than-expected state revenues, and the fourth round of budget cuts for the year, according to Peter Hancock, spokesman for the Kansas Health Policy Authority, which runs the state's Medicaid program.

"The governor was really trying to spare social services and safety net services. And then there was this round [of cuts]. This just really started cutting into the bone," Hancock said.

About 90% of physicians participate in the Kansas Medicaid program, Slaughter said. "Chances are that they'll stay in the program, but they'll just restrict the number of Medicaid patients they will accept."

In December, Parkinson also ordered the state Medicaid agency to reduce its administrative budget by $1.1 million, which is about 5% of total spending on administration, Hancock said. The agency decided to end a contract with a call center that fields physician questions about Medicaid claims and eligibility. The authority also is drastically cutting back two other call centers that answer questions from Medicaid enrollees.

Hancock said the health authority is working on a Web-based system to answer e-mail questions from physicians. "We really haven't gotten all the way through that. It's going to be difficult," he said. The physician call center will end operations in February, he said.

"Our message to [physicians] is just we're really trying to work with them and implore them to stay with us," Hancock said. He noted that the $260 million in cuts are spread throughout state government. The Kansas National Guard, for example, is shutting down 18 of its 56 armories in early 2010.

Parkinson warned in a statement that the state can't continue to survive the recession by cutting state services. "When the Legislature returns in January, together we must look towards building a solution for the years ahead or we will permanently damage the foundation of our state."

About a third of the 1,000 members of the Medical Society of Sedgwick County -- headquartered in Wichita -- see Medicaid patients, according to Ron C. Brown, MD, the society's president. "What this does [to physician participation], it's hard to say," Dr. Brown said. "There may be an access problem."

Hancock said the Centers for Medicare & Medicaid Services must approve the 10% cut to Medicaid managed care rates. CMS spokeswoman Mary Kahn said in December that CMS had not received the Kansas plan amendment. Therefore, she said she couldn't estimate the likelihood or potential timing of approval.