Oklahoma physicians see Medicaid pay cut reduced

A budget agreement lowers a planned cut, yet some physicians worry that this will still reduce patient access. Government officials predict possible future cuts.

By Doug Trapp — Posted March 1, 2010

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Physicians in Oklahoma will avoid the 6.75% Medicaid pay cut approved by the state's Medicaid agency, but doctors still face a 3.25% reduction starting April 1.

Oklahoma Gov. Brad Henry and state legislative leaders reached an agreement on Feb. 18 to plug the state's $669 billion fiscal 2010 budget deficit, mostly with a combination of rainy day funds and federal stimulus dollars. The newest spending plan reverses a 3.5% cut approved by the Oklahoma Health Care Authority on Feb. 11.

However, a separate 3.25% Medicaid pay cut the health care authority approved in January will stand, according to Nico Gomez, the authority's deputy CEO. The elimination of one of the reductions reduces the size of the cuts from $10.2 million to about $5 million.

Any Medicaid cut is painful because physician profit margins are low, said Oklahoma State Medical Assn. Executive Director Kenneth King. But the smaller cut, he said, is "probably something at the end of the day we can live with." Oklahoma's Medicaid rates are equal to those of Medicare.

But some physicians warned that even the smaller cut would reduce patient access: More than one in three doctors who responded to a February medical society survey said they would stop seeing all Medicaid patients if the state implemented a 3.25% pay cut.

Gomez said Medicaid pay rates are a priority for the health care authority. Paying physicians at or near Medicare rates is a rarity in state Medicaid programs. Nationally, Medicaid pay averaged 72% of Medicare rates in 2008 for all services, according to an Urban Institute study in the April 2009 Health Affairs.

However, Gomez warned that more cuts could be implemented as part of the budget for fiscal 2011, which begins July 1. "We are not out of the woods in an economic sense."

Henry also said state budget difficulties could continue. "Many tough decisions will have to be made as we attempt to craft a balanced budget that protects core state services in the next fiscal year," he said.

The OSMA survey also asked physicians how a theoretical 10% Medicaid pay cut would affect them. More than two-thirds said they would stop seeing all Medicaid patients.

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Patient access at risk

The 3.25% Medicaid pay cut scheduled to take effect April 1 in Oklahoma will lead most of the state's physicians to stop seeing at least some Medicaid patients, according to recent survey responses from more than 200 doctors.

16.9% would continue to accept new Medicaid patients
45.9% would stop seeing new Medicaid patients
37.2% would stop seeing all Medicaid patients

Source: Oklahoma State Medical Assn. (link)

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