Medicaid patient access at stake in high court case

In 1989 -- long before the current state and federal budgetary crises -- Congress recognized that insufficient pay for physicians would result in Medicaid failing to fulfill its legal mandate to provide access to care for the poorest of Americans.

At that time, Congress wrote into law an "equal access" provision of the Medicaid Act, requiring payment levels that provide access to care for recipients at par with the general population. In doing so, lawmakers addressed concerns that had been raised for years about Medicaid rates falling behind Medicare and private insurance payments, making it untenable for physicians to take on Medicaid patients.

Since then, the payment situation has gotten worse. Medicaid fees fell in real terms from 2003 to 2008, according to research by the Urban Institute, in partnership with the Kaiser Family Foundation's Commission on Medicaid and the Uninsured and the California HealthCare Foundation. In 2008, Medicaid fees, as an overall percentage of Medicare, were only 72%.

As state budgets grow tighter, Medicaid access is being threatened more than ever. States, which administer the federal program, are looking more closely at cutting physician fees as a means of slashing their Medicaid budgets. California went so far in 2008 as to institute a 10% cut in its program, Medi-Cal, which at the time paid 83% of Medicare.

That cut sparked a lawsuit, Douglas v. Independent Living Center of Southern California, and that case is now in front of the U.S. Supreme Court. The justices could rule as early as December on this question: Do doctors and Medicaid recipients have standing to sue the state for failing to pay rates as required under the equal access provision of the Medicaid law?

The answer should be yes. If the high court agrees, every time a state considers an arbitrary Medicaid pay cut, they'll think twice before actually going through with it.

Congress has long expected that the courts would be used as a tool to enforce the Medicaid Act, points out a friend-of-the-court brief filed by the American Medical Association and five other dental and medical associations. The brief was filed at the request of the California Medical Assn., which has supported the case. (The Litigation Center of the American Medical Association and the State Medical Societies is providing financial support for the case as well.)

The Centers for Medicare & Medicaid Services' primary means of enforcing equal access is the revocation of funds for an offending state. That's something the brief rightly calls a "limited, and Draconian, enforcement" that is "severe and would cause further harm."

"Thus, without judicial remedies, this crisis will remain and likely worsen," the brief contends.

California already has a second 10% Medi-Cal cut ready to be released if the Supreme Court rules the state's way. But California is hardly the only state cutting Medicaid physician pay, as states wrestle to deal with rising enrollment and decreasing revenue.

For fiscal 2012, 18 states cut physician or hospital Medicaid pay. That is on top of 20 states making such cuts in fiscal 2010, and 11 states and the District of Columbia doing so in fiscal 2011.

These cuts will exacerbate Medicaid's already troubling access problems. For example, a 2011 U.S. Government Accountability Office report cited by the friend-of-the-court brief found that 34% of physicians "experience 'great difficulty' in referring Medicaid and [Children's Health Insurance Program] children, while only 1% of physicians experience such difficulty in referring privately insured children." That same report said that for physicians who choose not to participate in Medicaid, 95% are influenced by low payment rates.

The whole point of an insurance program is that it provides actual treatment when it's needed -- not a whittled-down payment that jeopardizes access to care. Medicaid must receive sufficient funding to enable the program to serve as the social safety net that it was intended to be. State officials should ensure that and be held accountable when they don't. Medicaid recipients and the doctors who treat them -- those most affected by cuts -- deserve to have their day in court to keep the system honest.