Florida reversal on Medicaid expansion raises doctor pay questions

Florida Gov. Rick Scott’s decision to comply with the Affordable Care Act and expand Medicaid starting in 2014 has drawn support from state health care professionals, but they said it remains to be seen how adequately physicians will be paid to care for the new wave of covered low-income patients.

At one point, the state was the hotbed of dissent against the ACA, spearheading a multistate lawsuit that challenged the law’s constitutionality. As one of the statute’s more vocal opponents among states’ chief executives, Scott was particularly dismissive of Medicaid expansion, calling it a new entitlement that would cost state taxpayers an extra $2 billion. Nevertheless, on Feb. 20, Scott joined the growing ranks of Republican governors who have changed their minds about this ACA provision, announcing that he would expand Medicaid in 2014 — at least temporarily.

States that expand Medicaid up to an effective rate of 138% of poverty under the ACA receive an enhanced federal matching rate of 100% to pay for the additional coverage for the first three years of the expansion starting in 2014. States take on a relatively small percentage of the expansion costs thereafter.

Scott said he would support expansion for the three years in which the federal government honors its commitment to provide full assistance for new Medicaid-eligibles. “Three years is a reasonable period to judge just how well the expansion is working and to explore further reforms to improve cost, quality and access in health care” in both the public and private markets, he said in prepared remarks. After this period, Florida’s expansion would sunset and need to be reauthorized.

The governor’s plan “was a very positive start,” said Bruce Rueben, president of the Florida Hospital Assn. Hospitals in the state are expected to contribute $10.7 billion over 10 years in the form of decreased federal payments to help fund increased coverage through the ACA. “There are other ways Floridians will pay for increased coverage as well, so it makes sense for Florida to get some of that coverage, since we’re going to pay for it” whether the state expands Medicaid or not, he said.

Scott’s decision will provide hospitals with an opportunity to treat people in a more cost-effective way, Rueben said. “When people don’t have insurance, they tend to wait until they’re really sick, and sometimes they end up in emergency rooms and it’s late in their episode of illness. It’s expensive to treat people in the emergency rooms. And they don’t have much access to follow-up care.”

Rueben said the state Legislature still has to act on the Scott proposal to make it official. “This is not the end of the conversation,” he said.

How much will Florida pay doctors?

Family physicians also are encouraged that more people will be covered under the governor’s proposal, said Bob Raspa, MD, president of the Florida Academy of Family Physicians. As a family doctor who accepts Medicaid patients, Dr. Raspa said expansion undoubtedly would increase the pool of insured people who would be able to come to his office to seek care.

But as the state continues to grow its Medicaid managed care base, questions about adequacy of pay remain. The Centers for Medicare & Medicaid Services recently agreed in principle to allow Scott to privatize Medicaid in Florida. As a result, “there’s very little full-fledged Medicaid in the state” right now, Dr. Raspa said.

Medicaid HMOs are a way to manage this population less expensively, yet these plans also pay physicians less than fee-for-service Medicaid. “A lot of practices have very [few] appointment slots for Medicaid patients because they just can’t afford them. Some practices would rather do the self-pay and write it off, because there’s less hassle” in this approach, Dr. Raspa said.

An ACA provision to boost Medicaid primary care pay rates to Medicare levels for primary care doctors went into effect in January. In Florida, such doctors are expected to see average pay increases of 105%, according to a recent report by the Urban Institute that was conducted on behalf of the Kaiser Commission on Medicaid and the Uninsured. Although it’s unclear how much of an increase physicians would see for treating Medicaid HMO patients, bumping their pay to Medicare rates has the potential to increase access, Dr. Raspa said.

If the governor’s proposal to expand Medicaid ends up being an experiment under which the expanded coverage suddenly disappears after three years, the concern for doctors is that “we’d have to find something to do to provide care for people who were dropped,” Dr. Raspa said.

Scott emphasized that his intent wasn’t to deny new Medicaid beneficiaries coverage several years from now. The plan is to “evaluate whether services are best provided through the Medicaid program, if the program needs more flexibility or if some services are better provided in the private market,” he said.

Approaches mixed in GOP-led states

At least one Republican governor has taken steps to expand Medicaid on his own terms. Wisconsin Gov. Scott Walker recently floated a plan to expand the program just to adults up to 100% of poverty.

The proposal assumes that those above the poverty line would be able to obtain coverage on the state’s health insurance exchange with the assistance of federal subsidies — actually resulting in a net decrease in those covered by the state’s Medicaid program.

Other governors have yet to be convinced that any expansion is the path the states should take. In a Feb. 20 letter to state lawmakers, Virginia Gov. Robert McDonnell said the state would not be able to support financially an expansion of Medicaid.

Echoing the sentiments of other Republican governors who have rejected expansion, McDonnell wrote that adding more people to Medicaid’s rolls would be a mistake at a time when the program’s costs were becoming unsustainable.

“Please understand that I cannot and will not support consideration of an expansion of Medicaid in Virginia until major reforms are authorized and completed, and until we receive guarantees that the federal government’s promises to the states can be kept without increasing the immoral national debt,” his letter stated.