Medicaid Oversight Committee

I had the opportunity to present testimony to the Select Joint Commission on Medicaid Oversight on Tuesday at the statehouse in Indianapolis.

Overall the meeting was very good and I believe very informative to the Senators and Representatives serving on the committee.

There were about a dozen other physicians and office representatives who also presented testimony from the entire state of Indiana. It was noted that Indiana is ranked about 47th in the nation for Medicaid reimbursement and the rates have not increased since 1989.

Everyone is having similar problems and very concerned about the proposed changes that they are wanting by January 2007.

Below is the address that I gave to the committee.

Chairman Brown and committee members,

I, along with my colleagues appreciate the opportunity to address the committee.

Primary Care Physicians and especially Pediatricians are facing the worst year of their professional careers and patients are facing increased difficulty accessing care.

Physicians understand the financial difficulties the State faces in meeting budgetary requirements while continuing to provide medical services to the Medicaid population. We also know all too well how continued declines in reimbursements have impacted our own practices and our ability to provide care to this population of patients. For some of us, Medicaid represents 30-50 percent of our patient base while utilizing 50-70 percent of our time and resources. Your committee understands that this group of patients are high utilizers and many with little understanding of how to manage their problems.

Some of us here have already dropped the managed care Medicaid program and if the proposed changes take effect in January, more physicians will be forced to drop out of the program. It boils down to simple accounting. We have to maintain more income coming in then expenses going out. Just yesterday a colleague gave me a copy of a notice Medicaid sent him regarding charging for missed appts and medical records. The wording stated they felt like it was part of the overall cost of doing business and the Medicaid rate already covers the cost of doing business. We strongly disagree with this statement and overall assumption since Medicaid rates have not increased since 1989.

The Medicaid program is broke. Any changes that further cuts reimbursements to physicians or any changes that increase the already overburdened red tape with the program will create further access problems for patients, force more physicians to drop out of the program and will lead to even more inappropriate use of Emergency Rooms and UCC’s. This is short-sighted thinking that will cost the State more money.

Medicaid has always been the lowest payor and their rates have neither increased nor kept up with inflation. Medicaid has created a huge burden on our practices because of the paperwork and other administrative hassles. The MCO’s that took over 2 years ago created even more burdens and it has taken us this long just to figure out a working relationship in order to survive.

Some of the problems we have already faced include:
• Patients are switched from provider and plans sometimes without knowledge and sometimes without reason. This causes problems especially with OB physicians because changing plans causes payments to be withheld, delayed or just denied because each plan states the other should be paying.

• Some MCO’s have dropped (kicked out) physicians who have high utilizing patients forcing them to accept one of the other MCO’s. This allowed the MCO to get rid of these high utilizing patients because the patients would follow the Doctor and therefore change to the other plan.

• All the MCO’s have been characterized by consistently holding, delaying or simply denying payments. If you want to complain, the Office of Medicaid oversight is very complicated. Physicians feel there is rarely a successful resolution using this agency. Filing a complaint with the Office of Medicaid oversight about the MCO requires filing every claim that is not paid individually meaning the physician would have to literally send hundreds of individual complaint forms for the same problem related to the same MCO. This burden is overwhelming when you are just trying to recoup what is owed from the lowest paying third party. It actually ends up costing you money when staff time is factored in.

• Each of the MCO’s has their own formularies and many drugs aren’t covered. If a patient has been stable on a drug for years but it isn’t on the formulary, you have to fill out additional paperwork, make phone calls and faxes to maybe get it approved. Otherwise, you have to change the medication and risk complications causing more visits and increased costs. Some of the MCO’s won’t cover certain generic drugs. I have had drugs denied and after talking to the MCO, they said if I referred the patient to a specialist and if they ordered it, they would approve it. This adds an additional cost and delays treatment.

• One Physician was owed money and the MCO asked if they would take a settlement for what they owed. Why should a physician reduce the amount they owe because of the MCO’s inefficiencies? Physicians already agreed to their fee schedule which is lower than any other. Settling for an even lesser amount was ridiculous. The MCO should be paying interest on the money they owe.

• The last issue concerns the ER. Trying to use primary care doctors as gatekeepers will not work because even if a primary care doctor tells the ER registration that we won’t authorize the visit because it doesn’t seem to be an emergency, the ER physicians are required through federal guidelines to see the patient. This means the primary care doctor is denying payment to the ER physician. The ER physician has no choice but to evaluate them. State and Federal rules need to be reconciled so this doesn’t occur.

• The States have to begin requiring personal responsibility to all of the Medicaid recipients. This can no longer be a free ride to them.

I represent southern Indiana where more than 90 percent of the patients belong to Molina or Harmony, neither of which were awarded the contract for 2007.

We know that in order to switch MCO’s this late in the year will be virtually impossible. It normally takes 3 months to become credentialed with a new organization and that is if everything is perfect. It has not happened with any Medicaid program. Physicians will not sign up with all 3 MCO’s because of the added burden, red tape and need to learn new formularies. This will mean that patients will want to see which MCO their doctor takes before they decide. Trying to get every patient and every physician in the program by January is neither practical nor wise. Patients will be left out in the cold not knowing where to go or who to see. They will end up in the ER and UCC.

The last issue is financial. We currently receive about 130% of the Medicaid fee schedule with Harmony and Molina. The best that the new ones offer is 105%. So we will automatically be taking a 25% reduction in pay all while trying to learn how to get through the red tape of the new MCO. Cash flow will be disrupted as always occurs with a new third party payor and some offices will not be able to meet their payrolls.

We implore this committee to re-think the current proposed changes and take some more time to implement processes to eliminate the known problems.

If more than one MCO is being used, the State needs to require a common formulary, along with common rules for payments. There needs to be an easy way to file a complaint and get a resolution. Patients have to bear some financial responsibility for keeping appointments and overutilizing the system. Most physicians will not accept all the programs and therefore having patients choose the MCO will create more problems.

We strongly believe the current proposed changes will create more problems and become more costly for the State. Please don’t make a bad situation worse.