With pressure mounting to plug a $1.7 billion chasm in the state budget, healthcare providers worry that legislators will again choose to solve the problem by cutting Medicaid reimbursements.
Gov. Bobby Jindal’s proposed budget would cut $300 million from Louisiana’s Medicaid program for the poor, elderly and disabled. The reductions will come from payment cuts to hospitals, nursing homes and other health providers. The Jindal administration says the reductions are being forced by the loss of hundreds of millions in Disproportionate Share Hospital funding, a flawed Federal Medical Assistance Percentages formula, and lower state revenue.
“If there’s one thing that’s going to dominate this session, whether it’s medicine or anything else, it’s budget,” said Dr. Van Culotta, who chairs the Louisiana State Medical Society’s Council on Legislation. “We are understandably concerned that further decrease in the Medicaid reimbursement, while it may save some money in the short run, will decrease access to care for the people who need it the most.”
Culotta said doctors cannot provide care for less than it costs them to do so, and at some point physicians are going to stop providing that care.
A study in the Journal of the American Medical Association found that physicians worked about 51 hours per week in 2008, compared to roughly 55 in 1996. The study said that was the equivalent of losing 36,000 doctors.
Culotta said the cause is simply lower reimbursements.
The study found that over the same period, doctors’ pay fell 25 percent when adjusted for inflation.
Although the Jindal administration and legislators have not been receptive in the past, the LSMS will continue to try and get out the message: if Medicaid reimbursements cuts continue, the very people the legislators represent will have no access to care.
“We hope we can (make this point), and we hope they listen, and we hope they will do what they can to restore those cuts and prevent those cuts from getting worse,” Culotta said.
During former Gov. Buddy Roemer’s administration, reimbursements were slashed for pediatric and obstetric services, Culotta said. Eventually, physicians stopped providing those services in certain areas of the state.
“And when constituents started calling up, they (legislators) changed the rules,” Culotta said. “So it’s going to take a little of both. It’s going to take some honest, forthright discussion, and I think it’s going to take some people not being able to get care before things will change.”
Culotta said everybody wants to avoid cutting Medicaid, but many legislators don’t know where the money is buried in the budget to prevent those cuts.
The proposed reimbursement cuts are just one of the many legislative issues LSMS is tracking, Culotta said. The State Medical Society is supporting, opposing, or monitoring close to 300 bills.
Some of the most important include:
■ HB 175, authored by Rep. John Bel Edwards, D-Amite, would amend the medical malpractice law. Among other things, the proposed law would increase the cap from the current $500,000 to $750,000. Providers would be responsible for the first $150,000 in damages, $50,000 more than the current law. The limits would be tied to the Consumer Price Index. The proposed law would allow malpractice victims to sue for economic losses, including lost income and future earnings.
Edwards has argued that the state’s malpractice cap has not been adjusted in more than 30 years, and that if adjusted for inflation, the cap would be around $2 million.
Culotta said LSMS will oppose the bill.
In the latest edition of its newsletter, Lousiana Medical Mutual Insurance Co. president and chief executive officer Dr. Thomas Grimstad says, any change to the medical malpractice system must not increase the overall cost of malpractice coverage to policyholders.
■ SB 514, SB 586 and HB 394, which change the regulation of the Louisiana Patient’s Compensation Fund. Insurance Commissioner Jim Donelon and the PCF board of directors are arguing over the $400 million the fund owes and will owe in claims over and above the money it has and will take in at current rates.
Donelon would like the unfunded liability retired by 2016.
The PCF wants to remove itself from Donelon’s regulation because the fund is not an insurance company.
Culotta said the Medical Society hopes to reach a compromise with Donelon, although whether that is possible remains to be seen.
The Legislature may also consider so-called balanced bill legislation. There are several of these bills, Culotta said. One version would require hospitals in a health network to make sure policyholders of that network get care from physicians in the same network.
Donelon has said patients are now vulnerable to much higher, out-of-network fees from radiologists, anesthesiologists and pathologists who typically aren’t under contract with health insurers, even when the patients choose an in-network facility.
Previous legislative efforts have failed.
Culotta said the proposed law could hurt the care of people in rural areas.
If doctors in those areas cannot charge what it costs to provide the service to the hospital, the doctors won’t be able to stay in business, Culotta said.
“We’re working with the commissioner to perhaps come up with some compromise legislation so we can keep people in practice, because that’s the goal,” Culotta said.