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Change In Total
Medicaid Spending And Enrollment, 1998-2011
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Source: Kaiser Commission on Medicaid and the Uninsured using CMS and
KCMU data
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Medicaid News
States Cutting Medicaid Benefits As They Stagger
Under Economic Downturn
Editors Note: Enrollment in the state-federal
program that is often the last resort safety net for chronically ill
senior citizens rose by 8.5 percent in fiscal year 2010
By
Phil Galewitz, KHN Staff Writer
 Oct. 4, 2010 - In Arizona, about 640,000 adult
Medicaid recipients will lose coverage tomorrow for podiatry care,
insulin pumps and most dental services. In Washington, D.C., in
November, doctors who treat 250,000 Medicaid patients are scheduled to
see their fees cut 20 percent.
These are some of the newest cutbacks in Medicaid
as states grapple with surging enrollment - and spending - in the
government health insurance program for the poor that covers nearly 49
million Americans.
Driven by the economic downturn, enrollment in the
state-federal program rose by 8.5 percent in fiscal year 2010, which for
most states ended in June, according to study released today by the
Kaiser Family Foundation's Commission on Medicaid and the Uninsured.
State spending on Medicaid jumped an average of 8.8 percent in 2010, the
biggest increase in eight years and the second biggest jump in two
decades, the study found. The growing costs for Medicaid come as the
faltering economy has
stripped state tax revenues.
The 2009 economic stimulus, which provided an
additional $87 billion in federal funding for Medicaid, prohibited
states from tightening eligibility requirements. To save money, many
states trimmed or eliminated so-called "optional" benefits -- such as
vision and dental services -- and reduced reimbursements for doctors,
hospitals and other medical providers.
The study, based on a survey of Medicaid officials
in all 50 states, found 20 states reduced or restricted benefits in
2010. That's twice the number of states as in 2009 and the highest
number since the survey started in 2001.
Thirty-nine states cut or froze
reimbursements for doctors and hospitals, up from 33 states in 2009. The
efforts are continuing; 14 states have plans to cut benefits and 37 to
restrict fees in 2011. Yet despite the fiscal concerns, this year, 41
states made it easier to enroll or stay enrolled in Medicaid and a few
states, such as Colorado and Wisconsin, are expanding eligibility.
(See table below news story that shows actions by
state.)
"The report shows the continued depth of the
struggle to provide care during the deep recession," said Diane Rowland,
executive vice president of the Kaiser Family Foundation and executive
director of the Kaiser Commission on Medicaid and the Uninsured. (KHN is
a program of the foundation.)
Peter Cunningham, a senior fellow at the Center for
Studying Health System Change, a Washington think tank, said the
cutbacks are driving down doctor participation. "There is no doubt that
lowering rates to providers is going to affect the percent of doctors
who accept Medicaid patients," he said. He added, however, providers'
decisions about accepting Medicaid is also based on other factors,
including whether they are paid in a timely manner and how much
paperwork the program requires.
Rowland said that losing providers now will make it
more difficult to attract doctors to care for the estimated 16 million
additional beneficiaries that will be added when the program is expanded
in 2014 under the health overhaul law. "Any erosion in Medicaid coverage
now makes the hill steeper to climb in 2014," she said.
'Penny Wise and Pound Foolish'
Advocates for Medicaid recipients say they
understand why states are cutting spending, but they argue that the
moves eventually will lead to higher costs because people won't get
preventive care or be able to avoid health complications.
"It's penny wise and pound foolish," Eddie Sissons,
executive director of the Arizona Foundation for Behavioral Health, said
of the state's plan eliminate numerous benefits for adults on Medicaid.
She said Arizona's decision to stop paying for diabetics to get their
feet checked by a podiatrist or be eligible for an insulin pump could
cause patients to suffer needlessly from complications.
Officials in Arizona, one of the hardest hit states
in the economic downturn, say they had no choice as they addressed a
more than $2 billion shortfall in the state budget. "Arizona has been
facing an unprecedented fiscal crisis for the past couple of years,"
said Jennifer Carusetta, chief legislative liaison for the Arizona
Medicaid program, which cut $20 million of $9 billion budget. "This has
placed the state in a position where there are only these types of
difficult choices to be made."
Nationally, Medicaid pays about 25 percent less to
doctors than Medicare does, according to a 2008
study in Health Affairs.
Washington, D.C., and 10 states pay Medicaid
providers the same fees that they get from Medicare. But faced with a
budget shortfall, the District has asked the federal government to
approve its plan to lower fees. They expect to begin the new fee
schedule Nov. 1.
"When we drop rates, we always worry that we lose
providers," said Julie Hudman, director of the D.C. Department of Health
Care Finance, which oversees the Medicaid program.
Doctors say thats just what will happen.
"I think its a terrible idea," Dr. Peter Lavine,
president of the D.C. Medical Society, said of the rate cuts. Lavine, an
orthopedic surgeon, predicts the cuts could trigger many doctors to stop
treating Medicaid patients and that hospitals serving large numbers of
low income patients will suffer. "The premise of saving money or
balancing the budget by sacrificing health care does not make much sense
and is very short sighted."
The District's broad Medicaid eligibility rules --
it covers anyone earning below 200 percent of the federal poverty level
($44,100 for a family of four) -- is a key reason that just 6 percent of
the District's residents are uninsured, the second lowest percentage in
the nation.
Hudman said she resisted cutting any optional
benefits because it would not have produced substantial savings.
'It's Just Mind Boggling'
In Louisiana, officials have cut hospital Medicaid
fees by nearly 20 percent in the past 18 months.
"It's just mind boggling," said John Matissino,
president and CEO of the Louisiana Hospital Association. He noted rates
are now at 1994 levels. He said the rate cuts are causing hospitals to
reduce services and staff. With predictions that 42 percent of state
residents will be eligible for Medicaid after 2014, the hospital
industry is worried how it will handle the influx. "It will be a
horrible situation," Matissino said.
While the trims this year to Medicaid recipients
and providers are not new, they become more difficult because they come
on top of earlier cutbacks, said January Angeles, a policy analyst for
the Center on Budget and Policy Priorities, a Washington research
organization that researches policy and programs affecting low and
moderate income people. She said the lower payment levels will make it
harder for states to increase numbers of providers for the 2014
expansion.
To find cost savings and improve care, state
Medicaid programs continue to turn to managed care companies, HMOs. In
2010, 13 states expanded managed care or mandated enrollment. In 2011,
20 states plan to take such steps.
But managed care has not been a panacea for
Medicaids financial woes. Tennessee, which was one of the first states
to move to Medicaid managed care in the 1990s, was only able to avert
major cuts by passing a hospital provider tax this year.
Unless the economy drastically improves, state
Medicaid officials see more tough times ahead. "Unfortunately, these
tough choices are not over," said Carusetta of Arizona. The state will
need to identify an additional $1 billion in funding for the 2012 fiscal
year in order to replace the loss of enhanced federal matching funds
that are set to expire next June.
Note: This report released September 30, 2010
>>
News report on Arizona cuts
>>
Kaiser Family Foundation report on Medicaid
Table: States
Cutting Back On Medicaid Benefits
|
STATES
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SERVICES ELIMINATED:
Fiscal Year 2010
|
|
Arizona |
Denture coverage and
specified dental services |
|
California |
Multiple optional
services for non-pregnant, non-institutionalized adults
including acupuncture, dental (with exceptions), audiology,
speech, optometry, podiatry, psychology services and
chiropractic services and incontinence creams and washes |
|
Connecticut |
Over-the-counter
drugs (OTCs) except insulin, insulin syringes, and nutritionals
for tube fed individuals |
|
Hawaii |
Dental coverage
(except emergency services) |
|
New Hampshire |
Chiropractic care
benefits |
|
New Mexico |
Bariatric surgery.
(The state also limited routine adult vision services and
appliances) |
|
Oregon |
Non-medical vision
services. (The state also reduced dental services and denture
coverage) |
|
Virginia |
Disease management
program. (The state also expanded mental health and dental prior
authorizations requirements) |
|
|
SERVICES ELIMINATED:
FY 2011
|
|
Arizona |
Most dental care,
podiatry services, insulin pumps, percussive vests,
bone-anchored hearing aids, cochlear implants, specified
transplants, well exams, certain microprocessor-controlled
prosthetics, all orthotics, and non-emergency transportation for
childless adults (The state is also limiting outpatient physical
therapy visits to 15 visits per contract year) |
|
Kansas |
Attendant care
provided in the local education agency setting. (The state is
also limiting hospice services to 210 days) |
|
Massachusetts |
Restorative dental
services and dentures. (The state is also limiting coverage for
most acute inpatient hospital stays to only the first 20 days) |
|
North Carolina |
Obesity surgery,
panniculectomy procedures, and maternal outreach worker program
services. (The state is also imposing new coverage restrictions
on breast surgery and personal care services and increasing its
medical necessity standard) |
Source: Kaiser Commission on Medicaid and the Uninsured using CMS and
KCMU data
|
 This
information was reprinted from
kaiserhealthnews.org with permission from the Henry J.
Kaiser Family Foundation. You can view the entire Kaiser
Daily Health Policy Report, search the archives and sign up
for email delivery. © Henry J. Kaiser Family Foundation. All
rights reserved. |
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