At last, the Northam administration is fessing up to a major cost of Medicaid expansion that it swept under the rug when it pushed legislation through the 2018 General Assembly session.
Medicaid underpays its physicians, reimbursing them at only 71 percent of the rate they get paid by Medicare, and an even smaller percentage of what private insurers pay. As a consequence, only 63 percent of physicians accept Medicaid patients, and only 71 percent of those are taking new patients. So, when Medicaid expands eligibility to as many as 400,000 near-poor Virginians this year, many will find it difficult to find a primary care physician, and they’ll wind up seeking care in the emergency room, just like they always have.
Now the Department of Medical Assistance Services (DMAS) is asking Gov. Ralph Northam to include $19.1 million in the second year of the next two-year budget for Virginia’s share of the cost to lure more doctors into the Medicaid program. Stated DMAS in its funding request: “The combination of declining rates relative to other payers, significant limitations in primary care access throughout the state, and the increased demand for primary care services involving Medicaid expansion to an additional 400,000 Virginians creates a pressing need to bring Medicaid rates closer to parity with the market.”
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The bump in reimbursement is designed to shrink the Medicaid/Medicare gap from 29 percent to 20 percent. Whether that will entice enough physicians to accept up to 400,000 new Medicaid patients is anybody’s guess. Don’t be surprised if it doesn’t and the administration comes back in a couple of years saying, so sorry, we need a bit more.
Medicaid’s underpayment of physicians — one might say, its fleecing of physicians — has been a chronic problem for years, and the need to boost reimbursements comes as no surprise to anyone in the industry, least of all to Governor Northam, who is a physician himself. An obvious question arises: When the governor and his legislative allies were selling Medicaid expansion to the public, why didn’t they include reimbursement reform as part of the package? Why did they wait until the following session to deal with reimbursements as a separate issue? To ask the question is to answer it. Taxpayers and other cynics should be forgiven for thinking that they, too, were fleeced.
