Facing ‘Low’ Medicaid Reimbursements, Washington State Doctors Begin ‘Turning Away’ Patients

Many physicians in Washington's Puget Sound region -- "unwilling" to provide care under the state's health program for low-income residents -- have begun "turning away" new Medicaid patients, citing reimbursement as the "main issue" the Puget Sound Business Journal reports. Washington's Medicaid program operates both a traditional fee-for-service option and a managed care option, called Healthy Options. According to a survey of primary care physicians in Thurston and Mason counties conducted last month, only three of 25 individual doctors and three of seven group practices are currently accepting new Medicaid patients. "The bottom line is, for years and years Medicaid payments have not paid the freight," Dr. Curtis Edwards, president of the Thurston-Mason County Medical Society, said. Lakeshore Clinic medical director Dr. Paul Buehrens added, "Medicaid is a statewide disaster." In addition, the Washington State Medical Association reported that "medical practices statewide continue to limit their acceptance of Medicaid patients or drop out of the program altogether." The state Department of Social and Health Services' Medical Assistance Administration, which operates the state's Medicaid program, "knows there's a problem, but not how widespread it is," the Business Journal reports. "We have heard anecdotal information that some providers (physicians and other health care professionals) in some parts of the state are examining whether to increase the number of Medicaid clients they will see," Diane Weedin, the agency's support director, said. According to a recent report conducted by the University of Washington's Health Policy Analysis Program for the MAA, the state's Medicaid payments, on average, are 26% below private insurers' rates and 14% less than Medicare's rates.

'Stingy' Reimbursement Rates
According to physician groups that "have closed their doors" to new Medicaid patients, doctors can no longer "make up the difference" between the state reimbursement rates and the cost of providing care. "Ten years ago, we took everyone because there was enough fat in the system so we could cost-shift," Dr. Earl Beegle, CEO and CMO of Medalia Medical Group Northwest in Everett, said, adding, "That's no longer the case." MAA Deputy Assistant Secretary Tom Bedell called Medicaid payments to physicians "relatively low," admitting that they represent only "half or less than what physicians normally charge." In addition, Washington Gov. Gary Locke's (D) FY 2001-2002 state budgets "will do nothing to close the gap." The increases -- 2.1% for the next fiscal year and 2.3% for the following year -- "are certainly not as much as they would like to see," Bedell said. In addition to the "[s]tingy" state budget increases, many physicians groups' "generally have been losing money or skating on thin margins." A survey conducted by Washington State University researchers found that last year physician practices statewide suffered an average net loss of $94,990. While some physicians serving Medicaid patients contract with health insurers participating in the state's Healthy Options program, Locke has only proposed 6% budget increases for the initiative in each of next two fiscal years, prompting MAA to admit, "There is a risk that some of the managed care plans will no longer contract with the department." Many insurers have dropped out of Healthy Options, including Regence BlueShield and the Kaiser Foundation Health Plan this year, leaving only seven insurers still in the program (Neurath, Puget Sound Business Journal, 4/6).