Physicians Brace for Medicaid Payment Cuts in 2009 Amid Weak Economy

Physicians nationwide are bracing for lower Medicaid payments in 2009 because of the weak economy, increased state spending and reduced tax revenues for the programs, according to American Medical News, the Wall Street Journal's "Health Blog" reports. AMNews, published by the American Medical Association, cites a recent survey released by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured that found Medicaid spending by states increased nationwide by 5.3% in fiscal year 2008 and enrollment increased by 2.1% largely because of the continuing economic downturn (Rubenstein, "Health Blog," Wall Street Journal, 10/13).

The survey also found that in FY 2009, Medicaid enrollment is projected to increase by 3.5% and state spending is projected to increase by 5.8%. More than two-thirds of state Medicaid directors said there is an even chance they will experience a budget shortfall in FY 2009 (Kaiser Daily Health Policy Report, 9/30).

According to AMNews, "Doctors' fees could be on the chopping block if states can't cover their costs." In an interview with AMNews, Vernon Smith -- a co-author of the KCMU survey and a principal at Health Management Associates, which helped conduct the survey -- said that reduced physicians payments are appealing to state programs because the cuts help generate savings at a faster rate than reducing benefits ("Health Blog," Wall Street Journal, 10/13).