Millions More for Medicaid Expansion? Now You Tell Us

One of the conceits of Virginia’s Medicaid debate is that expansion would pay for itself. Uncle Sam would pick up 90% of the cost, leaving Virginia to raise money for only 10%. The Commonwealth would save a few hundred million dollars through reduced funding for prison healthcare, mental health, indigent care funding, FAMIS pregnant women, and other programs. And hospitals would kick in more than $300 million from a provider assessment.

Now we read from Michael Martz with the Richmond Times-Dispatch, the only reporter providing meaningful follow-up to the biggest entitlement expansion in recent Virginia history, that “the work is far from done in expanding access to health care for 400,000 uninsured Virginians.”

It turns out, he writes, that lawmakers and state officials “didn’t include money in the two-year budget to raise Medicaid reimbursement rates for doctors and other front-line health care providers.”

Oops. And how much  money might that be? Supposedly, about $47 million in the second year of the biennial budget to raise reimbursements for doctors to about 67 cents on the dollar to 88 cents.

I’ve been making this point throughout the debate — expanding Medicaid coverage is meaningless if the federally and state-funded health insurance program for the poor pays so little that many doctors won’t take money-losing Medicaid patients. At least, it appears, our legislators did understand the problem even if they didn’t openly acknowledge it. (If they did openly acknowledge it, no one in the media picked up on it.) But now that Medicaid expansion is a done deal, lawmakers and lobbyists are suddenly talking about previously undisclosed liabilities to taxpayers.

“Just because you get insurance doesn’t mean you have access to a doctor,” said Ralston King, vice president of government relations for the Medical Society of Virginia, stating an issue that should have been obvious to everyone but somehow flew under the media radar through months of debate. Finding a way to pay for it is the next challenge, King said. “Right now, we don’t have a funding mechanism.”

Then there’s this from Dr. Todd Parker, an emergency room physician at Riverside Shore Memorial Hospital on the Eastern Shore: “We are encouraged that along with this legislation, given the very low reimbursements that Medicaid provides providers, that legislators are considering ways to increase Medicaid reimbursements and otherwise help physicians who may see increased numbers of Medicaid patients.”

Bacon’s bottom line: So, Medicaid expansion isn’t complete, and ordinary Virginians aren’t finished paying for it. We’ll pay indirectly by means of a $300  million provider tax, some proportion of which will be passed on to patients, and we’ll pay again when legislators figure out where to find another $47 million a year to make Medicaid expansion meaningful by raising reimbursements to a level where physicians don’t treat patients at a loss.

Who even knows if that $47 million number is real? How long it will take to morph into something much bigger? Do the math: About 1.3 million Virginians currently receive Medicaid. Expansion will add another 400,000. Forty-seven million dollars spread over 1.7 million patients equals less than $27 per patient. Do you think $27 a year will raise physician reimbursements from 66% to 88% of the cost of treatment? I don’t.

If you feel hoodwinked by Medicaid expansion — politicians consistently low balling the cost and the fourth estate failing to probe what it would cost the public — you’re not alone. So do I.

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18 responses to “Millions More for Medicaid Expansion? Now You Tell Us”

  1. TooManyTaxes Avatar

    It should be a requirement to retain a license to practice medicine in Virginia that every doctor must take an aliquot share of Medicaid patients. And the licensing rules should be revisited to allow for more services to be provided by nurse practitioners and R.N.s. Most lawyers give away lots of hours to the indigent, nonprofits and community organizations. Why not the docs?

    1. Acbar Avatar

      Agreed. But forcing that “pro bono” work on doctors at inadequate compensation rates, rather than first making those rates reasonable, is merely a tax on their income. The lawyer “indigent legal aid” model is inefficient and inadequate to the task overall, and compared to legal aid the problem of inadequate health care is many times more massive.

      We seem too often to have a Dickensian view of social services: leave such matters to the Church and to a few bleeding heart philanthropists, and ask “the professions” to contribute a token share of their services to charity mainly to remind them of their Christian obligation to provide charity. But charity won’t cope with today’s massive dependence on the health safety net. Even conservatives must confront that “elephant in the room.”

      1. TooManyTaxes Avatar

        First, let’s make all doctors take a reasonable share of Medicaid patients. Then take a look at the reimbursement rates. Perhaps, they need to be raised. But once again, many lawyers regularly accept cases (often criminal defense) where state reimbursement rates are well below what the lawyers otherwise charge. Frankly, I’m tired of hearing how special doctors and other members of the health care profession are. As licensed professionals we all have some duty to society. And in today’s world, that means taking a fair number of Medicaid patients.

    2. djrippert Avatar

      That’s crazy, TMT. Should the government also insist that all commercial pilots spend some part of their year flying Post Office planes for minimum wage too? Should people in private security walk a beat twice a week for their local police departments in order to keep their PI license?

      Your reference to lawyers is sadly lacking. Yes, some lawyers are willing to work pro bono for some part of their time. But it’s their decision as to whether to work pro bono and how much of their time to allocate to pro bono. As far as I know, nobody would lose their license to practice law if they decided not to practice pro bono.

      I know a lot of doctors of family medicine. Many of them sometimes treat patients for free just like lawyers do. All of them would like to have more patients but only if they can treat those patients at a profit.

      The problem, as always, is the government and the politicians that run the government. If they’re paying 66% and 88% is required to provide a sufficient return for doctors to treat patients then they are underpaying by 25%. Why doesn’t the government dictate to Boeing, Lockheed Martin, etc that all contracts will immediately be discounted by 25% and if they don’t like that they don’t just lose military contracts, they can’t do civilian contracts either?

      Or, a better idea – all government employees will immediately see their salaries cut by 25% and they are not allowed to seek employment outside of government.

      Talk about transferring the blame from the guilty (the politicians) to the innocent (the doctors).

      1. TooManyTaxes Avatar

        DJR – take a look at the 2013 report by the Bureau of Justice Statistics (U.S. DoJ) entitled “State-Administered Indigent Defense Systems, 2013,” available at Turn to Table 14 and see the hourly rates paid by state governments to private practice lawyers handling indigent defense cases. Many of the rates are less than $100 per hour.

        In Virginia, the 2016 annual report contains the following ” Pursuant to Va. Code § 19.2-163, an attorney appointed to represent an indigent defendant in Virginia is compensated at an hourly rate set by the Supreme Court. The total amount or cap to be paid is set by statute and may not exceed $120.00 for a misdemeanor in general district court, $1,235.00 for a felony charge where the maximum period of confinement is more than 20 years, and $445.00 for any other felony in circuit court. Fee cap waivers are available up to an additional $120 for misdemeanors or juvenile cases in the district court (unless the juvenile case is a class 2 felony, then the waiver amount could equal up to an additional $650). Felony charges with a penalty of 20 years or more can receive an additional waiver of up to $850. Other felony charges may receive an additional waiver of up to $155. With approval of the judge, Virginia also allows for a second level waiver in certain cases. These caps, even with the initial waiver, remain some of the lowest in the nation.” Pages 14-15.

        Another summary of state payment rates is found at Appendix B.

        Why are doctors so special?

        1. djrippert Avatar

          I agree that the payments to lawyers handling indigent defense are too low. I just don’t agree that the answer is to spread the system of government mandated indentured servitude to the medical profession.

          The state should hire public defenders and pay them the same as prosecutors. The state should hire doctors and set up “Medicaid clinics”.

          If the state is going to force people to work for unfair wages then everybody should be force to work for unfair wages. Put a few of our social justice warriors on weekend roadside trash pickup for minimum wage and see how fast their attitude changes.

          Neither “justice for all” nor universal healthcare are cheap. The sooner that becomes clear the sooner we can have a reasonable discussion about costs and benefits.

  2. Steve Haner Avatar
    Steve Haner

    I’m pretty sure my earlier post mentioned that the reimbursement increase was only for hospitals and hospital-affiliated practices. Now we know how much it will cost to bring the other doctors up to 88 percent. If it happens for them. I wouldn’t be so sure.

  3. Acbar Avatar

    Your caption is infuriating to me. You’re blaming the expansion of Medicaid for the cost of fixing the reimbursement percentage under Medicaid. These are totally separate issues. They are happening together because we finally have some people with policy sense in the GA, who are going about fixing both of them.

    I’ve said it before and must repeat: Medicaid is far, far from a well designed program. Single payer is not the answer; neither is automatic payment of whatever a doctor or pharmacy wants to charge once some government committee decides the procedure is eligible. The efficiency incentives to the medical community are crappy. The resulting efficiency of care for those covered by it will be crappy. Medicaid needs further overhaul!

    But — is Medicaid expansion the right thing to do at this time, considered by itself? Is increasing the reimbursement rate the right thing to do, considered by itself? These are both incremental improvements that are long overdue.

    Now, if a certain political party would accept that the judgment of the GA is that people need more health care not less; would cease its destructive knee-jerk attacks on the whole concept of a health care safety net for our least-advantaged citizens; would turn to constructive consideration of ways to improve further what we have now, or even to replace it with something altogether better — then maybe that certain political party could take pride in steering us all to an alternative, market-based solution that works! Certainly the evidence from other developed nations is that the job can be done more comprehensively for far less than we are spending on health care in this country. But that is tomorrow’s challenge.

    1. Acbar, the necessity of raising reimbursements is joined at the hip with Medicaid expansion. You can’t increase Medicaid coverage and have a meaningful impact on access to healthcare without also increasing provider reimbursements.

      The debate over Medicaid expansion centered on the fiscal implications of the initiative. The fiscal implications of enrolling an additional 400,000 Virginians was discussed. The fiscal implications of raising Medicaid reimbursements was not — at least not in a way that made it into the public discourse. Maybe you don’t feel deceived, but I do.

      Could expansion foes have done a better job of articulating a market-based agenda for health care? For sure! I am acutely disappointed with the passivity of the Republican majority. Maybe it’s time for a third party.

      1. Acbar Avatar

        Should reimbursement rates have been fixed without Medicaid expansion? Yes. No doctor wants to lose money on providing a service, at least relative to what can be earned in the private sector. Is this a problem for existing Medicaid and Medicare patients? Yes. Get on Medicare like I am (and you will be) and try finding good doctors for what ails you!

        I will concede that the expansion of Medicaid also expands the compensation problem, linearly. Medicaid doesn’t work if doctors won’t participate — but don’t blame that on the expansion. If the cost of that wasn’t explained, that was wrong.

        As for that “third party” comment — another day, another debate, but Hallelujah if enough voters would take the Libertarian Party seriously.

      2. Acbar Avatar

        *wrong – but typical of politics today, trying to sneak multiple “fixes into a bill that nominally addresses only one of them.

        1. TooManyTaxes Avatar

          Fully agree. The discussion was only about expanding Medicaid coverage and not a concomitant increase in reimbursement rates. It’s downright dishonest to push for both but maintain silence on the latter. Here’s betting a reporter at the Post raised the issue but was pressured not to report about the second issue.

        2. djrippert Avatar

          The goal is better health care for poor but working Americans. That’s what the slippery eels in politics sold us. Everything else was just the means to achieve the goal. Pushing a plan with known gaping holes is pure dishonesty. I see it as similar to a prosecutor failing to disclose exculpatory evidence in a criminal trial.

          If I ever had caught one of the managers working for me pedaling an expensive plan with known flaws just so he or she could “discover” those flaws after it was too late to go back and ax the plan I’d fire that manager on the spot for cause. Pack up their personal things in a box and get the hell out of my company.

          Why do we tolerate unending dishonesty from our elected officials and the other officials they appoint?

    2. djrippert Avatar

      Respectfully, I don’t see anything wrong with Jim’s caption. The sleazy politicians sold this as providing medical insurance for the working poor. They knew, or should have known, that the reimbursement rates they set will cause the reality of coverage for the working poor to fall far short of their advertised goal. As always, the politicians are the problem. Lying by commission, lying by omission, lying, lying, lying.

      I am sick of being lied to by the scumball political class.

      “You can keep your insurance plan if you like it.”

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Don says:

        I am sick of being lied to by the scumball political class.

        “You can keep your insurance plan if you like it.”

        I too am sick of their lies, turning my government into a liar too.

        I am also sick of that political class within my government and our institutions turning fellow citizens into victims, making them supplicants, so they can be victimized by that political class again and again, for generation upon generation, labelled now the underclass. This is done by using lies to undermine our culture, and its competence, as well as our government and institutions on all levels.

  4. Peter Galuszka Avatar
    Peter Galuszka

    “Hoodwinked?” Maybe by Bacons Rebellion. Agree that expanding Medicaid to 400,000 lower income Virginians is a different kettle of fish than getting into doctor pay-back rates. Separate issue. Are you insinuating that doctors need a fee review just for the extra Medicaid (the newly expanded ones) that Doctors would get?

    Looks like the anti-Medicaid types are sticking their knives into anything they can.

  5. S. E. Warwick Avatar
    S. E. Warwick

    One hidden cost of the expansion I have not seen mentioned is the impact it will have on localities who are required to validate the eligibility of each person to receive Medicaid.

    Even before the expansion, little Goochland County was gigged on its CAFUR a couple year ago for not confirming, in a timely manner, Medicaid eligibility and racked up a good bit of overtime in its Social Services Department to prevent a recurrence.

    They may need to hire someone in the future. Wonder how larger jurisdictions will handle this. Hiring local government employees to do paperwork instead of teachers, LEOs or fire-rescue personnel seems like just another unfunded mandate from a GA clueless about local government.

  6. oconnorb Avatar

    Docs in private practice can turn down patients, but hospitals and Community Health Centers are not permitted to do so. One CHC is estimating that 10,000 of their current patients will go from having no insurance to having Medicaid.

    Since when is nothing better than something?

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