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The economics of Medicaid, a private practice orthopaedic case study.

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  • The economics of Medicaid, a private practice orthopaedic case study.


    LAFAYETTE, La. — Eight-year-old Draven Smith was expelled from school last
    year for disruptive behavior, and he is being expelled again this year. But his
    mother and his pediatrician cannot find a mental health specialist to treat him because he is
    on Medicaid, and the program, which provides health
    coverage for the poor, pays doctors so little that many refuse to take its
    patients.

    Dr. Rachel Chatters, right, with Ana Smith, says she begs
    specialists to see Medicaid
    patients.

    Ms. Smith said she has tried for more than a year to find a
    psychiatrist to treat her son Draven, 8, who is on Medicaid.

    The problem is common here and across the country, especially as states,
    scrambling to balance their budgets, look for cuts in Medicaid, which is one of
    their biggest expenditures. And it presents the Obama administration with a
    major challenge, since the new federal health care law relies heavily on
    Medicaid to cover many people who now lack health insurance.

    “Having a Medicaid card in no way assures access to care,” said Dr. James B.
    Aiken, an emergency physician in New Orleans.

    Nicole R. Dardeau, 46, a nurse in Opelousas, La., in the heart of Cajun
    country, can attest to that. She said she could not work because of unbearable
    pain in her right arm. Doctors have found three herniated discs in her neck and
    recommended surgery, but cannot find a surgeon to take her as a Medicaid
    patient.

    From her pocketbook, she pulls an insurance card issued by the Louisiana Department
    of Health and Hospitals


    “My Medicaid card is useless for me right now,” Ms. Dardeau said over lunch.
    “It’s a useless piece of plastic. I can’t find an orthopedic surgeon or a pain
    management doctor who will accept Medicaid.”

    For patients like Draven Smith, whose mother said his behavior problems
    stemmed from attention-deficit hyperactivity disorder, the result is lack of access
    to doctors, especially specialists. For Draven’s pediatrician, Dr. Rachel Z.
    Chatters in Lake Charles, La., caring for poor children is a mission. About 80
    percent of her patients are on Medicaid. It is, she said, frustrating to beg and
    plead with other doctors to see Medicaid recipients.

    “I devote one afternoon a week, every Wednesday afternoon, to trying to find
    specialists for my patients — a pulmonologist for children with chronic
    persistent asthma, a neurologist for children with seizures or developmental delays, a psychiatrist for
    children with serious mental health problems, a hematologist for patients with
    sickle cell disease,” Dr. Chatters said.

    Draven’s mother, Ana M. Smith, said: “I have tried for more than a year to
    find a child psychiatrist or psychologist to get Draven evaluated, but the
    mental health professionals in this area have told me they absolutely do not
    take Medicaid. If Draven could get the help he needs, I believe it would be
    unbelievably beneficial to him.”

    The new health law calls for a temporary two-year
    increase in Medicaid payments for some primary care services, but this does not
    affect specialists.

    Bruce D. Greenstein, secretary of the Louisiana
    Department of Health and Hospitals, said, “We have a hard time finding
    specialists for Medicaid enrollees.”

    About 20 states cut Medicaid payment rates for doctors last year, according
    to a survey by the Kaiser Family Foundation. At least 16 governors have
    proposed rate reductions this year for health care providers.

    Gov. John Kitzhaber of Oregon, a Democrat, proposed cutting
    Medicaid payment rates for doctors, dentists, hospitals and nursing homes by 19 percent. Christine Miles, a
    spokeswoman for Mr. Kitzhaber, said his priority was to preserve eligibility.

    In Illinois, Gov. Pat Quinn, a Democrat, has proposed reducing
    Medicaid reimbursement rates by 6 percent for hospitals and nursing homes.

    Gov. Brian Sandoval of Nevada, a Republican, has proposed cutting
    Medicaid rates by 5 percent for hospitals, 15 percent for nonprimary care
    doctors and 25 percent for dentists.

    In South Dakota, Gov. Dennis Daugaard, a Republican, just signed a budget
    bill cutting Medicaid rates for doctors, dentists, hospitals and
    nursing homes — even primary care physicians and pediatricians.

    States have broad discretion in setting Medicaid payment rates. Federal law
    sets standards, but they are rather vague. Rates are supposed to be “consistent
    with efficiency, economy and quality of care,” and sufficient to ensure that
    services are available to Medicaid recipients at least to the same extent as to
    the general population in the area.

    In a few states, Medicaid recipients and providers have blocked cuts or
    secured higher reimbursement through litigation. But in many states, the promise
    of equal access remains unfulfilled.

    Dr. Kim A. Hardey, an obstetrician-gynecologist in Lafayette, said he
    received about $1,000 from the Louisiana Medicaid program for providing prenatal
    care and delivery for a full-term pregnancy, compared with $2,400 from private
    insurance.

    With the expansion of Medicaid eligibility, he said, more of his patients
    will be on Medicaid, and fewer will have private insurance, which helps offset
    the financial losses doctors sustain on their Medicaid business.

    Already, Dr. Hardey said, many of his patients have jobs with private
    insurance but switch to Medicaid when they become pregnant, avoiding premiums,
    deductibles and co-payments.
    NEW YORK (Reuters Health) - Orthopedic surgeons are much more hesitant to see kids with broken bones than they were a decade ago, suggests new research from California.
    When contacted by telephone, more than half of orthopedic practices wouldn't schedule an appointment for a kid with a recently-broken arm who had private insurance. What's more, almost all refused appointments to kids covered by Medicaid, the government-run health insurance program for the poor.
    "I'm not at all surprised by what happened with Medicaid," said Dr. David Skaggs, from Children's Hospital Los Angeles, one of the study's authors.
    When his team did a similar study 10 years ago, most practices also wouldn't see kids on Medicaid. But all of them scheduled appointments for those with private insurance.
    "The shocking finding was that half of the people don't see children anymore," Skaggs told Reuters Health.
    "They come with parents who ask lots of questions, and it just takes longer and it's more energy... and you're not paid any more," he explained.
    Especially outside of big cities with specialized pediatric hospitals, that may mean it's harder for injured kids to get treatment, he said.
    For the new study, a researcher called 45 orthopedic practices around Los Angeles pretending to be the parent of a 10-year-old boy with a broken arm who needed an appointment with an orthopedic surgeon. The investigator called each office on two different occasions, once saying that the son was privately insured, and once telling staff he was covered by Medicaid.
    Nineteen of those 45 practices offered the "parent" an appointment for a privately-insured kid within a week. That compared to 50 out of 50 offices that offered parents an appointment when Skaggs and his colleagues made the same calls ten years ago.
    Only one practice set up an appointment for a kid covered by Medicaid. And when the investigator asked each office for a referral to an orthopedic surgeon who did take Medicaid, just nine could name one.
    It's no secret that kids on Medicaid have a harder time getting appointments, because public insurance often doesn't reimburse doctors as much as private insurance. In California, "the orthopedic surgeons were losing money on every visit," Skaggs said.
    "The evidence in the article... is consistent with other evidence that a lot of physicians just don't accept Medicaid patients, period," said Sandra Decker, a researcher from the U.S. Centers for Disease Control and Prevention who has studied kids' access to care.
    "Even though these kids are 'insured,' they really don't have access to medical care," Skaggs added.
    That will only change if health care reform not only increases the number of people who are insured, but also increases reimbursement rates so practices have an incentive to see those patients, he added.
    Right now, Decker told Reuters Health, reimbursements to primary care doctors are set to increase -- but not payments to specialists like orthopedic surgeons.
    When orthopedic practices won't take kids -- regardless of what type of insurance they have -- more and more families have to seek out special pediatric facilities for treatment.
    Finding a specialist isn't so much of an issue in Los Angeles, Skaggs said. But, "it does become a problem when you're outside of an urban setting -- there's the rub."
    For some families, finding a kids-only orthopedic surgeon means more travel, money and time away from work and school, Skaggs and colleagues write in the Journal of Pediatrics.
    General orthopedic practices, Kasser said, "just aren't taking care of kids the way they were before."
    Let's take Patient A:

    Patient A is 72 and has Medicare and a broken wrist. They come into an orthopaedic office after making an appointment. They do not require a referral.

    The patient is given a complete history and physical for that of a new patient, x-rays are taken, and the patient is confirmed to have a broken wrist. A cast is applied.

    The patient is billed for the following:

    99203 - New Patient Visit
    73110 - 3 view xrays of the wrist
    29075 - Application of a short arm cast
    Q4010 - Cast supplies, short arm fiberglass cast, adult

    The physician is paid $196.74.

    In order to see this patient for this visit, the physician would have had to pay for countless things from rent, insurance, and taxes, to equipment, supplies, and staff. Staff would likely include:

    Receptionist/Registration - 15 minutes
    Medical Assistant or Nurse - 15 minutes
    X-ray technician - 15 minutes
    Insurance Biller - 10 minutes
    Physician - 30 minutes

    Let's take Patient B:

    Patient B is 8 and has a Medicaid HMO and a broken wrist. They call the orthopaedic office for an appointment after having been seen in the emergency room, but require a referral from their primary care physician anyway. In order to see a specialist for any care, they must have a referral, or the specialist will not be paid. So, they are informed of this, make an appointment anyway because it is time-sensitive, and then come into the office two days later without the required referral. The billing and insurance coordinator for the office then has to spend several minutes to much longer (possibly hours) to get the referral or approval from the insurance company to see the patient.

    The patient is given a complete history and physical for that of a new patient, x-rays are taken, and the patient is confirmed to have a broken wrist. A cast is applied.

    The patient is billed for the following:

    99203 - New Patient Visit
    73110 - 3 view xrays of the wrist
    29075 - Application of a short arm cast
    Q4012 - Cast supplies, short arm fiberglass cast, pediatric

    The physician is paid $142.23 which is actually higher than the normal ratio of medicaid payments.

    In order to see this patient for this visit, the physician would have had to pay for countless things from rent, insurance, and taxes, to equipment, supplies, and staff. Staff would likely include:

    Receptionist/Registration - 25 minutes
    Medical Assistant or Nurse - 15 minutes
    X-ray technician - 15 minutes
    Insurance Biller - 30+ minutes
    Physician - 30 minutes

    As you can see, it costs more to see Medicaid patients, and physicians are reimbursed less.

    If Patient A and B had required surgery, the amount of administrative time would have been even more lopsided, and the payments would have been:

    25575: Open reduction internal fixation of radius and ulna shaft fractures.

    Patient A: $927.92
    Patient B: $569.00

    Please note that this payment encompasses all preoperative planning, paperwork, the surgery iteself, and 90 days of follow-up care.


    Thoughts or questions?
    Heidi, PA-S1 - wife to an orthopaedic surgeon, mom to Ryan, 17, and Alexia, 11.



  • #2
    I wish those type of articles would include the costs associated with treating these patients compared to what the physician's OFFICE/PRACTICE gets reimbursed...because we all know that what little gets reimbursed is not all going into the Drs. pocket. DH's practice had to stop taking new medicare/aid patients because the cost of the meds alone were not even being covered by reimbursement.

    Ugh - about the only great thing I find in living this great medical family life is that I got to be a part of this group.
    Finally - we are finished with training! Hello real world!!

    Comment


    • #3
      It really is a problem and I wonder how things can improve. Ultimately, I think physician salaries are going to continue to fall and access for people with both medicaid and medicare will suffer. Of course, private providers will begin to match medicare's rates and ... then we will probably be looking at a shortage of specialists again. I don't know how we can dig ourselves out of this. We are willing to sink so much money into our military and rebuilding health care systems in other countries, but we aren't willing to invest in Americans. Something will need to change. The government will have to eradicate student loan debt for physicians accepting medicaid (and eventually medicare) or something along those lines. What I suspect will happen though is that they will somehow force physicians to see these patients without considering administrative, nursing and loan repayment costs ....

      The story of the little boy breaks my heart. Here, there are specialists who make room once a month for those types of patients...

      Kris
      ~Mom of 5, married to an ID doc
      ~A Rolling Stone Gathers No Moss

      Comment


      • #4
        I agree with you on many points Kris, we may be increasing coverage, but we are not increasing access and I fully expect some sort of "band-aid" policy that attempts to require physicians to see these patients. Heidi - Of the two articles you posted, the first article focuses on the poor reimbursement for treatment of Medicaid patients, and the second article supports this, but also says that general orthopaedic practices are beginning to limit seeing minor patients because of the hassle/time consumption of parents:

        "The shocking finding was that half of the people don't see children anymore," Skaggs told Reuters Health."They come with parents who ask lots of questions, and it just takes longer and it's more energy... and you're not paid any more," he explained.
        Do you see this happening in the industry? Even if they are privately insured, they are not being seen? What is the solution to this?
        Wife to PGY4 & Mother of 3.

        Comment


        • #5
          I think you're right. I know that Thomas has been to multiple meetings at the hospital this year that address the health care reform changes. Rheumatology, rads, oncology and general IM are all seeing pay cuts. This is independent of mediare/medicaid issues. We took a hit a couple of years ago when medicare stopped accepting consult codes for ID patients and changed the rules so that you couldn't bill a new patient visit for someone even if they come back 2 years later with a completely diff. problem.

          I'm friends with an OB/gyn here who told me that now there will be 1 fee for surgical procedures that will need to be split between oby/gyn and anesthesiology ... and that any complications that could arise will come out of that pot as well even if the surgeon has no fault in them.

          Generally speaking, it seems that doctors will have less time to see patients in order to not suffer a significant income loss and that patient care will suffer.

          Kris
          ~Mom of 5, married to an ID doc
          ~A Rolling Stone Gathers No Moss

          Comment


          • #6
            Originally posted by PrincessFiona View Post
            Generally speaking, it seems that doctors will have less time to see patients in order to not suffer a significant income loss and that patient care will suffer.
            I think this is true, even if we don't consider (1) individual mandate that will increase the sheer number of patients seeking care and (2) baby boomer generation aging and requiring more health care. We are on the cusp of a major shortage of physicians... and we are still penalizing medical students (did you know that you cannot get subsidized student loans anymore...?) all the way through attending reimbursement, every level is taking a hit. Although I agree with increasing health care coverage (on an ethical level), not enough is being done to increase the glaring access issues.
            Wife to PGY4 & Mother of 3.

            Comment


            • #7
              We've been smack in the middle of a doc shortage for a very long time, particularly primary care. Access to any heathcare provider in a rural area is tough to come by.

              Comment


              • #8
                Originally posted by diggitydot View Post
                We've been smack in the middle of a doc shortage for a very long time, particularly primary care. Access to any heathcare provider in a rural area is tough to come by.
                I agree. I grew up in a rural area and know this well... but it is going to get severely worse.
                Wife to PGY4 & Mother of 3.

                Comment


                • #9
                  (did you know that you cannot get subsidized student loans anymore...?)
                  Yup...got that lovely news a month or so ago. Sucks because we tried to only take the subsidized ones and avoided the unsubsidized as much as possible. Not an option now.
                  Married to a newly minted Pediatric Rad, momma to a sweet girl and a bunch of (mostly) cute boy monsters.



                  Comment


                  • #10
                    Side note.. We know Dr. Skaggs. Erik's mom works at CHLA. Erik did similar research with him when he was in medical school [the previous study he mentions].
                    Last edited by madeintaiwan; 11-22-2011, 11:11 AM.

                    Comment


                    • #11
                      This is headline issue in medicine. I hate to be the harbringer of bad news, but really, the medical community needs to be facing this issue head on. As evidenced anecdotally on this board, jobs are becoming harder to find, RVU demands are becoming more punishing, and physician compensation is decreasing. Meanwhile, student loan debt is increasing, physician liability is increasing, and the pool of providers is decreasing. There is a squeeze coming and I believe we are feeling just the first pains to come.

                      I can already here the criticism of physicians not taking on enough poor patients. Physicians have to pay their overhead and staff. Physicians have to behave as economically rationale beings or face being run out of business. The times they are a changing and it is not in the best interest of medicine or physicians.
                      In my dreams I run with the Kenyans.

                      Comment


                      • #12
                        I have nothing to debate, but just find the whole thing sad. My husband wants me to get a job because the insurance through his employer sucks. The rates aren't terrible, the coverage is ok, but the company they are switching to sucks. Our ped shook her head at the company when I told her. We have to see people in network to be the most cost effective. However, the mental health provider choices for children in our area are very scarce. We have two kids who have ADHD and need medical treatment for it. I feel sorry for the mother trying for a year to get psychiatrict help for her son. We will have one group in our area that sees children who take our private insurance. It isn't a group I want to be a part of. Most child psychiatric groups in our area take one type of insurance which is like driving a jaguar or don't accept insurance at all. DH's employer will no longer offer the Sagamore which isn't affordable and doesn't reimburse anything outside of network. We are screwed when it comes to mental health benefits. DH's employer also charges for insurance on a tiered basis depending on your salary so of course we are paying the most for our coverage.
                        Needs

                        Comment


                        • #13
                          I think those articles did better than some, but it just sounds like they are saying the doctors choose not to see Medicare/Medicaid patients because of the hassle and low reimbursement, rather than the fact that they're *losing money* on each patient. That's a huge difference, everyone knows an industry can't operate at a loss for long. I don't know what they expect to happen...
                          Laurie
                          My team: DH (anesthesiologist), DS (9), DD (8)

                          Comment


                          • #14
                            I see the lack of access every single day. We can't find psychiatrists (and ours are straight salary, we cover all overhead costs and malpractice insurance. The salary is $160k.)
                            to work. Not even that we can't find psychiatrists who will take Medicaid because we eat the overhead- we just can't find THE PEOPLE. 160k in a low COL state and all other expenses are covered...

                            and we just rehired the 80+ year old locum who is on his way to winter in Mexico. We use him every Spring and Fall.

                            and- you know what Texas Medicaid pays us for daily take-home methadone? $2.00 a dose. It costs us approximately $7.00 to provide it, once the medication, the bottle, the nursing time, the phsyician time and the counselor time is all factored in. Even with JUST the medication and the bottle and the dispensing of the med it costs us $3.25. But you know what that person would cost PER DAY in jail? Minimum $50/day. This isn't rocket science. Legislators just can't seem to connect the social systems here. Not treating mental illness or substance abuse or diabetes or heart conditions in ANY population will have a cascading impact on other social systems.

                            The push for the HMO world in the late 1980s and 1990s convinced medical schools to cut their numbers of students and we are surely paying for it now.

                            General medicine is in a world of hurt and even specialists are hard to find. There are way more child neurology jobs than there are graduating child neurologists, that's for sure- and that's not even counting the impending retirement of all of the boomers.

                            J.

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