Federal court weighs state Medicaid adequacy lawsuit

Mar 30, 2012

Florida’s Medicaid plan is wrapped up in a lawsuit alleging the state doesn’t provide adequate dental and medical care for children. Regan McCarthy reports experts say that’s because Florida’s physician reimbursement rates are so low.

In 2005 a group of pediatricians and parents whose children rely on Medicaid filed a lawsuit against the state’s Medicaid program.  They argue program doesn’t comply with the Federal Medicaid law. Samuel Flint The Associate Director of the School of Public and Environmental Affairs at Indiana University Northwest, who has served as an expert witness in this and many similar cases, says he agrees.

“The law is very specific and it talks about states have an obligation to have a economical and efficient program and it they must pay at a rate that is sufficient to enlist enough providers so beneficiaries under Medicaid have the same access to the healthcare system as people insured under other plans have within the same geographic area.”

Flint says Florida pays pediatricians who see Medicaid patients one of the lowest reimbursement rates of any state. Doctor Louis St. Petery is the executive vice president of the Florida Pediatric Society, one of the groups involved in the case. St. Petery says the number of children who are covered by Medicaid is increasing.

“Half of the kids born in the state, if you go to Tallahassee Memorial or any nursery in the state, half of the kids born are on Medicaid.”

St. Petery says it costs him about 30-dollars out of this pocket to see a Medicaid patient. And he says when you consider that potentially 50-percent of his patients could be on Medicaid that really adds up. He says that makes some doctors think twice before accepting Medicaid patients.

“You can’t go to Publix and buy things for less than it costs and you certainly can’t expect physicians to see children for less than it costs to provide it.”

But Flint says that 30-dollar figure really depends on what all is being counted. He says yes, physicians do get paid significantly less money for seeing Medicaid patients than they do for seeing those with private insurance. And he agrees that probably is less than the average cost of seeing a patient. But, he says because of that, doctors usually fill up their appointment books with private insurance patients first, and use Medicaid patients to fill the empty spaces.

“In which case, you would make a profit. Because it would be comparing the revenue that you get from Medicaid to the so called marginal cost, in other words the cost that it takes to see a patient. So in other words, you’ve already paid your malpractice insurance, and you’ve paid the rent on your office all of your overhead costs are already covered. Those are fixed costs. When you see a patient you have a tongue depressor, you have a couple of other items that would cost you three or four dollars.”

So when you consider the marginal cost, it’s not really a loss to see a Medicaid patient if the doctor has open spots. But one issue that is coming up is a doctor’s time.

“Leisure is becoming competition. If it turns out that Wednesday afternoons I don’t have many patients I’m going to coach my kid’s soccer team.”

But he says studies show increasing reimbursements will increase the number of appointments made available for Medicaid patients. There’s some debate on what the payment should be in order to get the most doctors to see Medicaid patients, but most studies suggest it should be around 80-percent of the commercial rate, or close to the Medicare rate. Flint points out 21 states in the country are actually paying at about 90-percent of the Medicare rate or higher right now.

On the other hand, some state officials say reimbursements aren’t really the problem. Representative Matt Hudson says many Floridians have trouble getting care no matter what kind of insurance they have.

“We do not have enough dentists period in Florida. We do not have enough doctors period in Florida. Regardless of who they’re treating. We have counties in this state that don’t have dentists at all. So its not a matter of who they’re treating. There’s nobody to do the treatment.”

But Flint says Florida has roughly the same proportion of doctors as the rest of the states and adds that Hudson’s argument doesn’t really apply in this case, because the law requires that Medicaid patients have the same access to care as people with private insurance who live in the same area. A Miami court is mulling over the case after lawyers from both sides presented arguments this week.