VA report on current Medicaid access raises concerns for future care

By Kathryn Watson | Watchdog.org, Virginia Bureau

ALEXANDRIA, Va. — An alarming report suggests expanding Medicaid in Virginia could actually reduce access to care for the most needy.

The report by the Virginia General Assembly’s auditing arm shows varied access to care for the most needy already on Medicaid. With Medicaid paying roughly two-thirds of what private insurance pays, and about one in four doctors taking no new Medicaid patients in Virginia, the conditions could worsen.

“The current network of providers for Medicaid enrollees may be overburdened in the short term, according to staff of managed care organizations, which may decrease access to services for Medicaid enrollees currently eligible,” the report by the Joint Legislative Audit and Review Commission says. “However, access to health care should improve for uninsured people who qualify for Medicaid under expansion.”

From the poorest of the poor

Currently, Medicaid covers roughly 1 million of the very poorest in the commonwealth. This includes children from birth to age 18 and pregnant women at up to 133 percent of the federal poverty level, the elderly and disabled at up to 80 percent of the federal poverty level, and working parents up to 30 percent of the poverty level.

Expansion under the Affordable Care Act would cover up to 400,000 more people across all those groups up to 133 percent of poverty level, plus childless adults at up to 133 percent of the poverty level. That’s $31,321 for a family of four or $20,628 for a family of two.

The program continues to grow with or without expansion. Nearly 28,000 individuals have enrolled in Medicaid in Virginia since the ACA kicked in on Oct. 1, 2013.

“The people who are currently on Medicaid are the most needy,” said Tim Hannigan, a member of the grassroots group Virginians for Quality Health Care.

“It’s going to be harder for the needy people to get access to doctors,” Hannigan added. “They’re going to have to wait longer. What improvement is that making to the truly needy? It’s making things worse.”

Doctors concerned with reimbursement rates

Obstacles to access are related to things like low reimbursement rates, the report noted.

With or without expansion, doctors in Virginia are slowly turning away from Medicaid.

“Since 2003, physicians’ willingness to accept new Medicaid patients has decreased slightly from 64 percent, while willingness to accept new Medicaid patients has remained stable,” the report said. “… Physicians most frequently cited low reimbursement rates as a reason for limiting their acceptance of Medicaid patients, according to the five surveys that addressed this question.”

The report noted few other Medicaid complaints made by doctors around the country related to Medicaid reimbursements.

“The other limiting factors that were reported most frequently as barriers to acceptance were delayed reimbursements, as well as billing requirements and paperwork burden. Higher rates of missed appointments and less compliance with treatment by patience on Medicaid were also cited by more than half of responding physicians,” the JLARC report reiterated.

When Medicaid first started in 1965, it was for only the poorest of the poor, said Devon Herrick, a health care economist with the National Center for Policy Analysis. Most physicians would take in people — and still do — as a form of charity, Herrick said. But Medicaid has changed.

“It’s essentially taking in more and more people that are less and less poor,” Herrick said.

Doctors still have to pay the overhead costs for their businesses and feed their families. If a doctor ran a practice with entirely Medicaid patients, he would almost certainly lose money, Herrick said.

“They are very charitable,” Herrick said, “but at the same time, they have a perception of what’s fair.”

Access to particular sectors of health care in the commonwealth

That payment issue is at least partly related to generally lower access for Medicaid patients than those that are privately insured or even on Medicare, which generally reimburses better than Medicaid.

Current Medicaid patients have little trouble accessing prescription drugs, acute hospital care and nursing home care, the study found. Access to primary care, outpatient hospital care, and hospital-based psychiatric care are generally OK.

Access to specialty care, outpatient mental health care and dental care is poor, the report found.

• Only one in three dentists in the commonwealth participated in Medicaid in 2012, and just 53 percent of children enrolled in Medicaid in Virginia received dental care, compared with 81 percent of children nationwide between ages 2 and 17.
• Just 23 percent of mental health providers participated in Medicaid in 2012.
• Less than half of specialists participated in Medicaid in 2012. While 31 percent of privately insured children in Virginia received care from a specialist in 2011, just 21 percent of Medicaid patients did.

“Of course, it varies by specialty,” Herrick said. “Some specialties are not having a problem and are more apt to accept Medicaid enrollees than others.”

Access to care in different regions of the commonwealth

Any realtor will tell you location is key in the housing market — but it’s also key in the health care market.

The JLARC report found that access for Medicaid patients is toughest in some of the commonwealth’s most rural counties in Southside Virginia and the island containing Accomack and Northampton counties, counties where providers are fewer and farther between.

It isn’t a cut and dry issue.

“With expansion, I’ve certainly heard plenty of people screeching that Medicaid expansion is going to hurt doctors because it’s less than the cost of care and they’re not going to accept people who are on Medicaid. And some of that is very true,” said Beth O’Connor, executive director of the Virginia Rural Health Association. “But by and large, people who practice medicine in rural areas are there because they love rural areas. They’re already providing some free service anyway.”

In rural communities, doctors are more tightly knit with their communities and patients, O’Connor added. Sometimes, the stereotype is true that doctors will provide services in exchange for goods, like chickens, she added.

Doctors, however, are moving away from their own offices and congregating at larger institutions, such as hospitals.

“The number of physicians who are not affiliated with some sort of group are becoming fewer and fewer,” O’Connor said.

The Medicaid expansion issue is a little clearer for hospitals than privately practicing doctors. Hospital associations have been lobbying in favor of expansion since the issue arose in Virginia. That’s because the ACA cuts compensation to hospitals that take on a disproportionate number of poor people who can’t pay. That’s one of the reasons many states have expanded the Medicaid program — to help recoup those costs.

“One of the concerns has been, if we expand Medicaid, that means that you’re increasing the number of people who are paying less than the cost of service. But the perspective of that is, these are people who couldn’t previously pay at all,” said O’Connor, who has favored expanding the Medicaid program. “… Unlike a grocery store, a hospital can’t refuse service. If you’re bleeding, you have a heart attack, whether your complaint is real or not, the hospital has to see you.”

Expansion or no expansion, rural areas will be in greater need of doctors soon, O’Connor said.

“We have a very large portion of our physicians that are within five years of retirement,” O’Connor said. “So whether or not we have Medicaid expansion, we’re going to lose a lot of people anyways.”

Of course, that could make access to care more difficult, at least in the near-term.

The younger doctors that rural areas need can be less eager to move to such places with fewer amenities, Herrick said, and they probably won’t do so just to take on more Medicaid patients.

“Physician supply isn’t something you can increase overnight. It can take a number of years,” Herrick said.

— Kathryn Watson is an investigative reporter for Watchdog.org, and can be reached at kwatson@watchdog.org.

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