Outlook good for boost in Medicaid funding
Doctors, hospitals seeking relief from years of cuts

By Dave Williams


ATLANTA - Dr. Ed Evans says he's still in business in Gwinnett County today because the General Assembly enacted tort reform three years ago.

Without limits on medical malpractice lawsuits, the Lawrenceville ob-gyn says he would have closed up shop by now, putting three other obstetricians and four nurse practitioners out of work, and leaving his patients in the lurch.

While that crisis-in-waiting has gone away, it's been replaced by another.

He says six straight years of inadequate state reimbursements for health care provided to Medicaid patients are threatening to drive his practice under.

"When we say we're getting to the breaking point, this isn't crying wolf," Evans said last week. "If we can't run the business, pay our employees and keep the lights on ... we've got to cut our losses."

It's not just Evans and other physicians who are complaining that they can't continue to absorb below-cost Medicaid reimbursements indefinitely.

Hospital administrators across Georgia say they're also feeling the pinch of reimbursements that have dropped since the last increase in 2002 to 84 cents on the dollar.

This year, health-care providers have gotten a new ally in the business community. The Georgia Chamber of Commerce is a key member of a statewide coalition that has formed to push the state's political leaders for an increase in Medicaid funding.

"Nobody can stay in business long providing services at less than cost, and that's what's happening in Georgia," Chamber President George Israel told members of a House budget subcommittee last week.

Effects far-reaching

Kevin Bloye, spokesman for the Georgia Hospital Association, said the impacts of inadequate reimbursements extend far beyond Georgia's 1.3 million Medicaid enrollees.

He said that when doctors and hospitals aren't paid what it costs them to serve Medicaid patients, they must try to make up those losses from paying patients.

The resulting increase in the costs of health care drives up the insurance premiums paid by businesses and their employees.

"It is a hidden tax on everyone," Bloye said. "You're paying more and more out of your pocket for health insurance."

One way doctors cope with inadequate reimbursements is to reduce the number of

Medicaid patients they treat or even stop taking them altogether.

But that just passes on the costs to hospitals, which by law must treat every patient who walks into an emergency room, whether they can afford to pay, are enrolled in Medicaid or have no insurance.

That drain particularly hurts rural hospitals, many of which are perpetually on financial thin ice.

David Askew, CEO of Calhoun Memorial Hospital in Arlington, said his facility spent $750,000 last year on indigent care, but only got back about 200,000 in reimbursements.

That balance between black and red ink can't continue for long, if the 25-bed "critical-access" hospital is to stay in business, he said.

Askew said losing the hospital would be a big blow to efforts to provide preventive health care in Calhoun, Early and Baker counties.

"The majority of people we serve are unable to go on a regular basis to a larger facility out of town, especially the elderly," he said. "We do a lot of community-based programs here. Preventive care would be non-existent."

The years of complaints doctors and hospital administrators have fired at state health officials about the low reimbursements apparently have begun to pay off.

Gov. Sonny Perdue is proposing to use some of the $70 million the state has saved in the last year through his Medicaid managed-care initiative and closer monitoring of enrollees' eligibility to increase reimbursements for doctors, hospitals and home health care providers.

Low ranking

The additional money could only help in a state like Georgia, which was ranked 40th in Medicaid spending per enrollee in 2004, the most recent year figures were available.

"It's a unique situation for us, but we are asking for support of the governor's budget," Bloye said. "It's not the magic bullet. But it is a significant first step."

Thus far, legislative budget writers have been receptive to the governor's recommendation.

"We're required to fund (Medicaid)," said Senate President Pro Tempore Eric Johnson (R-Savannah.) "The good news is we really have slowed the growth ... We're now checking people's income and legal status and managing their care."

Doctors and hospital administrators say they're concerned that even if they do get the increase the governor is requesting, it will end up in the hands of the three managed-care companies now overseeing Georgia's Medicaid program.

Rep. Mickey Channell (R-Greensboro), chairman of the House subcommittee in charge of health spending, said he's working on budget language that would require the companies to pass those funds along to the providers.

Bloye said the coalition GHA is helping to spearhead this year has as its ultimate goal the full restoration of Medicaid reimbursements to cover 100 percent of the costs of care by fiscal 2011.

"The more Medicaid ... pays, the less others will need to pay at the end of the day," said Philip Wolfe, president and CEO of Gwinnett Medical Center in Lawrenceville.

There's always the concern that once the General Assembly steps up with more money for doctors and hospitals in the '09 budget, lawmakers may feel they've done their jobs and be reluctant to approve further increases.

Bloye said the coalition is working hard to prevent that mind-set from taking root.

"We have made it a point since the very beginning to say we appreciate any help we can get this year," he said.

"But this is a long-term plan. We're going to need more bites at the apple."