Health Reform and “Under Duress”

I was quoted in the Des Moines Register on Friday, November 27 regarding the Medical Assistance Advisory Council (MAAC) meeting that I attended on Wednesday, November 25. The topic is familiar in this blog: Medicaid Managed Care. The federally-mandated Council advises the State of Iowa on Medicaid issues and is one of the major overseers of the upcoming Medicaid Managed Care “modernization” that is currently scheduled to begin on January 1, 2016—four short weeks from today. The approximately 30 other members of the Council and I spent two hours raising questions and concerns with the Iowa Department of Human Services and representatives from the four managed care organizations (MCOs) that will divide 550,000 Medicaid patients and more than $3.5 billion in state and federal monies.

At this meeting, I expressed my concerns as I have in several previous blog posts. I will again express my concerns on Monday, December 7, at an upcoming Legislative Oversight Committee meeting, which is another of the oversight groups for this Medicaid project. The balance of this post is my planned testimony before the committee.

Legislators: As you know, I have been a critic of the planned Medicaid Managed Care project from its inception. I have expressed my thoughts as a member of the Medical Assistance Advisory Council, as a member of the Patient-Centered Health Advisory Council, in my blog, and as a member of both the Iowa Medical Society’s and the Iowa Academy of Family Physicians’ legislative committees. I am also a family physician with many Medicaid patients in my practice.

My concerns regarding the inherent pressures of for-profit corporations making life and death decisions for a vulnerable, voiceless, and unsuspecting population, the speed of implementation, and the track records of the managed care organizations chosen, echo the comments you have heard throughout this debate. Had I been a legislator, I would have chosen a different course.

Today, I focus on the recent contract negotiations between the MCOs and providers in which I have been involved, as well as other examples that were discussed at the November 25 MAAC meeting. At that meeting, the psychologist association representative was concerned that psychologists were being asked to sign MCO contracts that did not have their fees specifically addressed in the contract. If they do not sign the contracts, they have been told that they would have a 10 percent reduction in fees as out-of-network providers.

Dave Beeman of the Iowa Psychological Association was quoted in the Des Moines Register and I heartily agree with his statement: “To say there is going to be a 10 percent reduction for not signing a contract that’s incomplete sounds a lot like signing a contract under duress.”

In my personal experience, my clinic and I are similarly facing a 10 percent reduction for not signing contracts that have us agree to a Prior Authorization process that, with one MCO, is so broad as to say “physician services” and another MCO contract reads “still being finalized.” Another concern I raised is that an expedited Prior Authorization is to contractually have only a three business day’s time limit. As a family physician, the devil in these details is that I have to worry about ordering appropriate tests for a patient then working to get the tests approved by insurance companies in a timely manner. Not knowing the scope of these Prior Authorization requirements and having an excessive, lengthy approval process are reasons for me to hesitate signing the contracts. Managed care organizations too often use prior authorization to limit or deny care.

Finally, a major concern is that rural health clinics in Iowa will not be paid on a cost basis process when Medicaid Managed Care is implemented. In Iowa, the rural health care system is made up of 82 critical access hospitals — a special federal designation for smaller, 25-bed facilities — and 142 rural health clinics, making it one of the largest rural health systems in the country. Iowa has a rural population of more than 1.4 million people — about 46 percent of the state’s total population.        Their projected charges for Medicaid patients—a major part of their practice—will go down by a factor of five and possibly more. These rural health care clinics may not survive this devastating financial blow. In the end, rural patients in Iowa will suffer.

My recommendation is that if you do not totally halt the project, at the very least nullify the Department of Human Services’ arbitrary 10 percent fee reduction for out-of-network providers until July 1, 2016.  This rate reduction was never proposed nor was it discussed during the legislative session when physicians and other health care providers were promised no rate changes till July 1, 2016.

Second, the mandate must be the continuation of cost-based reimbursement for Iowa rural health clinics when providing care to Medicaid patients.

Finally, I noted Dave Beeman’s quote in which he used the word duress. Duress can be defined as an action brought to bear on someone to do something against their will. For many years, Iowa providers have chosen to see Medicaid patients despite reduced fees because it is our belief and will that it is simply the right thing to do.  Accepting Medicaid patients at this level is not as prevalent with health care providers in many other states. If Medicaid Managed Care creates enough administrative burdens or reduces fees beyond the low levels that currently exist, I guarantee that the will of healthcare providers to do the right thing by seeing Medicaid patients will be severely tested. It will be tested to the brink if providers believe their administrative and financial burdens are used to profit managed care corporations in Philadelphia, Pennsylvania or Tampa, Florida.