Medicaid increase absent from budget plan
Low reimbursement rate threatens health, economy, medical officials say
By John Quinlan, Journal staff writerand Whitney Woodward, Journal Des Moines Bureau | Posted: Thursday, April 03, 2008
DES MOINES -- As Democrats lay the foundation for universal health coverage, they have yet to respond to the medical industry's call to increase Iowa's Medicaid reimbursement rate -- an omission health-care workers warn could drive doctors out of state.
Iowa ranks among the lowest in the nation in Medicaid reimbursements, according to legislators and health officials, but the 150-page health-care spending plan Democrats unveiled this week does not include an increase in the amount the state pays doctors and dentists who provide care to the poor.
Representatives of Sioux City's two hospitals said Wednesday that is both short-sighted and unfair.
"We think it's an incredibly short-sighted decision if the Legislature continues down that road," said Jim Wharton, director of development and public policy at Mercy Medical Center -- Sioux City.
"It is absolutely essential that providers get a fair Medicaid rate increase to ensure the state is leveraging federal dollars and to ensure that Medicaid recipients in Iowa have access to health care," said Peter Thoreen, president and CEO of St. Luke's Health System.
Federal Medicaid matching funds are tied to state reimbursement rates.
Legislative leaders say they'd like to get an increase passed even though state dollars are stretched thin. But with less than three weeks left in the legislative session, they have not produced a plan to do so.
A 1 percent increase in the rate would cost about $6.5 million.
Wharton said that since fiscal year 2001, Iowa's hospitals have received only two 3 percent inflationary payment increases "which, in effect, means payment cuts." That's far too low, causing significant local impact, he said. Last year alone, he noted, Mercy had more than $3 million in unreimbursed Medicaid care. Put that on top of the more than $28 million Mercy had in unreimbursed Medicare, and the numbers are significantly threatening to health care organizations, he said.
"If the state of Iowa doesn't live up to its obligations to take care of people who have health care needs and otherwise can't afford it," Wharton said, "what happens is that the losses that hospitals can't absorb are passed on to the private sector, which means that everyone else is hit with higher health care insurance costs."
No health care organization in Iowa is looking forward to another year at zero percent, he said.
"We are already so far behind the curve of other states that this really complicates the situation," Wharton added.
Democrats' inaction is "mind boggling" given that they've set their sights on universal coverage, said House Minority Leader Christopher Rants, R-Sioux City.
A $1 per-pack cigarette tax increase, backed by Gov. Chet Culver and most Democrats, should have been used to fund a rate increase, Rants said. The increase has netted $135 million, according to the nonpartisan Legislative Services Agency.
"We can't provide a 1 percent increase or 2 percent increase for the hospitals that are providing care for the indigent?" Rants said. "It is less than honest to be out there to make public pronouncements ... saying they are going to provide public care to more people when they're not providing for the existing group of recipients."
Medical officials caution that failing to increase the rate will hurt Iowa's economy -- and could prompt some doctors to refuse to provide care to Medicaid patients or move to neighboring states that offer better rates.
"I don't think they recognize the crisis that is looming," said Dr. Janice Kirsch, who practices internal medicine at Mercy Women's Health Center in Mason City. "In order to maintain the level of health care in this state, we have to be able to reimburse physicians at an equitable rate."
National studies have demonstrated that Iowa suffers from a documented shortage of medical professionals, and in January, Lt. Gov. Patty Judge and the Generation Iowa Commission recommended the Medicaid reimbursement rate be increased as a way to attract workers.
Iowa ranks among the lowest in the nation in Medicaid reimbursements, according to legislators and health officials, but the 150-page health-care spending plan Democrats unveiled this week does not include an increase in the amount the state pays doctors and dentists who provide care to the poor.
Representatives of Sioux City's two hospitals said Wednesday that is both short-sighted and unfair.
"We think it's an incredibly short-sighted decision if the Legislature continues down that road," said Jim Wharton, director of development and public policy at Mercy Medical Center -- Sioux City.
"It is absolutely essential that providers get a fair Medicaid rate increase to ensure the state is leveraging federal dollars and to ensure that Medicaid recipients in Iowa have access to health care," said Peter Thoreen, president and CEO of St. Luke's Health System.
Federal Medicaid matching funds are tied to state reimbursement rates.
Legislative leaders say they'd like to get an increase passed even though state dollars are stretched thin. But with less than three weeks left in the legislative session, they have not produced a plan to do so.
A 1 percent increase in the rate would cost about $6.5 million.
Wharton said that since fiscal year 2001, Iowa's hospitals have received only two 3 percent inflationary payment increases "which, in effect, means payment cuts." That's far too low, causing significant local impact, he said. Last year alone, he noted, Mercy had more than $3 million in unreimbursed Medicaid care. Put that on top of the more than $28 million Mercy had in unreimbursed Medicare, and the numbers are significantly threatening to health care organizations, he said.
"If the state of Iowa doesn't live up to its obligations to take care of people who have health care needs and otherwise can't afford it," Wharton said, "what happens is that the losses that hospitals can't absorb are passed on to the private sector, which means that everyone else is hit with higher health care insurance costs."
No health care organization in Iowa is looking forward to another year at zero percent, he said.
"We are already so far behind the curve of other states that this really complicates the situation," Wharton added.
Democrats' inaction is "mind boggling" given that they've set their sights on universal coverage, said House Minority Leader Christopher Rants, R-Sioux City.
A $1 per-pack cigarette tax increase, backed by Gov. Chet Culver and most Democrats, should have been used to fund a rate increase, Rants said. The increase has netted $135 million, according to the nonpartisan Legislative Services Agency.
"We can't provide a 1 percent increase or 2 percent increase for the hospitals that are providing care for the indigent?" Rants said. "It is less than honest to be out there to make public pronouncements ... saying they are going to provide public care to more people when they're not providing for the existing group of recipients."
Medical officials caution that failing to increase the rate will hurt Iowa's economy -- and could prompt some doctors to refuse to provide care to Medicaid patients or move to neighboring states that offer better rates.
"I don't think they recognize the crisis that is looming," said Dr. Janice Kirsch, who practices internal medicine at Mercy Women's Health Center in Mason City. "In order to maintain the level of health care in this state, we have to be able to reimburse physicians at an equitable rate."
National studies have demonstrated that Iowa suffers from a documented shortage of medical professionals, and in January, Lt. Gov. Patty Judge and the Generation Iowa Commission recommended the Medicaid reimbursement rate be increased as a way to attract workers.
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