One doctor interviewed by the New York Times about the upcoming cut in Medicaid reimbursement rates calls it a “bait and switch,” in which a seller promises one thing but replaces it with something less valuable. That label, however, misstates the situation with ObamaCare and its supposed cost-curve control. The bait-and-switch took place at the beginning, when the White House and Democrats temporarily suspended reimbursement cuts to Medicare and boosted Medicaid reimbursements, while using them both to paint ObamaCare as deficit neutral and attractive to doctors. This is more of a chickens-coming-home-to-roost moment:
Just as millions of people are gaining insurance through Medicaid, the program is poised to make deep cuts in payments to many doctors, prompting some physicians and consumer advocates to warn that the reductions could make it more difficult for Medicaid patients to obtain care.
The Affordable Care Act provided a big increase in Medicaid payments for primary care in 2013 and 2014. But the increase expires on Thursday — just weeks after the Obama administration told the Supreme Court that doctors and other providers had no legal right to challenge the adequacy of payments they received from Medicaid.
The impact will vary by state, but a study by the Urban Institute, a nonpartisan research organization, estimates that doctors who have been receiving the enhanced payments will see their fees for primary care cut by 43 percent, on average.
Stephen Zuckerman, a health economist at the Urban Institute and co-author of the report, said Medicaid payments for primary care services could drop by 50 percent or more in California, Florida, New York and Pennsylvania, among other states.
Doctors have already bailed out of Medicaid even at the higher reimbursement rates. In California especially, they’ve also been exiting provider networks for insurers due to price pressures, and some doctors have moved to a concierge system to opt out of the reimbursement-fee model entirely. Had Democrats and Barack Obama taken an interest in real health-care reform, they would have pursued that model as one way to drive it, and to put pricing signals back into what has become an all-you-can-eat system in both private and public networks.
Instead they chose ObamaCare, and with it explicit cuts to reimbursement rates even while pushing millions of people into Medicaid with temporary rate incentives to keep providers on board. Doctors initially opposed ObamaCare, though, which is why Harry Reid snuck in the delay in reimbursement cuts (for Medicare in this instance) at the last minute almost exactly five years ago. The “doc fix” dodge had been going on for some time, but Reid took it to a new level in order to fool the CBO into scoring ObamaCare as deficit-neutral. He submitted the Senate-written bill with the cuts to the CBO while winning AMA endorsement with a separate and temporary suspension of those cuts that the CBO didn’t get to see. That and the “temporary” Medicaid reimbursement rates have kept up the pretense of deficit neutrality ever since while pushing off the day of reckoning … until now.
The “bait and switch” complaint from doctors comes from the wink-and-nod Reid gave them at the time that those “temporary” cuts would never take place at all. As I wrote at the time:
The doctors support the bill because they know that Congress will eventually rescind the cuts; otherwise, providers will follow the example set by Mayo and simply stop treating Medicare patients. When Congress rescinds the cuts, ObamaCare becomes a deficit-expanding program. Harry Reid’s double-talk should be a giant red flag for anyone interested in honest government, fiscal responsibility, or both.
Except that this Congress has no particular incentive to rescind the cuts. First off, they can’t afford to do it, as it further widens the flood of red ink in the federal budget, because ObamaCare is already a deficit entitlement program. The Republican Congress will not have a deep interest in fixing the ObamaCare disaster, either — they want to dismantle it, in part because the entire system is riddled with this kind of dishonesty and contradictions, and the price tag for them will only keep increasing. Obama and his team made these cuts part of their cost-curve-bending argument, and the AMA endorsed it — so why shouldn’t both live with the consequences of their choices?
The White House seems determined to own the reimbursement cuts. They went to the Supreme Court a few weeks ago to argue that providers cannot sue states to boost payments based on the “murky” statutory requirement that Medicaid patients have “equal access” to care as those with private insurance, as the NYT’s Robert Pear explains:
Under federal law, Medicaid rates must be “sufficient to enlist enough providers” so that beneficiaries have at least as much access to care as the general population in their geographic area. In practice, doctors say, this standard is murky.
The Obama administration told the Supreme Court last month that health care providers had no legal right to enforce the “equal access” requirement in court. This section of the Medicaid law provides guidance to federal and state officials in setting Medicaid rates, but does not allow health care providers to sue state officials to enforce it, said Donald B. Verrilli Jr., the solicitor general of the United States.
Armstrong actually predates ObamaCare — it relates to reimbursement rates in Idaho for institutional care set before the Great Recession — but it shows that the Obama administration doesn’t want providers challenging its rate schedules in courts, which would point out just how poorly Medicaid will perform against private insurers in the coming years. Watch that case carefully, and remember it when Obama and Reid start lecturing Republicans about the reimbursement cuts they exploited to get the Democrats’ signature legislation through Congress in the first place.
Update: I wrote “Medicare” in the first paragraph when I meant “Medicaid.” It’s fixed now. I’ve also clarified the Reid “doc fix” in 2010 and the Medicaid reimbursements in two paragraphs.