The Kansas Health Policy Authority implemented a 10 percent Medicaid reimbursement rate reduction on January 1 that affects more than 25,000 healthcare providers and could ultimately overburden Kansas hospitals with Medicaid patients.
Gov. Mark Parkinson called for the Medicaid cuts in the face of a $260 million deficit, as the Kansas Constitution requires a balanced budget. The KHPA is a state agency responsible for coordinating a statewide health policy agenda that incorporates purchasing and administration with health promotion strategies.
For the Kansas medical community, the cut triggered “a bit of a shockwave,” according to Kansas Medical Society Executive Director Jerry Slaughter. He said many are waiting to see how long the roughly 90 percent of physicians who currently take Medicaid patients can stay with the program.
“Physicians want to maintain their commitment,” Slaughter said, although he admitted “the physician community is thinking the reduction is going to be long-term.” He said that prospect does not bode well for the continuation of a high Medicaid participation rate among providers.
A potential decrease in the number of physicians accepting Medicaid enrollees has many in the state’s hospital community nervous that the burden will shift disproportionately to them.
Kansas Hospital Association President Thomas Bell said the Medicaid cut was “just plain bad healthcare policy.” Bell lamented that, with state budget woes continuing into the next fiscal year, it is unlikely the state legislature would reverse the fee reduction in the near future.
Bell says that if primary physicians deny care to Medicaid patients, they will turn to hospitals.
“It just stands to reason that those people are going to show up at hospital emergency rooms,” he said. Slaughter also acknowledged that overflowing ERs could be an outcome of the fee cut, and would “ironically ... end up costing the state more money.”
The state’s Medicaid changes further affect hospitals through targeted cuts in both the Disproportionate Share Hospital, or DSH, program and Graduate Medical Education program. Bell is particularly concerned about the impact on these programs.
“Taking away the DSH creates even higher levels of uninsured and charity patients,” Bell said. “It exacerbates that situation, and the need for new doctors, nurses, and professionals is not going away either.”
Bell suggested that, after absorbing losses, Kansas hospitals might eventually layoff employees and eliminate key services.
Meanwhile, KHPA continues to publicly ask providers to bear with them as the agency works on remedies. In January, the Authority was able to stop the closure of its call center for Medicaid providers.
“We were very concerned about providers dropping out,” said Andrew Allison, KHPA’s acting Executive Director. “Restoring the customer service operation was a big relief for us and for the providers.”