President’s letter: Colorado’s Medicaid expansion: Is the honeymoon over?

Tuesday, July 01, 2014 12:05 PM
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John L Bender, MD
John Lumir Bender, MD, FAAFP
President, Colorado Medical Society

Dear Physician,

In June I had the privilege, along with several other Colorado Medical Society physicians, to represent our state in Chicago at the annual meeting of the American Medical Association’s House of Delegates. Dozens of resolutions were vetted, many were passed, and one in particular caught my eye, the unanimous adoption of AMA Resolution 103, titled “Continuation of Federal Augmentation of Primary Care Medicaid Payments.” The national delegates to the AMA “big house” agreed on the need to advocate strongly for Congress to continue the federal augmentation of primary care Medicaid payments to Medicare rates in perpetuity.

Nevertheless, this understanding is in sharp contrast to the messages I received from our elected officials and legislative aids in Washington, D.C., when I visited Capitol Hill back in April. At that time, it was clear that no such legislation was going to pass in the current Congress. With the midterm elections coming this fall, the Republicans are predicted by most political pundits to take control of the Senate as well as the House, implying almost certainly that no such appropriation will be made to fund this part of Obamacare at the federal level in 2015 or 2016.

On the brighter side, back here at home, Health Care Policy and Finance Director Sue Birch, strongly supported by specialty and CMS advocates, fought hard and won state-level funding from the Joint Budget Committee (JBC) in April to ensure that the Medicaid “bump” is still fully funded, but with state tax dollars, for primary care physicians in 2015 if the feds do not pass the appropriation. Furthermore, Ms. Birch also was given an additional 2 percent budget line item increase by the bipartisan JBC to distribute among specialty care physicians willing to see Medicaid beneficiaries in 2015. All good news for Colorado. However, here is where we start to see the end of the “honeymoon phase” of the Colorado Medicaid expansion.

For private sector primary care physicians daring to take on new Medicaid, the risk now is that the bottom may fall out in 2016 or beyond as it is likely the bump will be financed only on a year-to-year basis moving forward. Recall that Colorado has a billion dollar tax surplus in 2014, so funding the bump this time was perhaps more realistic this year than some future years for the legislature. But there is also ongoing need for payment reform at HCPF in how the bump is actually paid. Currently that extra payment comes to physicians in quarterly lump sums. But as the percentage of Medicaid in a private sector practice expands, having a larger and larger proportion of the accounts payable tied up in a bump payment which is made only quarterly stresses the operational budget for any size organization. HCPF needs a new strategy to pay the entire claim, bump and all, much more timely if it wants a value chain of physician suppliers capable of meeting expansion demands.

The punch line is that here in Colorado physicians are still left with a fee-for service program, with or without the bump. And fee for service is dead.

The only way to “reignite the romance” for the Medicaid expansion is for Colorado to move past fee for service and into physician-led accountable care organization (ACO) payment models that offer true shared savings or gain sharing. We may have married over that little “bump” but it will take the real commitment of an ACO payment model to keep the marriage of HCPF and private sector physicians moving forward together.

John L. Bender, MD, FAAFP

Posted in: Colorado Medicine | President's Letter | Practice Evolution | Payment Reform


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