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Dollars and Sense: Countering Medicaid Cuts

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Ah, spring! When many a young (and old) person’s fancy turns to baseball, and Americans shake off their post-holiday slumber. Unfortunately, in recent years, there has been an additional rite of passage, as economically strapped states look to trim their budgets and set their sights, in part, on Medicaid programs.

Gone are the glory days when reimbursement rates for health care providers were gradually increasing. In fiscal year (FY) 2010, 39 states froze or reduced payments to providers. Some states are now beginning to restrict benefits or require a utilization review before patients can access care—and the proposals seem to get more extreme with each announcement.

In California, Governor Jerry Brown has proposed about $1.7 billion in cuts to Medicaid, which would be accomplished in part by restricting beneficiaries to 10 “doctor” visits per year and six prescriptions per month. (The state’s Medicaid director told the New York Times the cuts would “affect only 10% of Medicaid recipients.”) In New York, Governor Andrew Cuomo’s proposed budget would reduce Medicaid spending by almost $3 billion (yes, billion) in FY 2011-2012 and by more than $4 billion in FY 2012-2013. Combined with the loss of matching federal funds, New York’s state Medicaid program would lose $15 billion in funding over two years.

States are currently limited in how they can cut Medicaid funding. They can reduce payments to clinicians and medical facilities (eg, hospitals and nursing homes), raise taxes on those providers, or cut benefits that are not expressly required by the federal government.

“Any time you start to reduce provider payments, the incentive for anyone—any health care professional—to take on a larger role or more patients under Medicaid becomes a difficult proposition,” says Michael L. Powe, Vice President of Reimbursement and Professional Advocacy for the American Academy of Physician Assistants (AAPA). “They can’t afford to lose money on every patient they see, either.”

Whatever form state cuts to Medicaid encompass, this is an issue all health care providers should take an active interest in—because it will affect patient care, which should always be Priority #1.

The Path to Optimal Utilization
Representatives of AAPA and the American Academy of Nurse Practitioners (AANP) say they are “sensitive” and “sympathetic” to the plight of states that are considering budget cuts. “State budgets are hemorrhaging in many ways, and clearly Medicaid is the fastest-growing facet of a state budget, followed closely by education,” Powe observes. “So we understand they have to do something to control costs.”

His viewpoint is shared by Tay Kopanos, DNP, NP, AANP’s Director of Health Policy, State Government Affairs. “Legislators are being asked to make some hard choices, and we believe NPs can help inform them,” she says. “What we’re looking at is both short- and long-term solutions that we can offer legislators.”

Florida is one state where legislators appear to be getting the message that NPs and PAs can be part of the solution to Medicaid and other health care woes. On December 30, 2010, the state’s Office of Program Policy Analysis and Government Accountability (OPPAGA) released a research memorandum called “Expanding Scope of Practice for Advanced Registered Nurse Practitioners, Physician Assistants, Optometrists, and Dental Hygienists.” In the paper, the OPPAGA estimates the “potential cost-savings from expanding ARNP and PA scope of practice” in the state at $339 million across Florida’s health care system. This includes savings of $7 million to $44 million annually for Medicaid, and of $744,000 to $2.2 million for state employee health insurance.

The OPPAGA’s memorandum does not provide recommendations but does outline factors that impact utilization of NPs and PAs in Florida. Florida, for example, is one of two states that do not allow ARNPs and PAs to prescribe controlled substances (Alabama is the other for NPs and Kentucky for PAs). The report also includes the observation that “Florida law neither prohibits nor requires insurance companies and managed care companies to allow ARNPs and PAs to bill them directly.”

Whether this report translates into political action remains to be seen, but it is an illustration of a general principle. “If we could utilize clinicians to the highest level of their education and skill, we would save the system money by reducing some redundancies that are occurring,” Kopanos says, “and glitches that patients face in their care because we are not utilizing people effectively.”

At the federal and state levels, AAPA and AANP are continually working to improve the recognition of PAs and NPs and their inclusion in various programs. For AAPA, having PAs added to the category of mandated (as opposed to “optional”) providers through the Centers for Medicare and Medicaid Services (CMS) is “an ongoing legislative agenda item,” Powe says.

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