Should I take Medicaid?

When many ophthalmologists open their practice they wonder if they should be in network for Medicaid. No matter what the reimbursement is, when you’re not that busy some income is better than none, right? And you don’t want to make any primary care potential referring doctors upset by not taking Medicaid?

It depends on your state’s program- their reimbursement, how easy they are to deal with (some of them require prior authorizations for everything and deny many claims, even correctly coded and with prior auth), your patient population (I am in an upscale area but not very far from a Medicaid heavy zip code), and access to subspecialists in case you need to refer out. If you are a comprehensive ophthalmologist who has a patient that needs a vitrectomy for a diabetic vitreous hemorrhage and no retina specialist takes Medicaid you’re stuck.

Medicaid was created in 1965 and covers low income individuals and families, pregnant women, and the elderly and disabled. Eligibility is determined by family size and income. Obamacare (the ACA) expanded Medicaid from approximately 60 to 75 million people, by offering bonus federal funding that covered 100% of the expansion for the first few years. About 33 states chose to accept this and expand Medicaid to those who earn 133% of the poverty level. Here is an editorial about how states that expanded it are left struggling to pay for beneficiaries as the federal grant is reduced from 100% to 90%.

I’ll even provide an article with a counterpoint in favor of expanding Medicaid but my opinion is that just because you have a shiny new insurance card doesn’t mean you can get the care you need- if it is narrow network and few doctors accept your plan, if the plan doesn’t cover the drugs or subspecialists you need, if there is a long waiting period to be seen.

In many states, there is straight Medicaid as well as managed Medicaid (your state gives a sum of money per Medicaid beneficiary to a commercial plan, which administers benefits). These commercial plans then set up their networks of doctors and hospitals and pay claims. One point is Medicaid HMOs in places like California and Michigan pay higher and are not the same as straight Medicaid. You often need to be in a hospital network or IPA (Independent Physicians Association) to join this type of plan.

In AZ there are five commercial run Medicaid plans. The two biggest ones are Mercy care and UHC community plan. The three smaller ones are Care 1st, Health choice and Health net Medicaid. These three are very narrow network and it took some effort to get on. But I only see a few patients from these three smaller plans. Since I’m one of few in my area that takes them referring doctors hear about me this way.  Some referring doctors only send to me when the patients are on one of these plans and send to their “usual” ophthalmologist for other plans. I am not UHC community plan. They keep on denying me for their network. This hasn’t slowed the growth of my practice. Medicaid is about 10% of my patients.

As I said, just because I’m not in the UHC community plan, doesn’t mean primaries will stop referring to me. Same goes for Medicare advantage (Medicare replacement) narrow network plans dominated by big groups.  Some primaries will send patients with low paying plans to the big groups, the rest with traditional Medicare and other commercials to me.

Bringing a list of insurances and educating the referring coordinators on what plans and sub plans you’re in goes a long way. Getting patients seen in a timely fashion, sending notes back, and good results are what keep referrals coming. Not because you take every insurance plan but have a disorganized office or provide poor service.

All of the Arizona plans pay reasonably for office visits and surgeries. I should add that there are NO authorizations and they pay quick (2-4 weeks usually).  And no concern for my front desk about collecting copay or deductible. I’ve heard that in some states such as California and Florida, you need prior authorization for everything, claims get lost or denied, and if the claims are paid it takes months to happen. Ask around for other offices in your area for what their experiences are.

In other states, these plans pay a lot less, $50-80 for a new office visit (Medicare rates are about $150) and $350 for a cataract surgery (Medicare rates about $640).

The problem is that if reimbursements are so crappy, no one will want to be in network, leaving the few doctors that are in network to see all the patients. The lower reimbursements are and the higher the hassle factor is, the less doctors will be in network, leading to more Medicaid patients per doctor. Simple law of supply and demand. And no one wants their office over flooded with lowball reimbursement patients.

Let’s look at the bigger picture here. The government (through Obamacare) expanded Medicaid. Many exchange plans reimburse poorly, often similar to Medicaid.

What are we telling policy makers if we happily accept these rates?  That we are willing to be paid lower while drug companies and durable medical equipment companies and hospitals ask for more and more? Read this article about how this couple takes home $1 million per year as the directors of a managed Medicaid company. Sounds like a great job without medical school debt!

The government will be more than happy to let docs see these poor patients for reduced rates or free, yet pharma companies are out to get every last dollar from Medicaid. Many hep C patients on Medicaid can’t get treatment because pharma won’t give discounts on antivirals.

Then pharma goes ahead and start PR campaigns making the government look like the bad guys for withholding treatment from these poor patients who can’t afford it- and when they win, the money for the drugs comes from physician payment cuts… Why should doctors be the ones to make the sacrifice?

When you open doors, it’s more productive and better use of your time to figure out how to run your practice (learn your EHR and practice management system inside out, start marketing, learn billing) and build the practice you want. I don’t want to run around in a frenzy seeing 50 patients a day just to pay my overhead. While it’s possible to take Medicaid at first and then go out of network, if in your state the hassle factor of getting authorizations and payments is too high it may not be worth your time.

I ran the numbers- if my practice were 100% Medicaid, reimbursed at California or Michigan Medicaid rates, my salary would be $100,000. That’s still more than what 75% of households in the US earn. But why should doctors take the financial hit to subsidize drug companies, hospitals and their executives and administrators, and DME companies? When I went to school for way longer, carry more risk and liability and provide the care?

As I said, I do see Medicaid patients myself (even if the rate were lower I’d like to see a few, just out of principle to help the public) and do charity cases (Eye Care of America, cash pay patients that are obviously poor and can’t afford usual rates), but when I choose give free or discounted care, I prefer it to be my decision, rather than the government’s. In my opinion, doctors need to stick together and tell low paying plans to take a hike. If we happily take lower rates with a big smile, the bean counters will get all sorts of ideas on what the “new standard” of physician reimbursements should be.

If Medicaid doesn’t pay well in your state, stay away.

Leave a Reply