NewsPoll: Medicaid becoming a cut-rate benefit

Thursday, August 4, 2011

YARMOUTH, Maine  Across the country its the same story: States struggling to close budget gaps are cutting Medicaid reimbursement, say respondents to the latest HME NewsPoll.

The overwhelming majority of poll respondents (71%) say state Medicaid programs have announced cuts to durable medical equipment for the next fiscal year.

"We will continue to be cut and cut until we stop accepting patients with those types of insurance," said one provider. "We keep saying we cannot make money at those rates, but if we keep providing at the new cut rate, why should they stop cutting?"

The dollar amount of the reported cuts varies from state to state, ranging from less than 3% (27%), 3% to 6% (26%) to more than 6% (47%). 

The majority of the reported cuts are across-the-board (67%), not for specific product categories (33%).

"All providers in the state of Hawaii are expecting an across-the-board cut of 3%," said Paul Gammie, owner of Gammie Homecare with locations on Maui and Kauai. "It sucks, but we will absorb it."

Others have it worse.

"Currently, the state of Texas is still debating whether to make 10% cuts across-the-board or to make deeper cuts to certain categories," said one provider. "This is in addition to 2% rate reduction cuts across the board since January 2011."

Texas isn't the only state where Medicaid rates are up in the air.

"New Hampshire Medicaid is attempting to take a lot of the HCPCS codes and pay out at 60% of Medicare's rate," said Tamme Dustin, director and CFO of Herron & Smith in Hooksett. "We as a group, through NEMED, are working with them to recognize the implications this may cause for access."

Providers in other states report small successes in working with their Medicaid programs.

"SCMESA was allowed to submit $4.5 million in (suggested) cuts to specific codes," said Dan Gooch, president. "The agency accepted our plan."

States are getting creative in other ways to find savings as well, say providers.

"Illinois is demanding in September that all repairs must be submitted with cost and MSRP from the manufacturer," said one provider. "They will add a small percentage to the cost, not including freight."

No matter the state, the product, or the cut, one thing's for certain, say providers: It's the beneficiaries who will ultimately suffer.

"We have already stopped taking that population," said one provider.