On Tuesday, the human services committee passed a bill that would provide the broadest increases to the state’s Medicaid reimbursement rates for physician services in over 15 years.
“This might be one of the most important things we’re talking about right now in this entire legislative session,” said Rep. Michelle Cook, D-Torrington, during the committee vote on the measure. “We’ve heard begging and pleading on the increase of rates, and if we do not increase rates, people are going to go without services, people are going to go without care that they need.”
Medicaid, known as HUSKY in Connecticut, provides health coverage to people with incomes below certain thresholds. Over a quarter of Connecticut residents currently receive coverage through the Medicaid program.
The proposal, House Bill 6885, would, among other measures, increase the payment that physicians receive for services they deliver to patients on Medicaid by, eventually, bringing them in line with the rates paid by the Medicare program. Medicare is the federal program that provides health coverage for people 65 and older, as well as others, and, in general, pays providers much more than Medicaid.
Specifically, the proposal would increase the rates for physician services to 70% of the Medicare reimbursement rate by June 2024 and then up to 100% of Medicare by June 2028.
“This, to my knowledge, would be the first time the state has not only done an across the board, all physician and other practitioner rates [increase], but also the first time that they’ve proposed legislation to get to 100% of Medicare,” said Mark Schaefer, a vice president with the Connecticut Hospital Association, in an interview with the CT Mirror.
“That is a major policy change,” he added.
“To the extent that we’ve provided adjustments, it’s been based on who’s had the most persuasive lobbyists, which seems like a really bad way of making the adjustment,” said Sen. Matt Lesser, D-Middletown, in an interview. Lesser drafted the bill with his co-chair on the human services committee, Rep. Jillian Gilchrest, D-West Hartford.
Even though Medicaid is a federal program, it’s managed at the state level, and each state has different rules dictating who qualifies and how much to pay providers.
Connecticut’s reimbursement rates paid to most specialists, like cardiologists and dermatologists, rank among the lowest in the nation, meaning that doctors and other care providers here receive less than most of their peers in other states to treat patients with Medicaid.
In 2007, Connecticut set the Medicaid reimbursement rates for most physician services at 57.5% of the Medicare rate at the time. The rates have not been broadly adjusted since, meaning that many practitioners in the state receive Medicaid payments that are pegged to Medicare rates from 16 years ago, though certain providers, including primary care physicians and OBGYNs, have received rate increases.
“Low rates paid to providers are starving the care delivery system of essential resources,” Schaefer told legislators during a public hearing on the bill last week.
‘I predict disaster’
During the bill’s public hearing, several physicians also testified to explain how the low reimbursement rates can force them to see fewer patients on Medicaid or, in some cases, stop seeing them altogether.
Cara DeBenedictis is an ophthalmologist specializing in pediatric eye care. One of her offices is located in Waterbury, where, last year, nearly 90% of the population was enrolled in Medicaid. DeBenedictis said she is the only pediatric eye specialist accepting Medicaid in the area.
“If I can’t see them, many of those children don’t get seen at all, or there is a huge delay in care that can cause significant problems for them later in life,” explained DeBenedictis. But she recently made the difficult decision to limit the number of Medicaid patients she sees because the low reimbursement rates made treating them financially unsustainable for her private practice.
DeBenedictis said her situation is far from unique.
“If they haven’t already, most doctors are either going to stop taking Medicaid altogether or drastically reduce their numbers,” said DeBenedictis. “Within a few years, I predict disaster.”
But, she said, if the bill passes, she wouldn’t need to maintain restrictions around whom she can afford to treat.
“If the Medicaid rates were increased to at least the Medicare rates, I’d be able to see those patients now. I would just open the floodgates and let them all in,” DeBenedictis told legislators.
The bill would also increase Medicaid reimbursement rates for emergency transportation services, add five school-based services to the list of services covered by the program and require DSS to conduct a study on reimbursement rates for long-term acute care hospitals and methadone treatment centers.
‘It’s a mess’
One of the few voices of opposition to the bill came from the Department of Social Services.
The department would prefer that the state first conduct a study on current rates before moving forward on actually increasing the rates themselves.
A primary concern is that DSS doesn’t currently have a consolidated dataset of Medicaid provider types and their corresponding Medicaid reimbursement rates, and that would be necessary as a baseline “for a more comprehensive and well-informed approach to provider rates and fee schedules,” according to written testimony submitted by commissioner Andrea Barton Reeves.
During the bill’s public hearing, Gui Woolston, the Medicaid director at DSS, admitted that when he first joined the department about a year ago, he asked for a list of all provider types and the Medicaid reimbursement rates they receive as a percent of Medicare. He quickly learned that putting together that type of database is “more complicated than one might think.”
“If I’m being totally honest, our process for setting those provider rates … is not systematic,” said Gui Woolston, Medicaid director at DSS. “Some providers have gotten increases, some haven’t. It’s a mess.”
The Governor’s recommended budget allocates $1 million in ARPA funding to hire a vendor to perform a “comprehensive Medicaid study” that would create a single source on all providers and the rates they receive, which DSS urged legislators to approve now and hold off on actually increasing rates until the study is completed.
“If I had a fixed budget to spend on changing rates for Medicaid providers, I would want to think carefully and systematically across the whole program,” said Woolston when asked why the legislature should wait for a study instead of just increasing the rates immediately. Woolston said some provider types who may also be in need of rate increases would be excluded under the proposed legislation but could be included in future increases if a more thorough study were conducted first.
Woolston raised other issues with the bill, including that several Medicaid providers may not have corresponding Medicare rates, which would complicate using Medicare as a benchmark for the increases. He also noted that most states pay less for Medicaid than they do for Medicare, and bringing the rates in line here in Connecticut would actually make the state an outlier.
But Woolston agreed that current reimbursement rates have prevented some patients from getting the care they need.
Lesser asked Woolston about the impact on patients of using outdated Medicare as the benchmark for specialists’ Medicaid rates today.
“Have we seen access issues for folks accessing specialists due to the erosion of those rates?” asked Lesser.
“We have, yes,” responded Woolston.