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Many fear health cuts

Providers will quit, jobs will be lost, the poor will suffer, critics of Medicaid cuts say

By James Romoser

JOURNAL RALEIGH BUREAU

Published: November 16, 2009

RALEIGH

Deep cuts to North Carolina's Medicaid program are alarming health-care professionals, who say that health-care jobs will be lost and poor patients may not be able to get the care they need.

The $1.5 billion worth of cuts, many of which took effect this month, come at a time when a growing number of people are relying on Medicaid after losing their jobs -- and their private health insurance -- in the recession.

From radiologists to home-health aides, from major medical centers to mental-health agencies, the cuts affect virtually every area of the health-care system.

Even the state official in charge of enacting the cuts believes they will cause some private health-care providers to go under.

"I anticipate that there will be some providers that will go out of business," said Lanier Cansler, the state's secretary of health and human services. "You can't take one and a half billion dollars out of the health-care system and not expect changes to occur."

But Cansler also said the cuts are necessary. They were ordered by the General Assembly over the summer to help deal with a state budget crisis. Cansler said he is trying to use the opportunity to streamline Medicaid by reducing waste.

Medicaid, a federal program that provides health coverage to the poor, is paid for with a combination of state and federal dollars.

Many of the state's new cuts, Cansler said, are meant to stop extraneous medical procedures or to drop patients who may not meet eligibility requirements.

Depending on one's perspective, Cansler is either a bold reformer making Medicaid more efficient or a cold bureaucrat jeopardizing critical health services for thousands of poor people.

"My concern is that a number of providers may start saying to folks, ‘We're just not going to serve low-income residents anymore,'" said Evelyn Hawthorne, a lobbyist for the N.C. Assisted Living Association.

One reason that could happen is that the General Assembly reduced reimbursement rates -- essentially, the amount of money that Medicaid pays to health-care providers for particular services given to patients.

Many doctors and other providers complain that, even under the old rates, Medicaid reimbursements didn't cover the actual costs of providing many services. With the rates reduced even further, that problem has gotten worse.

In enacting the reductions, Cansler made sure that rates were not reduced evenly for all medical services. Rather, the state tried to minimize reductions for primary-care providers, such as family doctors.

But that means the cuts are deeper for specialists and other health services that are provided far from the doctor's office.

For example, in assisted-living centers, Medicaid-eligible residents can receive services that help with basic daily activities, such as eating and bathing. Hawthorne said that the state pays only a portion of the cost of those services. Assisted-living centers must absorb the rest of the cost in other ways, perhaps by eliminating other types of services or passing along the costs to private-paying residents.

Home-health workers say they also are threatened by cuts to services that offer support for daily tasks that help keep people in their home.

Those services will now be subject to stricter eligibility assessments and other regulations.

Tim Rogers, the chief executive of the Association for Home and Hospice Care of North Carolina, said that the restrictions may save the state a bit of money in the short term, but will end up costing more. That's because if Medicaid recipients lose home health care, they are likely to end up in nursing homes or other long-term-care centers, which are much more expensive than in-home care.

"You're cutting nickels and dimes while you're watching five dollars go out the door. And that doesn't help the budget deficit," Rogers said.

Another new Medicaid restriction targets radiological tests, such as ultrasounds, CT scans and MRIs. Starting this month, before a Medicaid recipient can get one of these tests, the test will have to be approved by a private management company that has a contract with the state.

Representatives of the company, Med Solutions, cited data showing that North Carolinians are subject to an unnecessarily high number of radiological scans, which can be dangerous because patients become exposed to radiation.

Radiologists and other doctors expressed concern that the new regulations are burdensome, and that some Medicaid patients may not get the scans they need. They also said that it will create more work for doctors to go through the process of getting each scan pre-approved.

"They're making physicians who are earning less per patient do more in order to get what's needed for the patient," said Dr. Valerie Jewell, the president of the N.C. American College of Radiology.

"And I'm very much concerned that physicians will throw up their hands and say, ‘I'm just not dealing with this anymore; they can just go to the ER.'"

That warning -- the prospect of health providers ceasing to serve Medicaid patients because of the state cuts -- was repeated by health professionals in various fields. But no one said they were aware of that happening yet.

Cansler said he is carefully monitoring the state cuts to watch for areas in which Medicaid patients might be losing access to care.

In addition to individual health providers, hospitals around the state say they will be hurt by the new state cuts.

Wake Forest University Baptist Medical Center, for instance, said that it expects the cuts to cause a revenue loss this year of up to $5 million.

Joanne Ruhland, the medical center's vice president of government relations, said the medical center is still working out how it will make up for the lost revenue.

jromoser@wsjournal.com

919-210-6794

State cuts to Medicaid come at a time when the number of people enrolling has steadily climbed amid the recession. This chart shows the number of North Carolinians enrolled in Medicaid in six-month intervals since 2006: