Doctors resist new Medicaid contract

By Carol M. Ostrom
Seattle Times staff reporter

At a recent forum on health care in Bellingham, Dr. Erick Laine, CEO of Whatcom County’s largest multispecialty physician group, flashed numbers onto a screen.

Doctor’s overhead cost for a routine follow-up office visit: $41.76.

Reimbursement from the state for that visit by a Medicaid patient: $29.66.

For Madrona Medical Group, the numbers show, in stark relief, why these 55 doctors, like others around the state, may refuse to sign a new state contract required to bill patients on Medicaid, the joint state-federal health-insurance program for low-income residents.

"You don’t have to be a rocket scientist to do the math," Laine said. "We’re losing money to provide services to Medicaid patients."

Around the state, medical groups are eyeing the new contract with some degree of distaste. Some cite problems with the contract itself. But for most, the contract has become symbolic — a lightning rod for their increasing fear that they are risking their practices’ financial health by accepting patients with reimbursements below costs.

In Seattle, Proliance Surgeons, a group of 124 general and orthopedic surgeons, already has formally resigned from the Medicaid program. Another group, the Seattle Orthopedic & Fracture Clinic, will merge with Proliance at the first of the year and will be bound by the group’s decision, said Proliance CEO David Fitzgerald.

The decision means that about 28 percent of the orthopedic surgeons in King, Pierce and Snohomish counties will not provide services to patients on Medicaid unless the patients can pay privately or it’s emergency care.

For emergency-room care, Fitzgerald said, doctors will work for free.

"It’s cheaper to do uncompensated care," Fitzgerald said, because the group can skip billing and much other paperwork.

The turmoil among the ranks of physicians began several months ago when the state put forward a new version of the Medicaid provider contract, which had not been updated since the 1980s. Doctors are required to sign the new contract in order to bill the state for services provided to Medicaid patients.

Doug Porter, assistant secretary of the state’s Medical Assistance Administration, said the federal government required that the contract be updated. But doctors began complaining loudly, and the Washington State Medical Association confronted the state over what it believed were offensive contract provisions.

"It doesn’t matter if the doctors are in Bellingham or Omak or Port Townsend — they’re all madder than hell about the Core Provider Agreement," said Tom Curry, CEO of the Washington State Medical Association.

Porter said he’s concerned about the doctors’ dissatisfaction.

"I have personally devoted a lot of time working with the Washington State Medical Association and the (state) hospital association, trying to sort out what is an attitudinal problem and what is a substantive problem," said Porter.

Porter said many of the contract provisions that providers deemed most onerous have been tweaked. He will invoke the state’s emergency rule-making power, for example, to restore a mutual hold-harmless clause that the doctors thought provided some legal protection.

In addition, the Medical Assistance Administration moved the deadline for signing from last Saturday to March 31.

"This wasn’t meant to be a challenge at all," Porter said. "I’m not trying to force doctors out. I want every single one to re-up. But my attitude is: If doctors aren’t going to participate in the program, if we have access problems, we need to bring that to the attention of the governor and the Legislature."

As of last week, about half the 18,000 contracts had been signed, said Jim Stevenson, communications director for the Medical Assistance Administration. Some of those contracts represent a group or other billing entity, however, so it’s not yet clear how many individual providers might be represented by contracts yet to be signed.

Depending on which groups or doctors refuse to sign, trouble could be ahead for Medicaid patients in particular geographic areas or for those seeking particular specialists.

For Proliance, the contract itself wasn’t the real issue.

"It just happened to be the straw that broke the camel’s back," Fitzgerald said.

Ultimately, it was those stark numbers, he said, that caused the group to refuse to sign. "It would be cheaper for us to hand (Medicaid patients) a $10 bill and say, ’Thanks, go away.’ "

For Proliance, Medicaid patients make up only about 2.5 percent of patient load, he said.

At Madrona Clinic in Bellingham, by contrast, Medicaid patients make up about 13 to 15 percent, Laine said.

Some doctors will have to sign, Curry said, despite the agreement and the reimbursements. "If you’re rural, and 50 to 60 percent of your patients are on Medicaid, you’re hamstrung."

In Bremerton, Dr. Brian Wicks, president of the Doctors Clinic of Kitsap County, a 55-doctor multispecialty group, said his group would sign the contract.

"We’re geographically isolated. ... We don’t feel we can leave all those patients affiliated with DSHS (the state Department of Social and Health Services) out on a limb," he said.

But, he added, the clinic will limit Medicaid patients.

"I don’t know anybody who has their doors open for DSHS — they’re restricting access in some way. They have to."

Fitzgerald, at Proliance, said the doctors’ fight is actually not with the state, but with the federal government over Medicare reimbursement — a benchmark that is used by Medicaid and even private insurers to set rates. "We blame Medicare," he said. "The system’s broken. This is the only way doctors can respond — with their feet."

Even after March 31, it may not become immediately clear whether access for Medicaid patients has become dangerously curtailed. Some doctors may sign but, like the Bremerton clinic, limit Medicaid patients.

At Madrona, in Bellingham, doctors in primary care, internal medicine and pediatric practices stopped seeing new Medicare and Medicaid patients last spring. But, Laine said, attrition may not be enough, and the debate inside the practice has been difficult for the doctors.

"Unfortunately, we’re confronted with a choice of going out of business or withdrawing services from patients who need them most," he said. "This is simply antithetical to most physicians."

But, he added: "We have serious concerns about the consequences of accepting Medicaid on our group’s ability to stay in the business of providing health care to anyone. We are obliged to take that seriously."

Carol M. Ostrom: 206-464-2249 or costrom@seattletimes.com.

Copyright © 2002 The Seattle Times Company