Physicians blast state for new Medicaid agreement

The state’s Medicaid program is requiring physicians to sign a new core provider agreement, a change that apparently has upset many doctors.

Physicians treating Medicaid patients and receiving service fees for doing so must sign the new agreement by Nov. 30.

For Proliance Surgeons Inc., a Seattle-based medical group with some 120 general and orthopedic surgeons, the new agreement was the final straw.

"We’re not signing, and we resigned effective Nov. 1," said Proliance CEO David Fitzgerald.

Fitzgerald said the new Medicaid agreement raised questions about liability and reimbursement, among others. The Washington State Medical Association lists eight contract issues and briefly discusses them on its Web site, at http://wsma.org.

"Physicians, practice managers and hospital executives have expressed significant frustration and concern" over the new agreement, the WSMA says.

The new agreement, for instance, lacks former provisions explaining physician rights, deletes reference to the rate of interest on late Medicaid payments, and requires physicians to indemnify and "hold Medicaid harmless from all liability due to acts or omissions by the provider or his/her subcontractors, not limited to negligence," WSMA says.

No longer treating Medicaid patients means less revenue for Proliance Surgeons, but it also means less net loss. Fitzgerald said Proliance was spending more on treating Medicaid patients that it was receiving in service payments from the state.

Many physicians have been deeply unhappy with Medicaid for some time. Low reimbursement has been the main source of disgruntlement.

"This is an offensive reminder that the department not only pays less than the cost of provider services, it also never misses an opportunity to offend its physician network," said WSMA executive director Tom Curry about the new agreement.

Surveys by the medical association have found that more physicians have been refusing to accept new Medicaid patients.

"I get the feeling that the erosion is going to quicken now," Curry said.

The Medical Assistance Administration, the Department of Social and Health Services unit that administers Medicaid, does not know how many other physician practices are dropping out of Medicaid as a result of the new core provider agreement.

"I think this new agreement is an opportunity for fence-sitters finally to leave the program," said DSHS Assistant Secretary Doug Porter.

Porter said he met with representatives of the medical association and Washington State Hospital Association to discuss the issues. Most of them, he said, pertained to deletions in the old contract, but the substance of these provisions are in various state statutes and regulations, so physicians still retain the same rights and protections.

The overall aim of drafting a new agreement, Porter said, was to clean up the contract in such a way that Medicaid would not have to revise it again. In the future, changes in pertinent statutes and regulations will be incorporated in the contract by reference.

Physicians across the state have voiced discontent with service payments from both Medicaid and Medicare. The Washington State Medical Association recently issued a statement asking Congress to fix the problem.

"Because of government errors in calculating the Medicare payment formula, America’s physicians and health care providers took a 5.4 percent cut in 2002," said WSMA president Dr. Maureen Callaghan. "And they are now facing an additional 12 percent in cuts over the next three years — including 4.4 percent effective Jan. 1.

"As a result," Callaghan said, "physicians may have no choice but to cut back on the number of Medicare patients they see, because they have a responsibility to the rest of their patients to keep their practices open."

There’s been a lot of talk generally about the prospect of businesses shifting more health-care costs to employees. A recent survey by Kibble & Prentice of 600 Puget Sound companies with 100 to 1,000 employees confirms the trend here at the local level. Nearly 230 companies responded to the survey.

Depending on the market sector, 22 percent to 31 percent of the responding firms indicated plans to reduce company contributions to employee premiums, according to survey results. That’s up from 10 percent to 12 percent planning on similar reductions in last year’s survey.

"Cost containment has supplanted employee retention as the key driver of employee benefit packages, which is no surprise in our current economic environment," said Kibble & Prentice president Dale Cowles.

Based in Seattle, Kibble & Prentice is a financial services and insurance brokerage firm.

The survey also found that many companies are increasing deductibles, copays and coinsurance levels.

Survey results, however, showed that companies in this region provide similar benefit packages. Most continue to offer benefits that include medical, dental, vision, life insurance, long-term disability coverage and 401(k) plans.

Traditionally, neurosurgery has been an inpatient hospital service. In Puyallup, there’s now an outpatient alternative.

The recently opened Brain & Spine Center is a free-standing facility staffed and equipped to provide neurosurgical and interventional pain services, and microsurgical and minimally invasive spine procedures in an outpatient setting. The center claims to be the first of its kind in the Northwest.

Reach Peter Neurath at 206-447-8505 ext. 130 or pneurath@bizjournals.com.