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Supreme Court Battle Brewing Over Medicaid Fees

Doctors seek higher payments

Rita Gorenflo’s 7-year-old son Nathaniel was in severe pain from a sinus infection. But since the boy was covered by Medicaid, she couldn’t immediately find a specialist willing to see him. After days of calling, she was finally able to get Nathaniel an appointment nearly a week later near their South Florida home. That was in 2005.

Last month, ruling in a lawsuit brought by the state’s pediatricians and patient advocacy groups, a federal district judge in Miami determined Nathaniel’s wait was “unreasonable” and that Florida’s Medicaid program was failing him and nearly 2 million other children by not paying enough money to doctors and dentists to ensure that the children have adequate access to care.

According to a report from Kaiser Health News, the Florida case is the latest effort to get federal judges to force states to increase Medicaid provider payment rates for the state and federal program, which covers approximately 70 million low-income Americans. During the past two decades, similar cases have been filed in numerous states, including California, Illinois, Massachusetts, Oklahoma, and Texas –– with many resulting in higher pay.

But while providers and patient advocates nationwide hailed the Florida decision, they are deeply worried about a U.S. Supreme Court case that they say could restrict their ability across the country to seek judicial relief from low Medicaid reimbursement rates.

On January 20, the high court will hear a case from Idaho seeking to overturn a 2011 lower court order to increase payments to providers serving Medicaid enrollees with developmental disabilities. In the original case, five centers serving developmentally disabled adults and children argued that Idaho was unfairly keeping Medicaid reimbursement rates at 2006 levels despite studies showing that the cost of providing care had risen.

Idaho officials argued that only the state and federal governments should be able to set provider fees in Medicaid and that all other “private parties,” including patients and providers, should not be able to use the court system to gain higher rates. Twenty-seven states and the Obama administration are supporting Idaho’s appeal, along with the National Governors Association.

But providers and patient advocacy groups say they need to use the courts because states too often place their budgetary needs over the need of Medicaid patients to have adequate access to doctors and hospitals. Low rates inhibit doctors, dentists, and other providers from participating in Medicaid, they say.

“Without recourse to the courts… hospitals and other providers will continue to bear losses that, for some, are unsustainable,” the American Hospital Association said in a brief filed in the Supreme Court case.

Although federal law says provider payments should be sufficient for Medicaid recipients to have the same access to services as those with private insurance, advocates say in court papers that the federal government is “a paper tiger” when it comes to enforcement.

Battles over rates paid by Medicaid, the nation’s largest single health program, are nothing new. Access issues have gained more attention recently, however, because 27 states have expanded eligibility under the Patient Protection and Affordable Care Act, resulting in the enrollment of millions more people.

Matt Salo, executive director of the National Association of Medicaid Directors, said patients and providers already have the ability to lobby state and federal governments to raise reimbursement rates.

“These lawsuits result in a massive expenditure of states’ limited resources,” he said. “There are more appropriate avenues for them to get their concerns across than dragging state Medicaid agencies to court.”

If Idaho wins its appeal to the Supreme Court, the decision could severely limit such suits, legal experts say.

A federal study in November 2014 found that millions of low-income children were failing to get the free preventive exams and screenings guaranteed by Medicaid.

The report, by the Department of Health and Human Services’ Office of Inspector General, found that 63% of children on Medicaid received at least one medical screening in 2013, up from 56% in 2006, but the figure was still far below the department’s goal of 80%.

Source: Kaiser Health News; January 12, 2015.


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