Will Michigan Medicaid changes hurt both patients and providers?

Medicaid funding is a confusing and complex subject, which I will not pretend to understand completely. It is a shared state and federal program where the federal government matches state money according to a formula that varies from state-to-state and year-to-year, depending on the state's economic condition and need. Michigan is very needy, indeed.

According to an article in the Detroit Free Press, May 9, 2009, the increasing number of people in Michigan eligible for Medicaid has increased the state's share of federal stimulus funding. The state, however, will not spend that money on increasing funding to Medicaid providers, but will instead slash reimbursement rates by 4% to providers of Medicaid services. The result will likely be a decrease in the number of doctors who will accept Medicaid patients.

The article cites interesting statistics that raise questions about whether Michigan is doing more harm than good in trying to control costs by cutting fees to providers:

• According to the Michigan Medical Society, the state reimburses doctors 61 cents for every dollar of service they provide. Decreasing that amount by 4%, as the Governor has ordered, will probably result in fewer doctors taking on Medicaid patients. [Several years ago the state eliminated preventive dental care for adults as a cost-saving measure. By the time the benefit was reinstated and reimbursement rates were reduced, the number of dentists that would serve Medicaid patients had significantly decreased.]
• Medicaid participation by doctors decreased from 88% in 1999 to 64% in 2005, the last year surveyed. The number of residents covered by Medicaid has risen every year since 2000 with a 10% increase over the last year.
• One out of every 6 Michigan residents qualifies for Medicaid. Children qualify more easily for Medicaid than adults: if their family income is 150% of the federal poverty level, they are generally eligible.
• According to the article, the drop in reimbursement rates will cost Medicaid providers "...$5.3 million in state payments and about triple that in federal matching funds between now and Sept. 30. The state also will pay about $7.7 million less to Medicaid health plans."

To qualify for the federal recovery funds, the state cannot change eligibility for Medicaid, but the Governor's executive order will cut $3.3 million from Medicaid that will end payments for dentists, podiatrists, chiropractors, and optometrists for the next five months.

Generally, people with developmental disabilities need more specialized care. Reducing the number of doctors who are willing to accept their medical insurance (Medicaid) will surely result in some people not receiving the care they need or reducing the quality and adequacy of care that is provided. The Governor has always promised to protect the most vulnerable of Michigan's citizens, even during the state's most dire economic times. While the state can technically say that it is still providing services to these citizens it is setting the stage for further decline in the state's system of care for people with developmental disabilities.

Year after year, the Michigan Legislature and the Governor resolve their bickering over budget deficits with quick fixes. This year and next year the state will use its federal recovery funds to delay dealing with the state's structural deficits, especially with Medicaid and mental health funding. The difficulty the state is having economically cannot be underestimated, but at least the state might spare us the sanctimonious platitudes about never doing anything to hurt vulnerable people.