Medicaid Cuts Offer Lesson in Practice Economics 101

Governor Beverly Perdue’s announcement in late August to roll back a pending cut in Medicaid provider rates was welcome news to thousands of North Carolina physicians. Had the 1.35% cut in Medicaid physician payments been implemented, it would have sent another financial shock wave through practices already stressed by previous reductions and declining revenue. (Read “Governor Addresses NC Medicaid Rates,” Bulletin, Aug. 27)

NCMS Board Member Robert Monteiro, MD, said Medicaid cuts already in place cost his New Bern practice $60,000 in 2009.  Had the additional cut been imposed, it would have increased his cost by about $20,000.

But the impact goes beyond those numbers.

“Medicaid patients have a high `no show’ rate,” Dr. Monteiro said. “This means the practice loses money because they are unable to see other patients who can pay or are covered by commercial insurance carriers. Further cuts in Medicaid physician reimbursement adds to the cost of seeing Medicaid patients who traditionally require more time due to chronic illness and multiple medications.”

Dr. Monteiro calculated that if all the Medicaid patients seen by his practice, which includes 35 physicians and six extenders,  had been reimbursed at Medicare rates, it would have added more than $500,000 to the the revenue available to cover practice costs. In 2009, 6.5% of patient visits to Dr. Monteiro’s office were Medicaid patients. He said that it is economically not feasible to see more Medicaid patients, so the practice must limit Medicaid appointments in order to see Medicare and commercially covered patients and cover practice costs.


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1 Comment

  • Governor Purdue should not implement any cuts in any free medical care to providors, especially since NC is getting so much free money from the federal government.
    Cutting Medicaid simply forces the supply of medical care to dry up.
    It also indirectly puts pressure to increase billing rates on private pay.
    Private health insurance is a direct victim of government run healthcare, both Medicare and Medicaid!