Medicaid Provider Rate Cut Implemented Oct. 1

Comments from physicians have poured in to the NCMS following the NC Medicaid announcement on Tuesday that it would make a 9% cut to all but 89 specific codes used by physicians and other providers caring for Medicaid patients. Physician reaction began just minutes after the NCMS issued a special Bulletin about the cut.

 The cuts went into effect October 1, 2009 and were part of NC Medicaid’s proposed State Plan Amendments to save over $200 million from medical services and goods over the next two years. NC Medicaid imposed the 9% cut in order to achieve $76 million of this savings this year. The Medicaid codes that have been protected will continue to be paid at 95% of Medicare.  The other codes will be slashed to an average of 86.5% of Medicare rates.  Hospitals that are not owned by the State of North Carolina will also be impacted with a 6% cut to their DRG. 

The decision to go in this direction is in part out of necessity and in part an attempt to protect the already fragile Medicaid provider network.  A vast number of billable services and providers are exempt due to legislative authority or federal funding stream before the targeted savings could even be discussed.  The savings has to be made up with only nine months remaining in the budget year.  This combination of exemptions and reduced timing has increased a 3% average impact to a nearly 5% average impact on the provider reimbursement rates.

NCMS and other physician groups have met with numerous state officials and offered complete accessibility to physicians for a dialogue about the proposed cuts.  This level of cut to the provider rate services was not discussed in advance.  NC Medicaid provided just a one day notice of the cut, which has the potential to end services for the most needy of our population. 

According to the Department of Health and Human Services (DHHS) almost 2 million recipients receive needed health and medical services through this program.  While some physicians may be able to choose whether to serve the Medicaid population, other physicians carry a disproportionate share of indigent patients within their medical practice.  This impact is most often felt in the rural areas of North Carolina.  Physician offices in those areas are dependent upon these rates to provide adequate staff and up-to-date technology and services to their patients.  When cuts like those announced by DHHS today, physician offices with a majority of Medicaid patients will be faced with closing their doors and sending those patients to the local emergency department or to other providers in the more urban areas.  Either way, patient care for the poor will be damaged.

The NCMS strongly opposes this cut.   NCMS needs you to carefully analyze the codes that are attached and provide us with the real life stories of how physicians and your patients will be impacted.  We need to hear from you directly in order to accurately portray this impact.  Please direct your comments to Chip Baggett at [email protected]

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  • Shawn Hocker

    As an orthopedic surgeon, this recent cut may make me start to refuse Medicaid patients. I do joint replacement on them now for almost no profit, but I can’t lose money in a private practice. This is a shame since joint replacement has always been shown to be cost effective to society…

  • Brian PARKES

    If you think this is bad
    get ready for the Baucus bill that will place 25 percent of the US population into Medicaid. The Feds will fund this for 2 years and the. Let the cost fall back on the states already ravaged by decreasing tax reciepts.
    This will almost force a 2’tier system to takenplace so practices can remain solvent