Doctors bicker with Gov. Perdue over Medicaid reimbursement

At issue: plan to save $26.6M by cutting Medicaid reimbursement 1.35%

Staff writerAugust 22, 2010 

A plan to cut reimbursement rates to doctors who care for the poor and disabled has led to a tussle between Gov. Bev Perdue and North Carolina physicians.

In the current state budget, Perdue and the legislature agreed that Medicaid reimbursement rates would be reduced by $26.6 million or 1.35 percent, if the state found it necessary to close a gap in federal Medicaid funding.

Perdue's office says the cut is now necessary. The doctors say the state has access to plenty of federal money and could use a $300 million federal education windfall to avoid cutting the rates.

Perdue's office pitches the debate as one between teachers' wallets and doctors' incomes.

"Are they suggesting that we take designated education money away from teachers and pay them instead?" said Chrissy Pearson, a spokeswoman for Perdue, a Democrat. "The state is in the business of trying to protect essential services in a very tough recession. We hope these providers will join us in understanding that we're trying very hard to find a middle ground between slashing services and balancing a budget."

Doctors groups say Medicaid rates are already low and that reducing them further will force doctors to accept fewer Medicaid patients.

"Most of the people covered in Medicaid are children," said Bob Seligson, chief executive of the N.C. Medical Society, which sent Perdue a letter last week urging her to reconsider the cut. "Do they want to take the money away from people who are in need of health care?"

Budget shortfalls

For two years, lawmakers and Perdue have had to cope with budget deficits brought on by the recession. Democrats control both the legislature and the governor's office, and they have generally chosen to spare education from the worst cuts while spreading the pain to other categories of state spending. The current budget included deep cuts to health and human services.

The current state budget counted on receiving $512 million in federal Medicaid money, and included a provision on where to reduce spending if that amount wasn't delivered by January.

Last month, Congress voted to send North Carolina only $343 million of the expected Medicaid money, but it added another $300 million in education funds the state had not expected.

Lawmakers and local school boards were happy to get the education money. State officials have said they plan to spend some of the money rehiring school employees who were previously laid off. They want to save the rest to deal with next year's anticipated $3 billion budget shortfall.

Cutting funding for Medicaid providers now would lead to greater costs later, according to Greg Griggs, executive vice president of the N.C. Academy of Family Physicians.

Primary care providers earn less than other doctors and are paid less for treating Medicaid patients. Running a practice is getting more expensive, he said.

The new health care law and the recession will lead to more people on Medicaid just when doctors will be able to afford treating fewer Medicaid patients, Griggs said. He warned that those patients eventually will seek health care in the emergency room - a much more expensive alternative to prevention.

"These are the family doctors doing the day-to-day care for our neediest citizens," Griggs said. "They're accepting fewer new patients, and access is more difficult."

The governor's office noted that North Carolina reimburses doctors at a higher rate than Virginia or South Carolina. Pearson said the hit doctors would take is pretty small.

"There has been a general squeezing on the wallets of, I would dare say, every North Carolinian since this global recession began," Pearson said. "State government has cut nearly 12 percent of our budget. We are asking 1.35 percent from the providers."

ben.niolet@newsobserver.com or 919-829-4521

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