Doctors plan for Medicaid cuts, layoffs as budget remains stalled

Dr. Brent Siemens has run the math on what Oklahoma’s proposed Medicaid cuts would do to his four primary care clinics.

It’s not pretty.

Medicaid pays health care costs for people who can’t afford private insurance. It also covers many children and seniors who might otherwise go without a doctor’s visit. To take those patients, it costs $190,000 to $200,000 a month to run Allied Medical Group clinics in Oklahoma City, Midwest City, Moore and Bethany, Siemens said. Typically, he squeaks out a small profit, but the $15,000 in rate reductions he expects each month if the state’s budget situation doesn’t improve would push the clinics into the red, he said.

The state faces a $215 million budget deficit after the Oklahoma Supreme Court struck down the $1.50-per-pack cigarette fee. Gov. Mary Fallin called a special session to address the situation, but the Legislature isn’t meeting due to lack of consensus on a plan.

About $70 million of the missing funds were intended for the Oklahoma Health Care Authority, which administers SoonerCare, the state’s Medicaid program.

Part of the agency’s plan to fill that budget gap includes a 9 percent cut to most providers who accept Medicaid, which would save the state about $28 million — but cost it $40 million in federal funds linked to state appropriations.

SoonerCare rates already are low after multiple reductions in the last three years, Siemens said. The $87 payment his clinics receive for a typical office visit don’t cover the full cost of providing the care and keeping the office open, so he also relies on a $7-per-month fee for care coordination — services like calling patients to remind them they’re due for a check-up.

But that also will take a hit. OHCA expects to save about $2 million by stopping payments to providers if a patient hasn’t come in within the last two years, or more recently, in some cases. Siemens said his clinics’ coordinators sometimes struggle to track down patients and get them in, so he expects to lose some of those payments.

If the cuts happen as expected, he’ll have to shut down two of the clinics and lay off at least 10 employees, Siemens said.

“Those two cuts there, are basically the nails in the coffin,” he said.

Nursing homes hit by two cuts

At first glance, nursing homes appear to fare better than other Medicaid providers, but nearly half of the 301 facilities statewide could be in danger of closing, said Nico Gomez, president and CEO of the Oklahoma Association of Health Care Providers.

Long-term care facilities will take a 4 percent cut in their Medicaid reimbursements, which will save the state about $3.5 million, if the changes go through.

But they also stand to lose out if Medicaid stops paying some out-ofpocket costs for patients who also are eligible for Medicare, which would reduce state expenses by $1.5 million.

Medicare covers shortterm nursing home stays after a patient has been released from a hospital, after patients have met their deductible. SoonerCare pays part of the deductible and other out-of-pocket expenses.

Between the two changes, nursing facilities will lose about as much as other providers that face a 9 percent cut, Gomez said.

Rural homes will be particularly vulnerable to closing, potentially forcing residents to move a substantial distance from their families to find another bed, he said.

“You could move somebody maybe from Hollis, Oklahoma, to Oklahoma City,” he said. “If you’re in Sallisaw, it may be closer to look for a place in Arkansas. It will be very difficult decisions for these families.”

One-time funds dominate

More than half of OHCA’s planned savings, $36 million, comes from one-time sources, including drawing on leftover funds and putting off some expenses. The largest segment of the one-time fixes comes from pushing $22 million in payments scheduled for June into July, when they’ll fall under a new budget year. That strategy will pay off only if the Legislature comes up with funding for the next budget year’s expenses, as well as those left over from the current year.

The OHCA board has already approved about $3.3 million in cuts, including the care coordination change that worries Siemens. The agency also expects to save about $539,000 by ending members’ eligibility within 12 days when their income is too high to qualify for SoonerCare. Previously, members were kicked off at the end of the month.

The rest of the savings so far come from restricting dental coverage for adults to emergency tooth extractions, which is estimated to save about $479,000, and limiting tests to find out if parents carry the gene for cystic fibrosis, which would save about $255,000.

Dental charities have raised concerns that making it harder for adults to get a bad tooth pulled will lead to even more overcrowding at free clinics.

OHCA also has listed some other services it could cut or restrict, including breastfeeding education for pregnant women, nutritional consulting, genetic counseling and short-term stays in care facilities for people with intellectual disabilities.

Altogether, those changes would save less than $70,000, and they still would need board approval.

Whatever else the state does, it can’t keep cutting Medicaid rates, said Dr. Matthew Haag, who owns an independent practice in Oklahoma City.

Currently, SoonerCare pays him $88.59 for a 15-minute, basic visit with a Medicaid patient. From that income, he must spend $75 on business expenses.

If the 9 percent cut takes effect, Haag said, he would earn just $6 on each Medicaid patient, plus lose care coordination payments.

Haag said about 15 percent of his patients are covered by Medicaid, and while he doesn’t plan to stop Medicaid this year, he understands why some practices would.

Doctors with large numbers of Medicaid patients may have no choice, particularly if rates keep dropping, he said.

“Patients are going to have a tough time” finding a doctor, he said. “If they keep cutting it like this, I’ll probably bail out.”