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Increase in Medicaid Payments Under ACA to End

Doctors and hospitals throughout Wisconsin are bracing for a steep cut in Medicaid reimbursements, and there are fears the lower payments could reduce the quality of care.

Under the Affordable Care Act, Medicaid payments for primary care services increased in 2013 and 2014, but those hikes expire when 2015 arrives at midnight.

The Urban Institute, a non-partisan research group, says Medicaid payments to providers in Wisconsin will go down 46 percent starting Thursday. The reduction comes after two years of higher payments the Affordable Care Act provided.

Elizabeth Cliffe Kucharski is director of government relations and advocacy at Wheaton Franciscan Healthcare. She says Wheaton used the increased payments to hire more practitioners and add services for patients at St. Joseph Hospital in Milwaukee.

“It really supports our ability to provide primary care in Milwaukee County and across our service area to those that are most in need and the most vulnerable populations,” Kucharski says.

Enrollment in Medicaid – or BadgerCare as Wisconsin calls its program – swelled during the Affordable Care Act rollout. Many low-income people who sought a plan on the new federal exchange discovered they qualified for Medicaid. In Wisconsin, nearly 1.2 million people are enrolled. Nearly 316,000 live in Milwaukee County.

Kucharski says with Medicaid payments returning to lower levels, hospitals will have less to invest in those patients.

“You know, primary care isn’t just about seeing a physician. It’s about developing a relationship with that physician. It’s about managing chronic diseases and keeping patients out of the emergency room, which is a less effective way to receive and deliver care,” Kucharski says.

“We’re worried that this, in even a small way, will reduce the access that patients will be able to have to get this important care,” says Kevin Kane, executive director of Citizen Action of Wisconsin, a liberal advocacy group.

The state budget sets Medicaid reimbursement levels, and Kane says Wisconsin has set its payments far below the actual cost of delivering care. The imbalance has left hospitals in underserved areas with lots of unpaid bills. Providers try to make up the difference by building those costs into the price of healthcare for everyone else.

Kane says the bump in payments in 2013 and 2014 allowed some providers to see more Medicaid patients, but now the opposite could happen.

“A lot of doctors, while they mean well, there are obviously limited resources in this world and they may have to prioritize patients who are able to get perhaps higher reimbursement levels. It’s not usually something that doctors do intentionally, but to make ends meet, they often will do so,” Kane says.

Dr. Ian Gilson, an internal medicine physician with Froedtert and the Medical College of Wisconsin, says while some doctors could decide to take on fewer Medicaid patients, others may try to see as many as possible to meet expenses.

“But that doesn’t work, because you can’t provide good care that way. You know, you miss things or you rush and that just is not a good situation. So what the increase in reimbursement did was provide an incentive to spend more time taking care of these patients, which is a very good thing. And now that’s going away,” Gilson says.

Gilson serves on the council of the Wisconsin chapter of the American College of Physicians. He says it’s hoping Gov. Walker and lawmakers hike the state’s Medicaid reimbursement rate in the next two-year budget. Wisconsin’s rate has been about 27 percent lower than the national average.

The budget the state Department of Health Services has submitted to the governor does not include any increase in the state’s base reimbursement level.

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