Medicaid among top state health issues

Increases in medical liability insurance costs, public health preparedness and patients' access to care also are attracting state lawmakers' interest.

By Tanya Albert, amednews staff. March 4, 2002.

Legislatures in 44 states are gathering in their capitals this year, with the majority of them set to look at the way they handle Medicaid reimbursement rates and public health.

The six state legislatures that don't meet this year -- Arkansas, Montana, Nevada, North Dakota, Oregon and Texas -- are preparing to go forward with similar issues when they convene in 2003.

Health care on the agenda
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"Health care is going to be the top issue because it involves a large amount of dollars in the budget," said Lee Dixon, director of health policy tracking services for the National Conference of State Legislatures. "Medicaid is one of the largest items in the budgets."

42 states expect Medicaid budget shortfalls this year.

In addition to budget concerns, mandated insurance benefits and access to health care also are hot topics this year, according to the NCSL's 2002 State Health Priorities Survey.

Many states plan to address issues that directly impact physicians' bottom lines, according to the survey. Five states plan to discuss collective bargaining for physicians, 16 plan to talk about prompt-payment revisions and several states are debating measures to address rising medical liability insurance rates.

Medicaid crunch

With state budgets shrinking because of the economic downturn, 42 states say they will be forced to address a Medicaid budget shortfall this year. Twenty-eight of those states expect to consider cuts in the Medicaid benefit package.

"That's the No. 1 issue out there," Dixon said. Medicaid programs account for about 20% of state budgets, with only elementary and secondary education requiring a bigger chunk of money, according to the NCSL.

States are taking a variety of approaches to addressing their Medicaid funding problems. For example:

28 states are likely to consider cutting Medicaid benefits.

Thirty-nine states say they will try to maximize their federal Medicaid payments.
Thirty-three are looking at using Medicaid waivers.
Thirty-seven states plan to review reimbursement rates.

In Illinois, Gov. George Ryan has control over the state Medicaid budget, and he's already instituted across-the-board cuts to make up for budget shortfalls. On Feb. 1, physicians, hospitals and others offering Medicaid services took a 3% cut. The state also imposed a $1 co-pay for Medicaid visits for all patients except children younger than 12 and pregnant women.

Illinois State Medical Society President Ronald L. Ruecker, MD, said the organization is working with the governor's staff and the state Legislature to remind them that they still have access to tobacco money that can be used for Medicaid. The medical society also is supporting a 75-cent tax on cigarettes that would go toward health costs.

"As you cut reimbursement rates that are already woefully low, you are going to create access issues," Dr. Ruecker said.

Access to care, emergency readiness

While states are trying to figure out how to make the most of fewer dollars in the tight economy, they are also seeking to find ways to improve patients' access to care and to shore up the public health system.

Thirty states are expected to address pharmaceutical assistance programs, and 34 are looking at drug rebates and discounts, according to the NCSL.

Lawmakers in several states also say it is important to require insurance coverage for certain services. According to the NCSL, 23 states will address mental health parity, 20 states will consider cancer screenings, 17 states will address diabetes and 10 states will look at osteoporosis.

And after the nation got a glimpse on Sept. 11 of how important it is for the public health system to work smoothly, a majority of states are planning to update their public health codes and to start restructuring their emergency response systems.

Twenty-nine states plan to modify or expand their definitions of reportable diseases to include chemical or biological incidents. Lawmakers in 27 states said expanding public health officials' authority over quarantine and isolation was important, and lawmakers in 22 states said public health personnel training, state laboratory regulation and data collection are high priorities.

"The states have taken a leadership role in this because the federal government hasn't," said Richard Levinson, MD, DPA, the American Public Health Assn.'s associate executive director. "What is needed is some overall federal direction. If each state does it alone, you are going to get a hodgepodge."

Medical liability

Easing physicians' soaring medical liability rates is an emerging issue on state legislative agendas.

Pennsylvania's Legislature in February was debating bills in an attempt to stabilize insurance rates. When the Legislature broke for the Presidents Day holiday, the House passed an amended bill that included patient safety improvements and methods for reducing and ultimately phasing out the state's Medical Professional Liability Catastrophe Loss Fund. The bill also would give patients a choice of receiving a lump sum award at present value or over a period of time. The Senate, which already amended the House version of the bill once, will not vote on the newly amended bill until it reconvenes on March 11.

If the bill is passed as it now stands, "it will be great in two to five years, but I don't think it is going to avert a crisis right away," said Pennsylvania Medical Society President Howard A. Richter, MD, a neurosurgeon.

In Mississippi, a bill made it through the Senate Judiciary Committee but was not called up for a full Senate vote before the 2002 legislative session ended.

"It was democracy at its worst," said Vicksburg, Miss., family physician Randy Easterling, MD, chair of the Mississippi State Medical Assn.'s counsel on legislation. "In the next year we will see five, eight or maybe 10 counties lose obstetrics services."

Mississippi's and Pennsylvania's legislatures are the first to address the issue because areas of their states have been among the hardest hit in the nation. Texas and Arkansas are studying the issue. Their legislatures don't meet until next year.

In addition to working on federal legislation, the AMA is penning model state legislation that likely will be patterned after California's reform, which includes a cap on non-economic damages.

"When you compare results in California with the crisis in other states, you realize that proper tort reform keeps costs down and lets patients have the recourse they need," said AMA President Richard F. Corlin, MD.

ADDITIONAL INFORMATION:

Health care on the agenda

Several health topics are hot in state legislatures this year. The number of states that will consider bills on key issues:

20 - Expansion of health care access
13 - Collective bargaining for physicians
13 - Direct payment to physicians not participating in a health plan
9 - Restrictions on Medicaid drug formularies
8 - Health plan liability

Source: Blue Cross Blue Shield Assn.