States get a little Medicaid help, but picture still bleak

The outlook is bright for physicians in Oklahoma for now, but other states could face further payment cuts.

By Joel B. Finkelstein, AMNews staff. Jan. 26, 2004.

Washington -- Bucking the national trend, Oklahoma Medicaid plans to increase rates for physicians, but the change is likely to be short-lived unless states are given more help with their program costs this year.

Oklahoma was able to increase rates for primary care physicians with the help of its share of $10 billion in enhanced federal Medicaid matching funds. The increased match, enacted by Congress last year, is being applied to claims filed between April 2003 and June 2004.

The state's primary care physicians now will get paid 90% of the Medicare rate for many services. But many specialists, such as emergency department physicians and pediatricians, were left out of the mix.

The Oklahoma State Medical Assn.'s enthusiasm for the increase was tempered by the exclusion of some specialties, said Jimmy Durant, director of state legislative affairs. Ultimately, the goal is to bring Medicaid up to Medicare rates, he added.

Even with the temporary federal funding increase, most states are finding it difficult to reverse cuts they have implemented over the past few years. Some are still prepared to enact rate reductions that were planned before the increased match legislation was proposed.

Based on cuts last year and those planned for this year, an estimated 1.2 million to 1.6 million Americans will be dropped from the Medicaid rolls, according to a Center on Budget and Policy Priorities analysis.

"The ripple effects of these cuts will be felt across the states," said Leighton Ku, a senior fellow at the center. "Most of the people who lose public coverage will become uninsured."