Resistance to LA Medicaid reform to test Jindal resolve

By initial reactions, Louisiana will have to fight tooth-and-nail to bring efficiency to its bloated indigent children’s health care system – in the process demonstrating the utility of state reforms being pushed by the Gov. Bobby Jindal Administration.

As previously noted, in order to continue a program dealing with coordinating pediatric care under Medicaid the state has gone from a flat $3/patient/month fee to one ranging from $1.50 to $3.75, depending upon how well the providers meet four performance benchmarks designed to ensure efficiency in the system, including how good of a job doctors are doing with their patients. This is a big deal, as the vast majority of Medicaid service recipients are children.

Under the previous system, if they wanted to, pediatric groups had to make next to no effort for efficiency sake in order to collect the funds. Even regardless of how much effort they put into care, there was no link between their efforts and outcomes. It was not much better than the previous system where clients showed up at a doctor’s office, emergency room, or charity hospital and were treated, with reimbursements to providers paid with few or no questions asked.

But now the state is interested in asking questions, such as whether the level of care is necessary, whether it is done in a way to complement, rather than duplicate or conflict, other care, and whether it is being done in an effective way. Physicians now have to show whatever it is they are or are not doing is leading to enough acceptable outcomes. And while most recognize and accept this strategy, as evidenced by the support of medical groups and professional societies of the new plan, some balk at the realization the gravy train is over and they have to show results.

The most visible complaints surround one of the four metrics, becoming certified by the National Committee for Quality Assurance, a nonprofit group that oversees a widely-recognized set of standards indicating quality health care. It’s safe to say that those critical of this one do not meet these performance criteria, who argue it will cost considerably to get such accreditation to the point it will discourage system participation – even though the state says it will maintain payments at previous levels for awhile to allow for an opportunity to obtain the credentialing. Some providers maintain some will drop out of Medicaid provision because of costs imposed by any or all of the new measures (the others being having after-hours and weekend appointments available, low number of client emergency room visits, and doing early and periodic screening, diagnosis, and treatment in providers’ offices).

But the truth is that some providers are akin to assembly lines that derive the vast bulk of their revenues from Medicaid who are more interested in pocketing the fee than in providing care efficiently. Regardless of their protests, the new standards mean they will have to work and/or redeploy resources to do a better job for their patients and a more efficient job for taxpayers. Otherwise, they lose most of their business, if not their ability to stay in business. That’s why they may yelp the loudest about these changes.

Which if anything will create more business for providers. Higher potential reimbursements through expending more per patient effort means any one provider will handle fewer clients using the same amount of resources, and yet still may do better financially because of that higher level. In turn, the excess, forgone clients create opportunities for other providers to gain revenue. Some doctors not currently seeing Medicaid patients may be induced into doing so with the higher reimbursements. So the new fee schedule is unlikely to create a supply pinch, even if a few marginal providers who relatively don’t have much Medicaid business drop out.

In any event, in some parts of the state this program will not even last until the end of the year, as the Jindal Administration phases in a Medicaid overhaul that essentially gives vouchers for recipients to purchase health care insurance which will do an even better job of delivering quality care with cost containment. This threatens even more the prior practice of billing the state with minimal oversight for necessity and coordination, as managers of plans will coordinate and oversee care for all Medicaid recipients.

The long-ingrained practice in the Louisiana medical community of billing the state – thus its taxpayers – without any regard for care efficacy and efficiency soon will come to an end. Some providers bitterly will oppose this, and the Jindal Administration will have to stand firm in its commitment to transform the system into one like similar ones elsewhere that work well. Skirmishing over this issue portends that larger, more intense battle, but also indicates the transformative power it will set loose.