Providers Set to Lose 3.3 Percent of Medicaid Reimbursement

Tom Forslund – Wyoming Department of Health

By Tom Lacock

Wyoming Medical Society

CHEYENNE – Wyoming providers can soon expect reduced Medicaid reimbursement according to Wyoming Department of Health Director Tom Forslund. According to the Wyoming Department of Health, the provider reimbursement proposed by Forslund today will go into effect, July 1.

Forslund announced a reduction in Medicaid reimbursement of 3.3 percent across the board with further cuts coming to specific specialties during a meeting of the Wyoming Legislature’s Joint Appropriations Committee (JAC) in Cheyenne, Tuesday.

The JAC is made up of 12 members of the Wyoming Legislature and is charged with helping to set the state’s budget. The JAC is co-chaired by Rep. Steve Harshman (R-Casper) and Sen. Tony Ross (R-Cheyenne). The JAC’s two-day June meeting started today and will be used to review the state’s dwindling cash flows and receive recommendations from Gov. Matt Mead on cutting state spending due to lower than expected state revenues.

Gov. Mead opened the meeting by suggesting a reduction of $248 million for the 2017-2018 biennium budget due to below normal severance taxes from a mineral industry which has seen a loss of 5,500 jobs in the last year.

The Wyoming Department of Health took the bulk of the state’s cuts ($90 million, which would trigger another $41 million in lost federal matching funds) with Medicaid shouldering the majority of that burden. The Division of Healthcare Financing or Medicaid has been asked to reduce its budget by $54,438,246 to meet the requested budget reduction. Among those cuts discussed was the 3.3 percent reduction in provider reimbursement, which would save the state an estimated $9.4 million for the 2017-18 biennium. Providers billing Medicaid for nursing home reimbursement would be subject to just 2.7 percent cuts instead of the 3.3 percent. In addition, there will be adjustments to anesthesia and lab/radiology codes where rates will be re-set.

According to a public document available at the meeting and online here, and a letter sent by WDH to providers the provider rate reductions would be done through Resource-Based Relative Value Scale (RBRVS), and Outpatient Prospective Payment System. The document adds that it would eliminate the percentage of billed and other rate-setting methodologies.

Sen. Bruce Burns (R-Sheridan) questioned the impact of the cuts on the provider network and physician’s ability to deliver care at a lower rate at the JAC meeting. Forslund agreed with the concern, but felt he had little choice in order to get to a required budget reduction.

“That is always the danger or risk when you start to reduce rates in the Medicaid program,” Forslund said. “The providers say ‘thank you very much but we won’t take Medicaid patients anymore because they are too expensive to treat.’”

Forslund went on to say the State of Wyoming has the highest participation rate of providers in the Medicaid program nationwide. He added that states such as New Jersey who do not continue to pay high reimbursement rates to providers end up with very low provider participation in Medicaid.

“There is a direct correlation in how much you reimburse versus how many providers won’t take Medicaid patients. The more you reduce your reimbursement rate, the more providers will say they won’t take the Medicaid patients because it doesn’t cover the cost of taking care of them.”

Other ways the Department of Health will cut its budget to spend what it has available is to no longer pay for nursing facility hold/reserve days, physician-administered drugs (j-code) rebates, patient contribution to swing bed and extraordinary nursing home clients.

Physicians are not the only group to be impacted by the round of cuts. Mental health and substance abuse centers will see significant cuts, including over $11 million in reduction of grants to the community mental health centers. Hospitals who accept and treat Title 25 clients waiting for beds in Evanston will be given a 14 percent reduced reimbursement rate. Another $2 million for suicide prevention services will be cut. Developmental pre-schools can expect a $6.7 million cut, while senior centers and care will also see deep cuts.

Among the other cuts to Department of Health programming are ending the state license shelter care, ending the Employed Individuals with Disability Program; Ending the Breast/Cervical coverage for individuals who make 100 percent or more of the federal poverty level; ending the Prescription Drug Assistance Program; ending Adult Vision Coverage and Adult Dental Coverage available to those already in Medicaid.

Forslund also cautioned the JAC that he would not be able to pay for cost overruns in the Title 25 program in 2017-18 without a large increase to the biennium’s $4.4 million budget. Right now, the deficit for that budget in the 2016 biennium is $17 million.

Some JAC members asked how the state would have been impacted had it accepted Medicaid expansion. A frustrated Forslund said he stood by the numbers he had offered the group in years one, two and three of the expansion effort and said as soon as he makes the cuts he is proposing the ship has sailed on expansion dollars for the state.

“(As soon as he makes the cuts official) The money I would have used to pay for the match is gone,” Forslund said. “If we did expansion today it would have benefit. It would benefit the 20,000 plus or minus individuals who would have healthcare coverage. It would help health care providers who are getting hit with rate reductions as a result of these budget cuts. In terms of money to move over for the match, that money is going to be gone because I have to cut $75 million out of my budget.”