Analysis: Nixon's Medicaid plan could boost pay for doctors

JEFFERSON CITY, Mo. -- In the American health-care system, some patients are worth more money than others.

As cold and clinical as that may sound, it long has been the reality under a government-run Medicaid system that pays doctors less money to treat the poor than those same physicians receive for treating the elderly covered by Medicare or middle- and upper-income individuals who have private insurance.

Yet that could change -- or at least begin to -- under a little publicized aspect of Gov. Jay Nixon's plan to expand Medicaid eligibility in Missouri.

Nixon outlined a budget plan last week that seeks to spend $908 million of new federal money to add nearly 260,000 lower-income adults to the Medicaid rolls under the provisions of President Barack Obama's health-care law. Figures provided to The Associated Press by Nixon's budget office show that nearly $82 million of that money is the result of a proposal to increase the reimbursement rates for medical providers who treat those newly added patients.

Under Nixon's plan, the state Medicaid program would pay rates similar to private insurance -- instead of the typically lower rates paid by Medicaid -- for adults covered by the Medicaid expansion.

The intent is to entice more physicians to accept Medicaid patients, thus improving the health of those people and potentially saving taxpayer money by avoiding the types of expensive, emergency care that arises when health problems go untreated until they are dire.

"It's a lovely time to experiment," said Nixon's budget director, Linda Luebbering. That's because the federal government -- at least initially -- would be footing the full bill for the higher reimbursement rates.

Not everyone is too keen about the experiment, however.

Many Republican lawmakers remain opposed to the general concept of the Medicaid expansion backed by the Democratic governor and president, because they don't like the increased government involvement in health care. Even some who could personally benefit remain reluctant to embrace Nixon's plan.

Republican state Sen. Rob Schaaf is a physician at a family medical clinic in St. Joseph. He says the clinic charges $71.49 for a medium-length office visit and typically is paid $67.55 by private insurance, $64.64 by Medicare but just $35.88 by the state Medicaid program.

Because of the low pay, Schaaf said he doesn't see patients whose primary coverage is through Medicaid. And he doesn't support Nixon's plan -- even though he could financially benefit if he were to accept patients covered by the higher payment rates under the proposed Medicaid expansion.

"While that's a good thing from the point of view of the providers, it may not be so good for the taxpayers who are going to suddenly increase a welfare program," Schaaf said.

Schaaf is suspicious that Nixon included the higher reimbursement rates in his plan to garner more support from medical providers, who could put pressure on their local lawmakers to approve the Medicaid expansion.

Obama's health-care law already is supposed to increase reimbursement rates for primary care services, so that the Medicaid rate matches the Medicare rate in 2013 and 2014. Nixon's proposal would go beyond that by raising the payment rates even higher, and by doing so for services that aren't considered primary care.

The "commercial" reimbursement rates envisioned by Nixon's plan are projected to cost 9 percent more than typical Medicaid rates, Luebbering said.

But some categories of people still could be left out. The higher payment rates would apply only when doctors see adults who are covered by the expansion -- those ages 19 to 64 earning up to 138 percent of the federal poverty level, or $15,856 annually for an individual. The higher rates would not apply when physicians treat other categories of Medicaid recipients.

Senate Appropriations Committee Chairman Kurt Schaefer, R-Columbia, said he doubts the federal government will sign off on Nixon's plan to pay rates equivalent to private insurance for certain Medicaid patients.

Nixon's administration doesn't believe a federal waiver is necessary for the higher payment rates, which could provide a blueprint for the future of the state's Medicaid program, Luebbering said.

"Our goal is to really see if it works well to encourage doctors to take these clients," she said. "Because if it does, at some point, it may make sense to expand that concept in the entire Medicaid program."

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EDITOR'S NOTE: David A. Lieb has covered state government and politics for The Associated Press since 1995. Follow him at --http://twitter.com/DavidALieb