Other providers keeping eye on Medicaid debate
Published 5:00 am Wednesday, July 23, 2008
While most of the attention surrounding Gov. Haley Barbour’spromise to cut $375 million in Medicaid services has been focusedon how hospitals would handle the situation, smaller medicalservice providers have a stake in the program’s future as well.
Although cuts to Medicaid would not result in hundreds ofthousands, or even millions, of dollars in lost revenue like shownon the spreadsheets of hospitals, pharmacies and nursing homeswould also see lessened reimbursements that could translate toreduced services or the denial of Medicaid altogether.
“I would think pharmacists are getting pretty close to the pointwhere we have to decide if we’re going to accept Medicaid or not,”said Bane Drugs owner Clint Bane.
Bane said a 10 percent cut to reimbursements for pharmacists, asoutlined in the governor’s proposed Medicaid cut list, would costhis business approximately $1,000 per month. He said around 15percent of Bane Drugs’ customers use Medicaid to purchase theirprescription medication.
The loss of $1,000 per month would not cause the store to close,Bane said. But the very suggestion of cuts to pharmacists’ Medicaidreimbursements is unwelcome to a portion of the medical communitywho are “usually the first ones they go to” when cuts arethreatened.
“They’ve cut us and they’ve cut us and they’ve cut us – and Idon’t understand where they think they can go,” Bane said.”Frankly, there’s just no more to cut on our end. A 5 percent cutto us is probably half our profit, and a 10 percent cut would abouttake all of it up.”
Bane suggested the state again withdraw money from the tobaccotrust fund, a controversial method used often in the past to shoreup health care in Mississippi, even though the state agreed not todivert funds from the $4 billion settlement awarded from a 1994suit against tobacco companies.
Another method of lessening the impact on pharmacists would befor doctors to prescribe more generic medications, Bane said, andmodify the list of medications covered by Medicaid.
While the implementation of Medicaid reimbursement cuts would bepainful to the business, Bane said, it will not be as bad as itwould have been before 2006, when many Medicaid patients weretransferred to Medicare Part D for their medication coverage.
Bane said his Medicaid clientele was around 40 percent beforethe creation of Medicare Part D dropped that number to 15percent.
LaRue’s Discount Drugs owner LaRue Baker agreed the cuts wouldnot force his pharmacy to close its doors, as the implementation ofMedicare Part D dropped his Medicaid clientele to about 13 percent.However, any cuts to the program would decrease his profitstructure, forcing an evaluation of the feasibility of acceptingMedicaid.
“I don’t think it’s any different from any other third-partyreimbursement,” he said. “You always have to look at them and makea decision to see what best suits your business. We have tosurvive; we have to make money.”
Baker agreed with Bane that there is little room left for cutsto pharmacies after years of being “squeezed … down to a minimum”by reductions in third-party reimbursements. At the very least,Baker said, Medicaid cuts would force him to tighten his belt andtry to control his expenses in other areas, such as staff size.
“We are here to serve people, to help them with their medicalneeds, but you have to make money or you won’t be here,” he said.”We can’t do this as just a service – it’s not the government.”
Brookhaven’s nursing homes seem better suited to handle theproposed 6.1 percent cut to their reimbursements, but neither wouldthese facilities escape the cuts without damage.
“Certainly any cuts would be a concern,” said GoldenLivingcenter-Brook Manor Administrator Stephanie Burton. “Medicaidplays a large part of any long-term care facility.”
Burton pointed out that, like all nursing homes, GoldenLivingcenter-Brook Manor has residents who are wholly dependent onMedicaid to pay room and board rates and medicine, and the facilityuses some of its reimbursement from the program to purchasesupplies.
Burton said she and the rest of the nursing home community wouldbe watching the legislative process – which resumes in Jackson onAug. 4, two days before the Medicaid cuts are scheduled to go intoeffect – and hoping for a funding compromise.
Haven Hall Healthcare Center Administrator Kenneth Smith saidany cuts to Medicaid may result in cutbacks for his facility, butthose cuts will not be related to patient care.
“It would cut back our residents’ reimbursement rates, but Idon’t think it would get to the point where we couldn’t providetheir services,” he said. “Medicaid reimbursements are where mostof the revenue for the homes here in Brookhaven comes from, but Idon’t foresee the cuts proposed affecting our residents.”
Smith said Haven Hall houses 57 Medicaid residents, with theaverage reimbursement rate from the program totaling $163 perresident per day. The 6.1 percent reduction would amount toresidents receiving approximately $10 less per day – or $300 permonth – to cover the cost of their medical needs.
Regardless of the reduction, Smith said there was no cause forpanic.
“I don’t think that any of these cuts they’re proposing nowwould be that drastic to where people can’t afford (to stay atnursing homes),” he said.
Rep. Becky Currie, R-Brookhaven, a member of the House MedicaidCommittee, sympathizes with pharmacists and their struggle. Shesaid a 6.1 percent cut to their Medicaid reimbursements would causefurther financial complications to pharmacists, who recently sawthe elimination of their prescription filling fees on July 1.
“It’s not a huge cut, but Medicaid already doesn’t pay as wellas other forms of insurance,” she said. “When you have to cut on agroup that’s already being paid less, it may make you not want toaccept Medicaid anymore.”
Currie pointed out that those in the health care industry whoaccept Medicaid do it primarily as a service, as involvement withthe program is not profitable.
“Truly, most people who provide Medicaid services lose money,”she said. “They come out in the red, but it’s just one of thosethings where you do it because it’s the poor and disabled, and youdo that as your contribution to society.
“But I guess at some point, where you’re not making enough topay the bills, you have to decide,” Currie concluded.