Doctors: Medicaid cuts penny-wise, pound-foolish

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March 16th, 2011

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Lincoln, NE – Cutting Medicaid rates to help balance the state budget is penny-wise and pound-foolish, opponents of the proposal said Tuesday.

The Nebraska Medical Association says Gov. Heineman's proposed cuts to Medicaid will cost more in the long run (Photo credit Wikimedia)


Gov. Dave Heineman has proposed a five percent cut in Medicaid payments to many doctors, hospitals, and others who care for low income people. That would save nearly $60 million over the next two years. The Appropriations Committee, in its preliminary budget, shaved that proposed cut to 4 percent. But opponents of the cuts, like Dr. Bob Rauner of the Nebraska Medical Association, say that’s shortsighted. He said Medicaid reimbursement rates are already so low that most physicians, at least in Lincoln, won’t accept new Medicaid patients. Rauner acknowledged cutting rates will save money in the short run. But he said that will be because people are effectively denied access to medical care until their problems reach a crisis point. He gave an example of someone on the verge of developing diabetes.

“I can see a pre-diabetic… before they develop diabetes, explain to them how they can prevent it, get them in to see a dietician, maybe put them on a low-cost medicine like metformin for $4 a month. For a couple hundred dollars a year we can prevent them from getting diabetes. The flip side, we can do nothing, we can cut access and they’ll end up in the emergency room with a heart attack, complications from their diabetes that’ll cost tens of thousands of dollars.”

At a hearing before the Appropriations Committee, Director of Health and Human Services Kerry Winterer defended the proposed cuts.

“None of these, including the provider rates, are easy decisions,” he said. “And if we had our druthers, we wouldn’t be cutting anybody, or we wouldn’t be reducing funding. But you have to pick and choose among the various programs to determine how can we spread out the pain of the fiscal situation that we’re in.”

One alternative that many health advocates are supporting is a proposed increase in the state’s cigarette tax, which could raise enough to cancel out the cuts. A bill to do that is sitting in the Revenue Committee. And even if it’s moved out to the full Legislature for debate it would presumably need a supermajority of senators to overcome an expected veto. Asked about the bill’s propects, one advocate – Creighton University Medical Center President Gary Honts – said only that “lively discussions” are underway with senators.

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