Everyone agrees that people who receive both Medicare and Medicaid are a huge cost driver for the federal government — but controlling those costs might be harder than it looks.
TMA Says: Repeal the dual-eligibles payment cut
In early 2012, legislators made a funding cut without knowing its true impact, creating a medical emergency for thousands of dual-eligible Texans and the physicians who care for them. “Dual-eligible” patients are low-income seniors and people with disabilities who qualify for both Medicare and Medicaid. In Texas, there are almost 465,000 dual-eligible patients,[i] who are among the sickest and most vulnerable people in our state.
When a physician provides treatment to a dual-eligible patient, Medicare pays the physician 80 percent and Medicaid the remaining 20 percent. Medicare also requires patients to pay an annual deductible – $140 in 2012 – which Medicaid pays because the patients are so poor. However, beginning on Jan. 1, 2012, Texas Medicaid implemented a new policy, limiting what it pays physicians (and other providers) to the maximum of what Medicaid pays for the same service. In most instances, the patient’s physician faces a cut of 20 percent, and potentially even more. Consider these examples:[ii]
Example 1: Established dual-eligible patient has not met any of the Medicare deductible and is seen during a routine office visit. Physician bills Medicare CPT code 99213. Maximum Medicare allowable is $66.90. Medicare pays $0 because deductible has not been met. Medicaid will pay $33.27, the Medicaid allowable for this code. Prior to policy change, physician would have been paid up to the Medicare allowable ($66.90). This is, in essence, a 50-percent payment cut. Example 2: Established dual-eligible patient visits physician office for routine visit, Medicare deductible has been met. Physician bills Medicare CPT code 99213. Medicare allowable is $66.90. Medicare pays $53.52, 80 percent of the allowable. Physician bills Medicaid for the remaining 20 percent. Medicaid allowable is $33.27, so no coinsurance will be paid. Under old policy, Medicaid would have paid an additional $13.38 so that physician’s entire payment equaled Medicare’s $66.90 allowable. This is a 20-percent payment cut.
The dual-eligible payment cut unfairly penalizes physicians who care for the sickest and frailest Medicare patients. The policy change hit particularly hard practices in rural and inner-city Texas, along the Mexico border, and many of those serving nursing homes. Those practices serve a disproportionate number of dual-eligible Medicare patients. In addition, the cut is already causing physicians to limit how many dual-eligible patients they are willing to treat, restrict their Medicaid participation, and forego practicing in communities that most need them.
[i] The Center for Strategic Decision Support, Texas Health and Human Services Commission. April 2012.
[ii] For illustration only. Medicare payments vary by region of the state