Health care reform would push state to hike Medicaid pay to docs

Indiana doctors may finally get their increased Medicaid payments.

An actuarial report prepared by the local
office of Milliman Inc., a Seattle-based consulting firm, projects that the state of Indiana would have to hike its Medicaid
payments by one-third in order to entice more doctors into the program.

The program would need to attract more
doctors because the federal health reform bills call for allowing many more people into the Medicaid program.

Indiana now cuts off adults from the Medicaid program if they earn more than $5,513 a year and have a family of four. The
federal legislation would raise the limit in all states to $29,327 a year.

Murphy

The federal government would
pick up the tab for that expansion for the first three years and pay 95 percent of it after that. But
Milliman figures the state would still need to pay an extra $118 million a year to attract enough doctors.

The Indiana Medicaid program currently pays doctors about 60 percent of the rate paid by the
federal Medicare program, according to Milliman. The state would need to raise its rates to 80 percent
to entice enough doctors to participate, Milliman concluded.

Even at those rates, Medicaid
payments would be about one-third lower than what doctors typically receive from private health insurers.

Doctors
in Indiana received no increase in Medicaid payments from 1994 until a small increase in 2007. Many doctors refuse
to see Medicaid patients because the payment rates are so low.

Milliman suggests the state would need far more
doctors because nearly 500,000 more Hoosiers would be covered by Medicaid after the federally mandated expansion.

“The financial impact of this bill is deeply troubling, especially at a time when state revenues have decreased significantly,
expenditures have increased due to enrollment, and we can barely afford the program we have,” wrote Anne Murphy, secretary
of the Indiana Family and Social Services Administration, in a letter to Indiana senators Richard Lugar and Evan Bayh.

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.