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No. 50 again? Doctors say NM Medicare, Medicaid numbers are last in the nation
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EDITOR’S NOTE: The Health of New Mexico is a series of articles aimed at breaking down the state’s doctor shortage. Each week a different topic that’s playing into the shortage will be introduced and discussed with input from state legislators and Dr. Julie Harrigan, founder and CMO of Physician EHR Solutions, LLC, who practices and consults not only in New Mexico but also several states around the country. Article 1 focuses on Medicare and Medicaid.
New Mexico is a state with a population that depends heavily on Medicare and Medicaid for health care. The state sees about a 70%-30% split between those using those services and those utilizing private, or commercial, health plans.
That was the number on a report provided by state Sen. Martin Hickey, M.D..
A look at the numbers
When it comes to the number of participants in the Medicare/Medicaid program in New Mexico, the state is, again, at the bottom of the list.
“We are the 50th state in percentage of Medicaid. We have the highest percentage of Medicaid/Medicare patients,” said Dr. Julie Harrigan, founder and CMO of Physician EHR Solutions, LLC, who practices and consults not only in New Mexico but several states around the country.
“That’s critical,” Hickey said. “At the end of the day, we’re treating a lot of symptoms. The disease is called poverty, and we’ve got to fix that.”
While not everyone that falls under that umbrella isn’t necessarily living in poverty, Hickey said that’s what’s driving those high participation numbers “because we don’t have the well-paying jobs, because we don’t have the vigorous economic development we should have as a state, particularly with everything else we have going on for us.”
Those high participation rates also affect what the doctors refer to as the “cost shift.”
Hickey said with about 18% of the population on Medicare and 48% on Medicaid, doctors are getting substandard wages.
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“Medicare pays what it pays: 100% of Medicare is what Medicare pays. It is a low payment,” he said. “Medicaid pays on the Medicare scale. Medicaid pays about 60-70% of Medicare, so when you have about 48-plus percent of the population in Medicaid, with those low rates, when you’re trying to put a practice together, you’re getting substandard wages.
“Now, in other states where it’s almost reversed, in general the commercial sector does what we call the cost shift,” Hickey continued. “That is, they pay 150%, 200% of Medicare to the commercial, and that’s how physicians are able to remain in practice. That’s not available to us when only 30% of the population in New Mexico are in commercial plans, so we don’t have that safety valve that the other states have.”
So is that raising prices for those that pay for private insurance plans in New Mexico?
“The cost of care for private insurance, and it depends on your age group and all of those things, it’s kind of like the Medicare Advantage programs versus just straight Medicare,” Harrigan said, “and the cost thereof, it can get very exorbitant. I meant, it’s a huge cost to those families and individuals.”
Hickey noted that $100 million more went to Medicaid this year but that more is needed.
Is there a possibility of creating a permanent fund for Medicare/Medicaid funding from the surplus that the oil and gas industry has brought in the past several years?
“That is part of the thought process,” Hickey said. “There is a tax that has been put on by Medicaid, and the hospitals pay it, and then it comes back to the state and the state gets to do that extra 70% on top of that. That is raising somewhere around a billion, 2, 3 per year,” which is mostly going to help rural hospitals.”
Low reimbursement
It’s not just the direct numbers of Medicare/Medicaid participants that are at the bottom in New Mexico; the state is also the most underpaid state from the programs.
“Two years ago, at a meeting with senators in the Legislative Finance Committee, we were talking about this issue … and I explained what I explained earlier, the lace of the the cost shift, and I said, ‘We’re going to have to go up to a least 120% of Medicare for Medicaid payment,’” Hickey said. “That’s almost a doubling That won’t be enough, and so in 2023 we did legislate that 120%. ...
“I want to give credit to (Gov. Michelle Lujan Grisham) for getting out in front on this, understanding 120(%) was not enough. We went to 150. But as I finish these analyses, I’m probably coming back to my colleagues and saying, ‘We’re probably going to 175,’” Hickey said.
But, it’s not always a simple thing to do as the federal formula for how high you can go depends on commercial insurance.
Another concern regarding reimbursement is whether the money is actually making its way to the physicians.
“So many of the clinicians work through systems,” Hickey said. “How does the money get from Medical HSD, or now called the Health Care Authority, to the managed care organization, which is the health plan, to the system and then actually make it down to the doctor or clinician? And we’re hearing over and over and over again: it’s not. That is the reason why we legislators added that money; not for more profit for a system, not for building a new building but to attract and retain providers to New Mexico because we have this uneven equation.”
When discussing revenue cycling, which is what hospitals use to track money and claims, Harrigan also questioned if the money is always getting to the proper place.
“That stuff trickling through the hospital down to the doctor, even in the systems that are for-profit that should have really tight rev cycle and audits and things like that, they really don’t,” she said. “This is not unique necessarily to New Mexico, but I see it more here because I’m closer to the problem, and, you know, … if the doctors don’t document precisely what they’re looking for, that hospital does not get paid, and therefore the doctors’ groups are constantly in a deficit, so how much of that trickles into their actual salaries is debatable.”
Hickey also said that while providing more money into the system helps, they need to be able to track it.
“What is the number of that increased percentage that goes to the clinician and how do we track it electronically into a paycheck and fix the problem?” He said. “The issue is that it can come in and take the place of other money, and the doesn’t really get to the physician, but they’re saying, ‘Oh, we’re paying it all,’ but they’re not paying them out of the pots they used to pay from. …. There are so many places to tuck money away into, almost like in pharmaceuticals: pharmacy benefit managers, the number of administrative actions they have come up with that provide no value whatsoever, but they charge for about 20-30% of the cost of the drug.
“Over the summer, I’ll be working with the medical society, other consultants, looking at other states and seeing how they are tracking that money,” Hickey said. “So if we just doubled the Medicaid payment — so that’s like a 60 or 50% increase — well, did that actually get to the individual or did it get pulled off in the system?”
Complicated coding
Another issues the doctors discussed in episode one is how precise documentation from the doctors needs to be just to receive reimbursement, especially when it comes to being on call.
“So many of those providers that are on call for the hospital systems don’t actually get paid to be on call. They only get paid when they come in,” Harrigan said. “And a lot of the things that you get while you’re on call are just telephone calls — you don’t actually come in — so those aren’t really billable, that’s not really billable time, and so there’s that big white elephant in the room at some point that those health care systems are going to have to address.”
While this issue isn’t unique to New Mexico, she said, it’s “rampant” here.
There’s also an issue for clinicians having to precisely document and code statements regarding patient visits. Electronic medical records was supposed to assist with this, but it’s still taking a lot of time and effort for doctors to fill them out.
“Electronic medical records was supposed to be this great thing that would allow us to collect data and do really great analysis,” Hickey said. “Well, in theory, that was true, but it’s really a billing mechanism.”
“It’s really a billing mechanism,” Harrigan agreed “I used to have the old adage that electronic medical records allowed the billing companies to actually understand the doctor’s handwriting. So now they have to extra document.”
She said it’s possible to sometimes have a scribe come in and help with that “but again, it’s whatever their health system will pony up unless they want to do it themselves.
Hickey noted the possibility of advancement in artificial intelligence helping with documentation and notes in the future. “But guess what? You’ve got to sign off on that note, so you’ve got to go back and read it and make sure it’s accurate.”
Additionally, Harrigan said, “If you don’t document, the payers don’t pay. And so if you document poorly, they certainly don’t pay. … Unless you deliver the documentation on a silver platter with exactly what they want, they’ll deny anything from partial or to your full hospitalization.”
Looking forward
One possible solution Hickey suggested — in addition to adjusting the funding formula — is the possibility of the state creating its own group.
“It’s the law of large numbers,” he said. “If we could combine just our Medicaid and our state employees or people who are funded publicly for health care into one pool, we would have a pool larger than any company. We’d have 5, 6, 7 million, and then you can drop out and say, ‘PBMs go away.’ There are a few things you need to do to ensure safety, but we’re going to negotiate directly with the pharmaceutical companies, and we take out 50% of the cost.
“You can come up with some simple solutions, but you got to know where the curve balls come in … and you’ve basically got to write the legislation to contain the curve balls and keep them out,” he added. “And that’s where it gets complex, but it’s doable.”
