MMA Viewpoint
Fix Minnesota’s Frayed Health Care Safety Net
The MMA is embarking on an effort to address the low payments to physicians who provide care to patients in Minnesota’s public health care programs—Medical Assistance (MA), General Assistance Medical Care (GAMC), and MinnesotaCare. As you know, these payments don’t cover our actual costs of providing care.
It may seem like the wrong time to be asking for increased payments. The state faces a devastating budget shortfall and is looking at options for cutting costs. But as more Minnesotans face worsening economic circumstances, we can expect more people to turn to public programs. If that happens, many of us will have an even harder time covering our practice costs. For those reasons, it’s time to look at the way our health care safety net programs are funded.
Physicians have had only one payment increase in the last 16 years—a 3 percent raise in 2000. Yet the cost of maintaining a practice has gone up more than 20 percent just in the last 10 years.
Currently, MA, GAMC, and MinnesotaCare cover about 11 percent of Minnesota’s citizens and Medicare covers another 13 percent. This means that one in four of our patients has insurance that does not cover the overall cost of providing care—facilities, supplies and equipment, and staff salaries. In some rural and inner city clinics, the percentage of patients on government programs is much higher than 25 percent, placing some of those practices at risk of closing. It forces others to shift costs, leading to higher premiums for the insured and placing a greater burden on employers, particularly small businesses that struggle to provide affordable medical coverage in the first place.
If we look at Iowa, North Dakota, South Dakota, and Wisconsin, we find that public programs reimburse for office visits, evaluation and management services, and other outpatient services at a considerably higher rate than in Minnesota. The MMA would like to see regular inflationary increases in payments from state programs.
For years, Minnesota physicians have been doing the right thing and caring for our most vulnerable patients, despite the fact that the payments we receive aren’t covering our expenses. We remain committed to preserving Minnesota’s health care safety net; but it’s time to find a sensible state solution to funding it. We know that it will be extremely difficult to convince lawmakers to raise payments this year. However, we can increase awareness among legislators and other policy makers about why payments need to be more in line with practice costs.
We can push for a couple of changes in the way the system operates. For one, the state is required by federal law to set “actuarially sound” payments to HMOs every year for those patients on public programs covered by managed care plans. Included in those rate calculations are assumptions about changes in price and volume. Yet there is no guarantee that those increased rates will be passed through to practitioners in the form of higher payments. We want to change that.
We also will hold the state accountable for complying with the 2003 law that required the Minnesota Department of Human Services (DHS) to make payments based on Medicare’s relative value unit system by January 1, 2007. DHS is the only large payer in our state that does not use this methodology.
As government officials look for ways to reduce expenses in these difficult times, the MMA will fight any proposals to cut payments to public programs and work to ensure adequate funding for Minnesota’s health care safety net programs. It won’t be easy, and it won’t be a quick fix. We need all Minnesota physicians to help in this effort.