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Attempts by States to Save Money by Locking Medicaid Enrollees out of the ED Are Likely to Backfire

by Robin M. Weinick

May 21, 2012

In a recent article in the New England Journal of Medicine, my colleague Dr. Art Kellermann and I argue that attempts by states to save money by seeking to lock Medicaid enrollees out of the emergency department are likely to backfire. We take the recent example of Washington state, where a proposed change in reimbursements for emergency department care for patients covered under Medicaid would have paved the way to retroactive denials—a very troubling policy that could stick the poorest patients with bills they cannot afford to pay. We argue that a better solution is to reverse what for many years has been a trend of shrinking access to primary care for Medicaid beneficiaries.

Funding this care and finding doctors to provide it may be a challenge for Medicaid, which relies on funding from both the federal government and from states. Consider the following evidence:

  • With budgets tight, state Medicaid programs are often strapped for cash, as is currently the case in Georgia; Maine estimates a $221 million shortfall in its Medicaid program by the end of its current two-year budget period. Beginning in 2014, Medicaid eligibility expands significantly, including adults with incomes up to 133 percent of the federal poverty line.
  • At the same time, physicians may be reluctant to participate in Medicaid, making primary care access a significant challenge. The average physician fee for a 15-minute visit for an established patient is $38 under Medicaid, compared with $60 under Medicare (pdf), the program that covers most people ages 65 and over in the U.S. Data from the mid-2000s showed that more than 1 in 5 physicians were accepting no new Medicaid patients—rates six times higher than for Medicare beneficiaries and 5 times higher than for those with private insurance.
  • The Association of American Medical Colleges predicts that at current rates, we will face a national shortfall of more than 45,000 primary care physicians (pdf) by 2020. With more people gaining insurance coverage under the Affordable Care Act beginning in 2014, access to primary care is likely to be more strained.

But some recent trends in health care delivery may help:

These are undeniably difficult times, and we need to find ways to provide accessible, high-quality, and cost-effective health care to all Americans. But we cannot and should not be proposing policies that purport to save money by restricting access to care for low-income and low-resource patients.