Governor announces Medicaid cuts
The Brownback administration has announced plans to cut most Medicaid (KanCare) provider fees effective July 1st by 4% as part of a broad-based effort to pare state spending in order to balance the state budget. Rural critical access hospitals were exempted from the cuts. The cuts will affect all physician services statewide, however. KMS expressed concerns to administration officials that physician payment cuts are likely to adversely impact access to care, and will inevitably result in higher overall costs to the program. If the cuts cause physicians to drop out of the program, or place strict limits on the number of Medicaid patients they are able to see in their offices, more care will be delivered in hospital emergency departments, which are considerably more expensive settings than a physician clinic.
Most Kansas physicians participate in Medicaid even though the fees paid by the government financed health program are so low that it usually does not cover the practice's cost to see those patients. Medicaid payments to physicians are typically about half what a commercial insurer would pay for the same service. Ironically, the planned cuts are likely to exacerbate the problems that KanCare was designed to solve. The provider cuts are particularly disappointing because they represent a reversal of one of the administration's key principles upon which KanCare was founded a few years ago: improved patient care outcomes and lower costs, all to be achieved without cutting provider payments.