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Washington state will limit Medicaid payments

Nancy Marshall-Genzer Mar 7, 2012

Jeremy Hobson:One of the biggest items in any state budget is Medicaid, which pays for healthcare for the poor. States share that cost with the federal government. But in these tough economic times, some states are getting picky about what they pay for when it comes to Medicaid. And doctors, who don’t want to work for free, are pushing back.

Marketplace’s Nancy Marshall-Genzer looks at one place where this is happening — emergency rooms in Washington state.

Nancy Marshall-Genzer: Washington state is set to refuse payment for certain emergency room visits starting next month. It’s come up with a list of about 500 E.R. diagnoses that hospitals won’t be allowed to bill Medicaid for. It includes things like pregnancy tests, urinary tract infections and other minor things that Medicaid patients go to an emergency room for, instead of seeing their regular doctors. Maybe they don’t have a primary care doc. These patients are in the E.R. so much, they’re nicknamed frequent fliers.

Dr. Jeff Thompson is Washington state’s chief medical officer.

Jeff Thompson: It will be something that will be new and innovative, but we think we can do it.

For example, Washington state won’t pay for minor sprains anymore.

Thompson: I mean if somebody breaks a ligament or breaks a bone, we’ll pay for that.

But E.R. docs don’t know if there’s a ligament tear or broken bone without an expensive X-ray. And, if it’s not a bad sprain, the hospital will get stuck with the bill.

And it’s not like hospitals can turn anyone away. Nathan Schlicher is a doctor at Saint Joseph Medical Center in Tacoma, Wa.

Nathan Schlicher: Remember that we can’t legally keep anyone out of the E.R. Once they require emergency care, we’re required to see, screen and stabilize them.

So far, Washington is the only state that’s going to refuse to fund E.R. treatment for Medicaid patients with minor injuries. But other states are also watching the bottom line, because Medicaid is a joint federal/state effort, and the feds only pay for about half of the states’ Medicaid costs, on average.  So states are slashing their Medicaid payments to doctors and hospitals.

Alan Weil studies state health issues at the nonpartisan National Academy for State Health Policy.

Alan Weil: And we are seeing state after state making sometimes 5, sometimes 10 percent cuts in payment rates under the Medicaid program.

Weil says most states are still footing the bill for all Medicaid E.R. visits. They’re slashing their payments, but they are still paying. Weil says they’re watching Washington state’s emergency room experiment closely. If it works, maybe they’ll try it.

In Washington, D.C., I’m Nancy Marshall-Genzer for Marketplace.  

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