Gibbons’ plan pays doctors but doesn’t include hospitals

Wednesday, Jan. 24, 2007 | 7:06 a.m.

CARSON CITY - Gov. Jim Gibbons has recommended a 24 percent increase in the payments to doctors who treat poor patients, but hospitals that treat Medicaid patients would not receive extra money under the governor's proposed $6.8 billion, two-year budget.

Elderly and disabled patients on Medicaid often have difficulty finding doctors, some of whom have been reluctant to take Medicaid cases because the state's payments to physicians are insufficient to meet their costs.

"Fewer physicians are taking new Medicaid patients," Gibbons said in his State of the State message to the Legislature on Monday.

His proposed fee increase, the governor said, is aimed at enticing physicians to see more patients covered by the federal-state program.

Gibbons, however, did not suggest a payment increase for Nevada hospitals that treat Medicaid patients, even though that rate has not been increased since fiscal 2002.

Bill Welch, head of the Nevada Hospital Association, said hospitals' losses on Medicaid cases ultimately affect all patients and their insurers, because to make up for the Medicaid deficit, bills for paying patients are increased.

Medicaid in Nevada reimburses hospitals only 79 cents of every $1 of the cost for treating patients, Welch said. The resulting 21 percent loss is being shifted to insurance companies, other business and individuals.

"It's a sick tax on the private individuals, insurance and others," Welch said.

Nevada hospitals, Welch said, lost $34.7 million in treating Medicaid patients in 2005, the most recent year for which figures are available.

Hospitals, according to the most recent state report, earned 3.3 percent in annual profits. The operating margin in Clark County hospitals was less than 3 percent, with University Medical Center, St. Rose De Lima and Southern Hills hospitals reporting losses.

Nationally, hospitals' average profit is 4.5 percent.

Chuck Duarte, chief of the state health care financing and policy division, agreed that hospitals deserve an increase, but said the rate increase for doctors was a higher priority because of limited funds.

Under Gibbons' plan, Medicaid will pay $94.33 for an office visit to a physician for a new patient, up from $80.31. For an established patient, the rate for an office visit will go from $44 to $60.86. And for an office procedure such as immunization of a child, the payment would rise from $3.69 to $9.70.

The increase will cost $27.7 million over the next two years.

Larry Matheis, executive director of the Nevada State Medical Association - the group that represents doctors - said the increase "is an important step to shore up the Medicaid program."

Noting that Medicaid patients who cannot get into a doctor's office often end up in hospital emergency rooms, Duarte and Matheis said the higher payments to physicians should reduce the number of hospital visits .

In addition to the rate increase for doctors, Gibbons has asked for legislative approval to hire a professional health care coordinator to "help Medicaid patients sort out our confusing health care system."