Medicaid budget includes raises for doctors

The joint subcommittee studying human resources budgets approved Wednesday the $2.74 billion Medicaid budget for the next two years, including substantial raises for doctors and other medical providers.

The revised budget includes a total of $53.6 million in reductions made possible by new projections which show caseloads will grow more slowly than originally projected and that health-care costs will actually drop some.

Several lawmakers said they were uncomfortable with the idea costs would decrease.

"That seems so counterintuitive when health-care costs are going up everywhere else," said subcommittee Chairwoman Sheila Leslie, D-Reno.

But Healthcare Financing and Policy Administrator Charles Duarte said his staff has checked and rechecked those projections and believes they are accurate.

Members representing both the Senate Finance and Assembly Ways and Means committees also approved the governor's recommendation to increase reimbursement rates for physicians and others who provide medical services to Medicaid clients. The existing reimbursement rates for different medical services is at 85 percent of the 2002 federal payment schedule.

The subcommittee voted to raise that to 90 percent and to use the new 2007 payment schedule. Duarte said that should mean raises of up to 20 percent for many doctors with the biggest increases to those physicians who see patients and perform procedures in their offices.

He said the last significant increase for doctors serving Medicaid clients was in 2001.

The exception is obstetricians who are now paid at 128 percent of the 2002 payment schedule and would actually see a decrease in reimbursement for those services. Speaker Barbara Buckley, D-Las Vegas, asked other members to support a "hold harmless" provision in a letter to Duarte to ensure they don't lose money and the subcommittee agreed unanimously.

But because of the tight budget situation the state faces, the subcommittee had to agree to delay the increases until August 2008.

Just over half the Medicaid the budget comes in the form of Title 19 grants from the federal government. The state general fund portion will be just over $971 million for the biennium.

Medicaid provides medical services for low-income parents and their children, the elderly and the disabled.

Sen. Barbara Cegavske, R-Las Vegas, said the increases for doctors are vital to prevent more of them from refusing Medicaid patients.

"We've got physicians in our state who are not going to be taking our patients because they just can't afford it," she said.

Sen. Bill Raggio, R-Reno, voiced the same concern: "We have a lot of physicians who no longer take Medicaid or Medicare patients."

Buckley agreed but asked Duarte what assurances the state has the increased pay will actually get to the doctors. He said major providers have been good about passing on the increases to the providers. He added that his office watches to ensure that HMOs don't take more than 15 percent for administrative costs.

The recommendations must now be approved by the full Ways and Means and Senate Finance committees, which is likely since the vote in subcommittee was unanimous.

• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.

Medicaid Budget

General Fund: $971 million

Increase from current biennium: $157.6 million or 19.4 percent

Federal funds: $1.49 billion

Increase from current biennium: $73.6 million or 5 percent

Transfers from other governmental entities: $202.7 million

Increase from current biennium: $22.3 million or 12.4 percent

Other funds: $72.6 million

Increase from current biennium: $24 million or 49 percent

Total budget for 2007-2009: $2.74 billion

Increase from current biennium: $272.8 million or 9 percent.