By Bill Peckham
weKANer on Kidney Space linked to an article from the Wall Street Journal about looming cuts to state Medicaid funding. States Take Aim At Medicaid paints a grim picture. Across the country states are working to fill huge budget holes (and it seems, they see Medicaid as a big pile of fill). For people on dialysis (and those who love us) Medicaid cuts should be of concern out of self interest. Even if you have private insurance or Medicare as your primary payer, Medicaid reimbursement influences the dialysis you experience.
The dialysis provided at a given unit is based on average reimbursement. There isn't (or isn't suppose to be) one kind of care for people with Medicaid, another kind of care for people with Medicare, and a third kind of care for those whose private insurance is primary. Instead units have a single standard of care, with revenue from all sources pooled. Divide the total unit revenue by the number of treatments and that is the unit's average rate of reimbursement. Average reimbursement varies from state to state because Medicaid reimbursement varies and the payer mix varies. Some units might have a lot more Medicaid patients and some units may have more private payers. That said, in general terms, the average payer mix is 50, 25, 10, 10.
Generating the most revenue per treatment the 10% of patients that have private insurance as their primary payer. The per treatment revenue among these patients can range from hundreds of dollars to many thousands of dollars. This is the economic engine driving the dialysis industrial complex. Even with the high fees supporting their treatment, this 10% of patients should be concerned about Medicaid cuts.
50% of the patients will have Medicare as their primary payer and private insurance as their secondary payer (Medicare, when primary, pays 80% of their allowed rates; the secondary payer should pay the unpaid 20% (subject to copay and deductible rules)). This 50% of a unit's patients will generate about $235 per treatment in revenue for the dialysis and separately billable services e.g. IV medications, lab tests (on average, subject to case mixing and the geographic wage adjustment which could mean $100 swings from patient to patient, unit to unit). This 50% of patients should also be concerned about Medicaid cuts.
25% of patients will have Medicare primary and Medicaid secondary. The amount of revenue generated by this group of patients varies from state to state. In most states revenue from treating these people will equal the 50% group. Most state Medicaid programs pay the 20% not covered by Medicare. However, some states do not pay the 20% at all (I believe FL, MS, AL are in this category). Some states pay some charges and not others. Other states might pay only a portion of the 20% not paid by Medicare. I've not found a state by state compilation of Medicaid reimbursement policies but it is know that this 25% of a unit's patients will generate a range of revenue amounts depending on the state Medicaid policies. This revenue is one area where state Medicaid cuts could impact dialysis by decreasing the average reimbursement rate in the state. For example, these payments could be subject to the across the board cuts some states are contemplating and that would translate to a lower average reimbursement rate in that state.
Finally about 10% of the patients will have Medicaid as their only payer. Like all Medicaid payment policies the rate state Medicaid programs reimburse for dialysis varies from state to state. Most states pay in total the Medicare allowable rates, others pay what Medicare pays i.e. 80% of the Medicare allowable rates. And there are some states where Medicaid pays somewhat more than the Medicare allowable rate. The revenue generated by this 10% of a unit's patients can vary a great deal. And this revenue is another area where state Medicaid cuts could impact dialysis by decreasing the average reimbursement.
(The 5% not accounted for would be distributed, some units would have more Medicaid patients others might have more people supported by private insurance, and would include people without insurance. I welcome clarifying comments, especially if you can offer your state's Medicaid policies as an example. It would be nice if someone would compile the policies state by state.)
Even though less than half a unit's patients have all or some portion of their care funded through Medicaid, ultimately all the patients will feel the impact of cuts in Medicaid reimbursement. Anything that decrease the average reimbursement, will decrease everyone's care. All dialyzors should care about Medicaid, in their own self interest.
Comments