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Gov. plans to increase Medicaid reimbursements

Copyright © 2019 Albuquerque Journal

New Mexico’s Medicaid program is poised to get a $60 million shot in the arm that Gov. Michelle Lujan Grisham believes will help improve access to health care providers for all New Mexicans and alleviate the upward pressure on commercial insurance costs for employers, their workers and private individuals.

With a $13 million boost from the Legislature, matched by nearly $47 million in federal funds, Lujan Grisham’s administration plans to increase Medicaid reimbursement rates to health providers for the first time in more than a decade, said state Human Services Secretary David Scrase.

“This will improve access and quality of care for our Medicaid recipients, but we believe it will have a positive affect on the entire market in New Mexico,” Scrase told the Journal.

The Legislature approved the additional funding to raise Medicaid reimbursement rates after a series published in February by the Journal showed New Mexico fighting an uphill battle to attract and retain physicians while patients, both on Medicaid and those with other insurance, cope with long wait times for medical appointments.

One national recruiting firm ranked the state 48th-worst in the nation for physician access. Meanwhile, New Mexico’s physician workforce is among the oldest in the country, so future retirements are expected to further exacerbate the shortage.

The reimbursement rate increase, which still must go through a public hearing process, is expected to go into effect July 1.

Under the governor’s plan, Medicaid rates for the most frequently billed services will increase from 70 percent to 90 percent of what Medicare pays for such services. That still is below what private insurance pays in most cases.

But with more than 42 percent of New Mexicans enrolled in Medicaid, increasing reimbursement rates “strengthens our partnership with key health care providers,” Lujan Grisham said in a news release. “I want to thank state legislators for their joining in our commitment to a thriving and revitalized health care system across the state. These efforts will help us recruit and retain essential medical professionals and signal our unwavering support for both providers and their patients.”

During the administration of former Gov. Susana Martinez, reimbursement rates were cut amid state budget tightening.

Scrase said that during the recent 60-day legislative session, “Pretty much every legislator I talked to, both on Senate and House finance committees and every other place I went, had a story to tell about a provider in their district who was having trouble making ends meet, particularly those providers who had a high percentage of Medicaid patients.”

Scrase said the idea of raising reimbursement rates “resonated with everybody, and it makes sense.”

“You can’t really go 10 years without a pay increase and not expect something to suffer,” he said.

Randy Marshall, executive director of the New Mexico Medical Society, said the increase “is really important for New Mexico.”

“It really helps the pediatrician, family practice, OB-GYNs, who are greatly impacted because they have a huge percentage of patients that are on Medicaid,” he said. For pediatricians in some areas of the state, for example, “90 percent of their practice is going to be Medicaid.”

Scrase said Medicare and Medicaid cover more than 50 percent of New Mexicans, the highest share in the nation, while the percentage of the population with private insurance is among the lowest.

“So providers, in order to make up for the increase in their costs, have to raise their rates for commercial insurance, which is the only place they can raise their rates. And that’s why costs continue to go up,” Scrase said.

Many workers covered by employer plans have found themselves paying higher co-pays and deductibles as well as higher premiums as employers pass along some of the increased costs of health insurance coverage.

“So we hope by providing (Medicaid) payments fairly, what it costs them to do business, that will relieve some of that pressure over time,” he said. After the typical 18-month private insurance cycle, Scrase said, “We hope you’ll start to see changes in the marketplace.”

HSD’s Medicaid officials say the reimbursement increase is planned to be the first phase in a three-year plan designed to create fair, nationally benchmarked and annually adjusted provider rates, depending on state budget resources.

Dale Maxwell, CEO of Presbyterian Healthcare Services, said through a spokeswoman on Wednesday, “As a local not-for-profit health system, we appreciate the efforts of the governor and the Legislature to invest additional funding into improving the health of our communities. Increasing Medicaid reimbursements allows Presbyterian to continue expanding access to care as well as positively contributes to the recruitment and retention of physicians in New Mexico.”

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