The state’s plan to save up to $33.5 million by cutting Medicaid payments to New Mexico doctors, hospitals and dentists would violate federal law and regulations if it results in the denial of services to low-income patients.
That’s the argument two top hospital officials are making in written comments to the state Human Services Department.
Steve McKernan, CEO of University of New Mexico Hospital, said the state’s plan to single out UNMH for steeper cuts than other hospitals could have the effect of denying Medicaid patients access to specialty services offered only by UNMH, including Level 1 trauma care.
If the state enacts the Medicaid rate cuts July 1 as proposed, “it will more severely constrict already limited scarce resources for specialty services,” McKernan wrote in a letter to Human Services Secretary Brent Earnest.
Jeff Dye, president of the New Mexico Hospital Association, expressed similar concerns, saying that steeper cuts for UNMH would diminish the hospital’s “capability to provide services to recipients as the state’s only Level 1 trauma center and the largest Medicaid provider and a significant statewide referral center.”
Dye also said the proposed cuts would endanger birthing services at rural hospitals, because Medicaid is the largest payer of obstetric and newborn services. Since 2010, hospitals in Artesia, Clayton, Las Vegas and Tucumcari have ended birthing services.
In April, the state Human Services Department proposed reductions in Medicaid fees that would cut payments for hospital inpatient services by 8 percent to UNMH and 5 percent to other New Mexico hospitals.
The proposal would also cut payments for hospital outpatient services by 5 percent for UNMH and 3 percent for other hospitals. It would also cut payments by 2 to 4 percent for doctors and 3 percent for dentists.
McKernan said rate reductions should be levied equally among all hospitals to ensure that Medicaid patients aren’t denied “unique specialty services not available at other hospitals in New Mexico.”
Under federal law, states are required to ensure that Medicaid patients receive medical services comparable to other patients in the same area, McKernan contends. Medicaid payment cuts that restrict patient access and “create stress on safety-net providers” would violate the law, he said.
UNMH “is the state’s only major teaching hospital, the state’s only Level 1 trauma center, and serves as the largest safety-net hospital in New Mexico,” McKernan said. UNMH also serves patients transferred from other hospitals around the state who need specialized care, he said.
The Human Services Department said in a written statement it is evaluating the comments and will perform further analysis as it prepares a final proposal, scheduled for release this week. Cuts would take effect July 1.
Medicaid enrollment has spiked to 850,000 since the Martinez administration expanded the program in 2014. Enrollment is expected to grow to 925,000 by July 2017. Lawmakers required the state to cut Medicaid costs when it passed a $6.2 billion budget earlier this year.