LITTLE ROCK — Arkansas is blazing an uncharted path in Medicaid, and many doctors are leery of getting burned.
In less than a month, the state will become the first in the country to fundamentally change the way it pays for medical care. Medicaid - a $4.8 billion program serving about 780,000 Arkansans - and the two insurers that cover most of the rest of the state are teaming up on a new system to reward efficiency and root out waste.
On Thursday, the Center for Medicare and Medicaid Services, the federal agency that oversees state Medicaid programs, gave its stamp of approval for the initiative.
Dr. Alan Lucas has been practicing as a pediatrician for 30 years. The revision in how he will be paid has left him puzzled and contemplating a career change.
“A lot of doctors are thinking about retiring or selling their practices. I’ve thought about it,” said Lucas, 59, who practices in Conway. He said he’s considered seeking an administrative post.
Lucas said the state’s new initiative to contain costs, in collaboration with Arkansas’ two largest private insurers, will lead to rationing of care or unnecessary diagnoses. He’s also worried about increased liability and is suspicious of the motives of the private insurers.
Dr. Stacy Zimmerman has a slightly different take. She has practiced internal medicine and pediatrics in Clinton for nine years.
“I’m actually more Switzerland on this,” Zimmerman said. “I think it has a lot of promise and I’m excited by the concept, but I think doctors need a lot more input. A lot more work needs to be done.”
The overhaul could streamline often-cumbersome federal regulations attached to Medicaid, but Zimmerman - like Lucas - worries that it could interfere with the “art of medicine” and the doctor patient relationship.
Across the state, doctors, hospitals and other providers have been scrambling to understand the new payment system. State Medicaid Director Andy Allison, Arkansas Surgeon General Dr. Joe Thompson and insurance company representatives have toured the state to educate providers about the changes.
The state’s effort - known as the “Payment Improvement Initiative” - will require providers to deliver care within an acceptable price range based on 12-month statewide averages for specific illnesses or conditions or “episodes of care.”
If a doctor or other provider exceeds that price range for an episode, they will have to absorb half of the excess cost. On the other hand, if they finish the year billing less than the average cost for the designated episodes, they’ll split the savings with Medicaid or the participating insurers - Arkansas Blue Cross and Blue Shield or QualChoice of Arkansas. Those providers who bill within the acceptable range will not be penalized or rewarded.
Providers will continue to bill and be reimbursed as they had previously.
The plan will go into effect Oct. 1. For more than two months, providers’ costs have been tracked in a trial run.
However, questions, anxiety and suspicion linger among doctors despite the efforts of Medicaid and insurers to educate providers and include doctors in formulating the standards.
“It’s been discussed publicly for more than a year, yet at town hall meetings, physicians for the first time are hearing about it. A lot of them heard about it in the hallway, little bit here, a little bit there. They’re busy caring for their patients,” said David Wroten, executive vice president for the Arkansas Medical Society.
Pediatricians will be among the first to try the new system, using it when treating upper respiratory infections and attention-deficit (hyperactivity) disorder, common diagnoses in their practices.
Aimee Berry, executive director of the state chapter of the American Academy of Pediatrics, said many of the group’s members feel “ill equipped” to deal with the changes and want training, which the group is developing.
“At the end of the day, the [academy] and its members are most concerned that these changes can be seamlessly incorporated into practices to make certain that our children’s access to quality care isn’t interrupted or in the least bit compromised,” Berry said.
A recent survey by the group of more than 100 doctors found that 49 percent said they had few opportunities to learn about the changes. Fewer than half said they were at least somewhat prepared or understood the overhaul.
Those doctors who are familiar with the shift are coming around, Wroten said.
“I won’t say they’re accepting, I won’t say they’ve bought in, but they’re less skeptical. A lot of them are willing to give this a try,” Wroten said.
Wroten counted himself among the skeptical - at first. But Medicaid and insurers have been willing to listen. They scrapped initial plans for “bundled” payments - where a lead provider would divide a single lump sum among other providers - after realizing that Arkansas, especially in rural areas, didn’t have sufficient healthcare infrastructure to implement the plan, he said.
That engagement has continued, Wroten said, and the Arkansas Medical Society is now satisfied that its concerns are being heard.
“‘On board’ is a pretty strong word, we’re not out there advocating this, but we have participated in the process from day one, and we’ve had effective, adequate input,” Wroten said.
The society wants better liability protections for doctors, especially those “quarterbacks” who will be held accountable for a patient’s performance. An orthopedic surgeon, for example, in the future will be responsible for eliminating duplicated procedures among physical therapists or other providers who will assist in a medical “episode.”
“We need to say to doctors, if we’re going to ask you to participate ... then we’re going to have your back,” Wroten said.
Lucas is concerned about liability, but he also sees loopholes that might encourage doctors to inflate costs. His initial reports indicate that he is $16 below the ceiling for treating upper respiratory infections - otherwise known as common colds.
What will stop doctors from billing up to the acceptable limit? he asked.
“You’re leaving money on the table. You get back to this gamesmanship,” he said.
Better to let doctors make their own medical judgments without public or private insurers “looking over your shoulder,” he said.
Thompson, the surgeon general, said that the skyrocketing costs of medical care demand a change in how it’s paid for.
Doctors themselves have estimated that between 10 percent and 30 percent of care is unnecessary, Thompson said. Ridding the system of waste might be the last, best chance to fix what ails medicine, he said.
“We’re essentially shepherding financial resources so we don’t have to ration care,” Thompson said.
But the change, he acknowledges, is a hard adjustment. For decades, insurers have been putting “onerous restraints” on primary-care doctors like Lucas and Zimmerman, breeding suspicion of anything new.
“This is a shift even on top of that [history] for primary-care physicians. That is potentially hard to trust,” Thompson said. “But I see this as a way for physicians to reclaim leadership of the health-care system and regain control of their medical practice.”
Older doctors might not want to deal with the hassle and retire, Thompson said,but younger providers will find an opportunity to do something creative.
Zimmerman said she is excited about the “quarterback” component of the payment fix, seeing possibilities for restoring primary-care doctors’ primacy in medical care, but cautions that doctors need more flexibility than the current system allows.
She would like to see a physicians advisory board created.
“We’re in the trenches, taking care of patients each day,” she said. “I don’t think insurance companies should issue us protocols for how to treat patients. It’s important not to lose the art of medicine in the process.”
Front Section, Pages 1 on 09/09/2012