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A new federal law will require Medicaid reimbursement rates to be no higher than Medicare reimbursements, which critics say fail to account for Hawai\u02bbi\u2019s high cost of living. (Nick Grube\/Civil Beat\/2022)<\/p>\nA senior Hawai\u02bbi health care leader says issues with government reimbursements are leading to \u201ca state of non-viability\u201d for the state\u2019s entire health care system.<\/p>\n
Doctors in pricey San Francisco have a decided financial advantage over their peers in equally expensive Honolulu when it comes to treating elderly patients insured by Medicare. The feds pay San Francisco doctors a lot more for exactly the same office visit.<\/p>\n
Now, thanks to the recent One Big Beautiful Bill Act, Hawai\u02bbi doctors soon will face the same disadvantage when they\u2019re treating low-income people served by Medicaid \u2014 despite promised funding from the Legislature to shore up Medicaid payments.\u00a0<\/p>\n
The result is an impending financial cliff that could significantly impede access to health care for more than a quarter of the state\u2019s population, including many of its most vulnerable residents.\u00a0<\/p>\n
A new federal law will require Medicaid reimbursement rates to be no higher than Medicare reimbursements, which critics say fail to account for Hawai\u02bbi\u2019s high cost of living. (Nick Grube\/Civil Beat\/2022)<\/p>\n
Medicare providers already have been feeling the pain of reimbursement rates that fail to account for Hawai\u02bbi\u2019s high cost of living, putting a strain on doctors and hospitals that care for elderly Medicare patients, said Dr. Jack Lewin, administrator of Hawai\u02bbi\u2019s Health Planning and Development Agency.\u00a0<\/p>\n
The Legislature has pledged funds to raise Medicaid reimbursements, Lewin said. But Congress banned that practice when it passed the\u00a0One Big Beautiful Bill Act<\/a>, which President Donald Trump signed into law in July. Starting in 2028, Hawai\u02bbi will have to begin reducing Medicaid reimbursements to match Medicare\u2019s inadequate reimbursements, Lewin said.<\/p>\n To Lewin, there\u2019s nothing beautiful about the federal law.<\/p>\n \u201cIt just adds more pain coming soon,\u201d Lewin said.<\/p>\n We want to hear from you<\/p>\n \n Are you struggling to find a doctor who takes Medicare? Fill out our brief form \u2014 we won\u2019t share your name without your permission.\n <\/p>\n Lewin, Gov. Josh Green and Hawai\u02bbi\u2019s congressional delegation are working to resolve the issue with Hawai\u02bbi\u2019s Medicare reimbursements, which would also fix the impending Medicaid issue, Lewin said.<\/p>\n In the meantime, Lewin said, Hawai\u02bbi health care providers are struggling. The proposed One Health deal between HMSA and Hawai\u02bbi Pacific Health, which proponents say will shore up the state\u2019s health care system, wouldn\u2019t be necessary if the feds paid Hawai\u02bbi doctors the same as doctors in other high cost-of-living locations.<\/p>\n \u201cThat proposal would likely not be on the table,\u201d Lewin said, \u201cif we had the adjusted reimbursements that we need.\u201d <\/p>\n Federal Law Limits State\u2019s Ability To Help Medicaid<\/p>\n Although Medicare and Medicaid both receive funding from the federal government, they\u2019re separate programs serving different populations. Medicare covers older people and is entirely funded by the feds. Medicaid covers low-income people with money from the federal government and states.\u00a0<\/p>\n As of March, some 315,000 Hawai\u02bbi residents were covered by Medicare, with about 169,000 of them opting for Medicare Advantage plans funded by Congress but administered by private insurance companies. Approximately 429,000 Hawai\u02bbi residents were covered by Medicaid as of January, according to the Hawai\u02bbi Department of Health.<\/p>\n That leaves about half the state\u2019s 1.4 million residents relying on government programs that are stingy when it comes to compensating doctors. Combined with an aging population and physician shortage, the low reimbursements set the stage for a deepening crisis, said Lewin, a former president of the American Medical Association and director of the Hawai\u02bbi Department of Health.\u00a0<\/p>\n \u201cMedicare reimbursements we get do not accurately reflect the cost of doing business and providing care.\u201d<\/p>\n U.S. Rep. Jill Tokuda<\/p>\n The problem lies with the way Congress sets Medicare reimbursement rates, using a complex formula that factors in baseline treatment costs and geographic variables. The geographic factors are supposed to account for the value of the physician\u2019s work and the cost of running a practice, including rent, utilities and staff, in various locales. The cost of medical malpractice insurance plays a small role in the formula.\u00a0<\/p>\n The basic problem in Hawai\u02bbi is that Congress\u2019 formula doesn\u2019t fully account for the painful realities of Hawai\u02bbi\u2019s nation-leading living costs. Hawai\u02bbi\u2019s costs of housing, gasoline and food rival those in the nation\u2019s most expensive places, but the formula doesn\u2019t reflect that.<\/p>\n In fact, the formula puts a lower value on the work Hawai\u02bbi doctors put in for particular procedures than the national average \u2014 and only slightly more than the same procedures in low-cost states such as Alabama, Indiana, South Dakota and Vermont. Never mind that it costs a fortune for the Hawai\u02bbi doctor merely to live here. The physician work index doesn\u2019t account for that.\u00a0<\/p>\n The result is the value placed on the work of San Francisco doctors is 9.5% higher than that of their peers in Hawai\u02bbi, and the work of Alaska doctors is valued 50% higher than counterparts in Hawai\u02bbi.\u00a0<\/p>\n According to the formula, the cost of running a medical practice in Hawai\u02bbi also is considerably lower than in other high-priced locales. The formula recognizes that it costs a lot more to run a doctor\u2019s office in Hawai\u02bbi than in, say, Alabama. But according to the formula, running a practice in San Francisco costs 24% more than in Hawai\u02bbi.<\/p>\n Finally, Hawai\u02bbi tort reform laws have reportedly reduced the costs of medical malpractice insurance, which hurts Hawai\u02bbi doctors when Medicare considers how much to reimburse them, although\u00a0the insurance piece accounts for only 4% of the weighted formula<\/a>.<\/p>\n All of this gets factored into what Medicare pays Hawai\u02bbi\u2019s doctors, creating a big gap between them and their counterparts doing the same work in other pricey markets.\u00a0<\/p>\n When a Medicare patient in Honolulu goes for a routine, moderately complex, 40-minute follow-up appointment, for example, the feds reimburse the Hawai\u02bbi doctor $202. A doctor in San Francisco gets about $235, roughly 16% more. Multiplied over the course of the year, it can add up to tens of thousands of dollars less for the Hawai\u02bbi doctor. Hospitals face the same sort of discrepancy.\u00a0<\/p>\n \u201cThe bottom line is, the Medicare reimbursements we get do not accurately reflect the cost of doing business and providing care in an island state like Hawai\u02bbi,\u201d U.S. Rep. Jill Tokuda said.<\/p>\n State And Federal Leaders Trying To Solve Problem<\/p>\n The situation could soon get worse. While the federal government covers the entire cost of Medicare, the state pays a portion of Medicaid reimbursements. Hawai\u02bbi lawmakers have stepped in to boost Medicaid reimbursements 20% higher than the Medicare rate and planned to raise it further to 50% higher, Lewin said.\u00a0<\/p>\n But that\u2019s going to change thanks to Congress, which has mandated that Medicaid reimbursement rates can\u2019t be higher than Medicare rates, even if the states are footing the bill.\u00a0<\/p>\n The effect of the law won\u2019t be immediate, Lewin said. The state will have to lower Medicaid reimbursements incrementally, he said, only reaching the Medicare level by 2030.<\/p>\n Asked about Congress\u2019 move to limit Hawai\u02bbi\u2019s funding for Medicaid, state Sen. Angus McKelvey, vice chair of the Senate Health and Human Services Committee, called the One Big Beautiful Bill Act \u201cone big barrel of bullshit.\u201d<\/p>\n The bill isn\u2019t all bad for Hawai\u02bbi. The measure includes\u00a0$189 million to fund rural health care programs in 2026<\/a>, with additional $189 million awards annually through 2030, part of a $50 billion national investment.<\/p>\n But that additional money doesn\u2019t make up for Hawai\u02bbi\u2019s inadequate Medicare reimbursement rate. In May, U.S. Sens. Brian Schatz and Mazie K. Hirono and U.S. Reps. Tokuda and Ed Case\u00a0introduced bills in both houses of Congress to fix the problem<\/a>.<\/p>\n The Protecting Access To Care in Hawai\u2018i Act would increase payments to doctors up to 38%, putting Hawai\u02bbi on par with Alaska, which gets special consideration because of its remote location.<\/p>\n The Green administration is also working on the issue. Lewin\u2019s office has commissioned a study to show Congress both the initial cost of raising Hawai\u02bbi\u2019s reimbursement rates and long-term benefits of having more doctors providing access to preventative care for Medicare patients. Green is also seeking support from the Trump administration as he\u00a0negotiates land leases with the U.S. military<\/a>, Lewin said.<\/p>\n Ultimately, Lewin said, with medical treatments for half of Hawai\u02bbi\u2019s patients being paid for with government funding, the low reimbursements affect everyone needing health care in the state, as well as the doctors who treat them.<\/p>\n \u201cThe public side of this is pulling everyone down,\u201d he said, \u201cand we\u2019re heading toward a state of non-viability.\u201d<\/p>\n Can\u2019t see the form below? Use this link.<\/a><\/p>\n Loading\u2026<\/p>\n
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