Doctors: Lingle broke promise on funding

by Linda Chiem:  lchiem@bizjournals.com  /955-8042

Hawaii health-care advocates and doctors are at odds with Gov. Linda Lingle over her refusal to release $8 million earmarked last year to reimburse doctors who care for underinsured or uninsured patients.

The doctors say Lingle has reneged on a promise she made last year to release the money by June 30, which now jeopardizes an additional $10 million in federal matching funds.

Lingle has indicated through a spokeswoman that she will release $8 million for the coming fiscal year, which begins July 1, but not for the current year.

The money was appropriated last year under Act 284, which Lingle allowed to become law without her signature citing “serious concerns” that the funds were appropriated outside of the state’s six-year budget. It was designed to increase payments to doctors who treat Medicaid and Quest patients — mostly the aged, blind and disabled.

Doctors on average get reimbursed less than 60 percent of what it costs them to treat these Medicaid patients. The measure passed by the Legislature would raise reimbursements to 100 percent for services offered in 2007 and 2008.

The measure was aimed at deterring doctors from dropping out of the program or refusing altogether to treat Medicaid patients. Doctors are not required to treat Medicaid patients in Hawaii but many do despite the lack of full reimbursements.

“It is extremely upsetting because these doctors have been treating patients in good faith on what was promised to them,” said Virginia Pressler, executive vice president of strategic business development for Hawaii Pacific Health. “It just does not make sense to me.”

Act 284 set aside a total of $16 million in the two-year budget for fiscal 2008 and 2009 to reimburse the doctors. Lingle said last year she was prepared to release the first $8 million to cover services provided since last July, but has since decided not to release it because of budgetary concerns amid the shaky economy.

Lawmakers, doctors, commercial health insurers and community groups such as Faith Action for Community Equity and Hawaii Coalition for Health have been pushing hard for the release of the money saying the $8 million is desperately needed and they’re not buying the “budgetary concerns” reasoning.

The governor’s office directed PBN’s requests for comment to Lillian Koller, director of the state Department of Human Services, who oversees the state’s Medicaid fee-for-service and Quest managed-care programs.

In a statement to PBN, Koller said Lingle is taking the “most prudent approach” by withholding the 2008 money, which she considers a retroactive pay hike for services already rendered. However, she intends to release the $8 million for fiscal 2009, which starts July 1, which will come with $10 million in federal matching funds, Koller said.

“The administration’s decision to withhold Act 284 funding for the 2008 state fiscal year is a cautious move,” Koller said in the prepared statement. “This decision reflects a commitment to keep the state fiscally sound, both now and in the future, in light of reduced revenue projections and rising expenditures.”

She said the state will begin sending checks today to doctors, hospitals and outpatient Medicaid providers that reflect an increase in the reimbursement rate to 60 percent, part of a previous law. The higher rate applies to services going back to July 1, 2006, and is the first such across-the-board increase in 11 years, she said.

Doctors say it’s still not enough to make up for years of underpayments.

“I think it’s unreasonable and there’s resentment because it’s treating us like we’re stupid … ,” said Dennis Ayon, an internist who practices in Wahiawa. “Medicaid or Quest patients make up 10 percent of my practice, [and that percentage] keeps growing, and with my overhead we can’t afford to just take the loss on the reimbursements.”