Vermont Medical Society says Governor’s VHAP Expanded Plan “A Broken Commitment”

by Angela Chagnon

Montpelier, Feb. 15 – Paul Harrington, Vice President of the Vermont Medical Society (VMS), spoke against the Governor’s plan to roll Catamount into VHAP, calling the proposal a “broken commitment”.

“When VMS agreed to support the creation of Catamount, it was with the understanding that the physician fee schedule would be established in statute to equal the 2006 Medicare fee schedule, plus 10 percent, with an annual update based on the MEI (Medicare Economic Index),” the VMS testimony reads. “VMS would have strongly opposed the legislation creating Catamount if its physician reimbursement had been based on the Medicaid fee schedule. The proposed change represents a broken commitment.”

Commercial insurers typically pay physicians and hospitals 125% to 135% of Medicare rates. Medicaid rates are between 58% to 78% of the Medicare rate. The new program, called VHAP Expanded, would use the much lower Medicaid rates, resulting in a physician reimbursement reduction of 32.8%. Harrington said that although doctors would not refuse to see new patients, they “likely would not take on new patients.”

“To move people from Catamount to Medicaid would sell things at a loss,” said Harrington. “You can’t stay in business.”

The Medical Society said that they strongly oppose the plan, but would be willing to work with the administration and legislators. “This is the wrong policy particularly while on the cusp of providing universal healthcare,” Harrington remarked. He added that only a small number of providers see 50% of Medicaid patients, and Medicaid transactions make up only 23% of business.

A major concern that Harrington addressed was that the Governor’s plan would “fundamentally change eligibility for Medicaid”, and would make Medicaid available to citizens of any income. “Since there are no personal income limits for Catamount, the proposal would allow high-income Vermonters to enroll in Medicaid,” he noted.

The VMS indicated another problem that would affect Vermont’s economy. “Employers that continue to offer health insurance will likely see an even greater cost shift due to the increased number of Vermonters that would be covered by the below cost reimbursement of the Medicaid program and the increase in uncompensated care based on failure of Medicaid patients to pay a new higher $1200 deductible.”

According to a 2008 physician’s survey by the Department of Health, only 69% of physicians participating in Medicaid are accepting new patients, while 80% are “accepting new patients in general.”

Harrington said that the plan was in direct contradiction with the Governor’s health care bill H.202, which states in the proposed 18 V.S.A. section 9374 (a) that it was the “intent” of the legislature to “ensur[e] that the amount paid to healthcare professionals is sufficient and distributed equitably.”

The VMS warns, “Expanding enrollment in Medicaid with its below cost physician reimbursement without any limits on enrollee’s income will put physicians’ ability to provide care to their patients at risk and add to the cost-shift.”

It looks like the Governor’s plan for single-payer healthcare is already hitting a major snag, and this is only the beginning.