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NC Doctors Will Have To Pay Back 3 Percent Of Medicaid Payments

Provided by the NC Medical Society – Chip Baggett – Jennifer Gasperini – Dave Horne
* Indicates practices exempt in 2014 due to ACA match funds. Recoupment estimate for first two months of 2015 only.

Doctors across North Carolina will soon have to pay back a chunk of what they earned treating Medicaid patients over the past 14 months. The retroactive pay cut is part of a law passed in 2013 and tweaked last year. As you can imagine, doctors aren't too happy about giving back money the state has already paid them.

North Carolina health leaders are basically saying, OK doctors, those Medicaid payments we've given you over the past 14 months? We need 3 percent of that back.

At Carolinas Emergency Physicians in Cleveland County, Chief Financial Officer Dr. Jim Lowry says that adds up to about $80,000.

“What that does for us as a business is decrease our salaries in 2015,” he says. “We have 25 providers, so that reduction will be spread across their income.”

The Medicaid cut wasn't supposed to be retroactive. Lawmakers passed a bill in 2013 to set up a sort of reward system for Medicaid doctors – rates would go down 3 percent, but the best doctors could get some of that money back. The cut was supposed to kick in Jan. 1, 2014.

But deputy secretary of the state health department Dr. Robin Cummings says that system was too complicated to set up as quickly as lawmakers wanted.

“And so in 2014 what happened was the legislation was adjusted to simply be a 3 percent rate reduction,” Dr. Cummings says.

Lawmakers scrapped the reward system but kept the cut and its start date – at least on paper.

In practice, the state kept paying doctors the old, higher Medicaid rate.

“Sometimes legislation simply takes time to implement,” Dr. Cummings says. “All along, we've been communicating with our provider groups that this is coming, and so yeah, multiple times, this should not be a surprise.”

Dr. Cummings says as state health leaders kept delaying the cut, they made it clear it would still be retroactive to the original start date.

The N.C. Medical Society, which represents doctors, doesn't refute that. But CEO Bob Seligson says doctors feel like the state is punishing them for its own 14-month delay. 

“They don't go back on any piece of legislation and say well, we just passed a law banning smoking, now we're going to hold you accountable for a smoking violation a year ago when the law wasn't in effect,” he says.

The N.C. Medical Society is lobbying lawmakers to get rid of the retroactive part of the cut.

In Cleveland County, Dr. Jim Lowry isn't thrilled with it but offers this perspective.

“After all is said and done, North Carolina has pretty good reimbursement rates for physicians compared to some neighboring states and the rest of the country,” Dr. Lowry says.

At Lake Norman OBGYN, Dr. James Al-Hussaini agrees with that point. But he says the retroactive nature of the cut still adds up, especially for smaller practices.

“That can be devastating in the short term as far as cash flow, and unfortunately, those tend to often be the practices in the most underserved areas,” he says.

State health leaders are still deciding whether doctors will have to pay back the money all at once, or if it can come out of future payments.