Even though the economy is slowly recovering, revenue to fund state programs in Colorado is still very low, and Governor Ritter has declared a state of fiscal emergency. And that means that Medicaid claims submitted over the last couple weeks won’t be paid until July 9th – providers will miss out on payments that were scheduled for last week and later this week. The 2011 fiscal year begins in July, and the state is planning to push Medicaid reimbursements out in order to contain the budget for this year. The money will eventually be paid to the providers, but for book-keeping purposes it will be in a different fiscal year, and it also amounts to an interest-free short term loan from the providers to the state.
Some doctors see only a handful of Medicaid patients, and the payment delay won’t make much of a difference for them. But for clinics that treat mostly low-income patients, like the Rocky Mountain Youth Clinic where 75% of the patients are covered by Medicaid, the delay in payments will be a major problem. Those clinics will have to rely on donations, grants, and loans from other sources to cover their expenses until the Medicaid payments kick back in.
Sadly, the hospitals, clinics, and doctors who will be hardest hit by the Medicaid payment delay are the ones who can least afford to take a financial hit. Safety-net hospitals like Denver Health (where about 60% of the patients have Medicaid) are often the same places that are also treating people who have no health insurance at all.
During financially tough times, difficult decisions have to be made, and Medicaid payment delays are just one of the ways the state is cutting costs. The wide-spread expansion of Medicaid and SCHIP is one of the aspects of health care reform that is expected to increase the insured population in the US over the next few years. But unless there is money to reliably fund these programs, it’s likely that doctors might become more wary of accepting the coverage. Hopefully the 2011 fiscal year will be better for Colorado (and it will be if additional federal funds for Medicaid get approved), and providers who treat Medicaid patients will be paid on time for their services.