Hawaii may boost Medicaid payments to help patients access care

State lawmakers are considering boosting Medicaid reimbursement rates for health care providers in an effort to improve access to care for low-income residents who often struggle to find doctors willing to take their insurance.

In Hawaii, Medicaid reimburses providers at just 62% of Medicare rates for most services, according to the Kaiser Family Foundation, while private insurance pays significantly more than Medicare.

As a result of the low payments, doctors and other health care providers often don’t accept patients on Medicaid, the federal and state-funded health insurance program that primarily serves low income and disabled residents, leaving members struggling to find care.

Legislators are considering measures that would align Medicaid reimbursement rates with Medicare, the government health insurance program for seniors, which would give providers an estimated $73 million more a year in Medicaid reimbursements — $30 million from the state and $43 million in matching federal funds.

Hawaii already reimburses some primary-care serv­ices for Medicaid patients at Medicare rates. But if the legislation passes, Hawaii will become the only state to broadly match rates for professional services, according to the state Department of Human Services.

Versions of the legislation have passed both the state Senate and the House of Representatives and have received support from Gov. Josh Green’s administration. The Senate version of the measure is scheduled for a joint hearing Tuesday before the House Committee on Human Services and House Committee on Health and Homelessness.

The bill has received widespread support from Hawaii’s hospitals, health insurers, doctors and nurses. In addition to increasing access to care, advocates of the measure say it will help attract more health care providers to Hawaii, where there are shortages of both primary-care doctors and specialists.

Hawaii has a shortage of about 750 physicians, according to the health care industry, and surveys indicate that low reimbursement rates coupled with the high cost of living are major drivers.

The problems with access to care impact a wide swath of Hawaii’s population. The state’s Medicaid population has soared in recent years as a result of the COVID-19 pandemic. Nearly one-third of residents — and one-half of children — are now covered by the insurance, which in Hawaii is called Quest, augmenting the need to boost reimbursement rates, according to DHS. However, the percentage of Medicaid enrollees will likely decline as a pandemic-era program that automatically re-enrolled members, regardless of whether they remained eligible, comes to an end this year.

About one-third of Medicaid enrollees said they experienced significant delays in accessing care, according to a July survey conducted by Community First Hawaii, a nonprofit that advocates for better access to health care. Medicaid members were among the “most consistently underserved,” according to the survey.

Dr. Esther Smith has run a clinic in Kealakekua near Kona for the past four years. She says she’s overrun with patients because there are so few primary-­care doctors on the island who will accept Medicaid patients. Smith says she’s caring for about 2,500 patients and has four to eight new patients coming in every week.

Hawaii island already has a shortage of specialists, and Smith says that finding one who will see her Medicaid patients can be extraordinarily difficult. Nearly all the island’s physical therapists have stopped accepting Medicaid, she said. Smith is aware of only two who will accept the insurance.

“So somebody who has come back from having had a stroke or they broke their leg or they have back issues, we can’t get them back up to the level of function they were previously or it takes a lot longer,” she said. “So not only is it horrible for patients but it actually does impact beyond their lives. It impacts what they can do as members of the community.”

Smith said the island has lost nearly all of its neurologists and her patients often have to travel to Oahu for speciality care.

“It doesn’t sound that bad until you actually realize what it is like,” she said.

Smith noted that medically frail patients have to catch the first flight in the morning out of Kona to Honolulu, where they then get a medical transport to a clinic. She said there is no guarantee that the timing of when they arrive and their appointment will align.

“So it can be hours,” she said. “They have their appointment that lasts 15 minutes. Then they reverse the whole process. They lose a whole day every time they have to do this.”

Smith says that for her patients who work, it often doesn’t seem worth it and their conditions, therefore, worsen.

Dr. Janet Onopa has worked as a primary-care doctor in Honolulu for 35 years. She told lawmakers that access to care on Oahu is also bad.

“In talking with my colleagues in private practice, almost all do not accept Medicaid patients,” Smith said in written comments supporting the proposed legislation. “I was initially surprised to discover this, because I taught these docs as residents and I knew they intended to care for underserved and poor populations when they started practice; many had a passion to serving the needs of folks who were not well off. But a year or two into private practice, they found that they literally could not take Medicaid patients and maintain financial viability in their practice.”

Health care providers say that care for Medicaid patients has fallen mainly to the state’s community health centers, which are stretched thin.

In Hawaii, practically all Medicaid recipients are covered under a managed-care plan, which are offered by a mix of local nonprofit companies, including AlohaCare, Hawaii Medical Service Association and Kaiser Permanente, and two major for-profit health insurers, UnitedHealthcare and Wellcare. Enrollees are given a choice of which plan they want to sign up for, and the health insurers are given a fixed upfront payment for each member, with some flexibility in how they reimburse providers and at what levels.

The proposed legislation would set the minimum reimbursement rates for a long list of medical services and procedures at Medicare rates, according to Judy Peterson, Medicaid director and administrator for DHS’ Med-QUEST division.

“I think it would be really helpful for our health care providers and our Medicaid program and really help improve access, and help our health care providers overall who have been highly stressed with the pandemic,” Peterson said. “It has been very stressful. So I’m hoping that this goes through.”