Virginia Gov. Mark Warner is raising Medicaid payments to obstetricians in his state in an effort to ensure that patients, particularly in rural areas, will continue to have access to their services.
The extraordinary step was taken in mid-August in response to at least four hospitals in the state dropping OB/GYN services during the past year because of high malpractice insurance rates and stagnant Medicaid reimbursements. The facilities, according to the Virginia Hospital & Healthcare Association, are 78-bed Russell County Medical Center in Lebanon; 146-bed Alleghany Regional Hospital in Low Moor; 76-bed Rappahannock General Hospital in Kilmarnock; and 134-bed Buchanan General Hospital in Grundy.
With the increase, Virginia will pay $1,502 for a nonsurgical delivery, up from $1,121, and $1,702 for a Caesarean section, up from $1,270. The new rates go into effect Sept. 1 and represent the first increase in Medicaid payments to doctors in the state in 14 years, said Ann Hughes, legislative director for the Medical Society of Virginia. The new rates mean the state will pay about 80% of what private payers pay, up from 60%.
"Today's action represents an important first step in addressing the problems facing communities all over the state in maintaining access to quality obstetrical care," Warner said in a news release. In fiscal 2003, the state spent $3.4 billion on Medicaid. Under the new plan, issued as an emergency order, the state will pay half of the additional $14.4 million that will be spent on the program. The federal government will pick up the other half.
During the past year as Republicans tried to push malpractice reform legislation through Congress, obstetrics/gynecology has been singled out as a specialty in which rising malpractice insurance rates were forcing many providers to stop seeing patients or to move to parts of the country where insurance rates were more reasonable. Legislation seeking to cap noneconomic damage awards given to patients has so far failed in Congress.
According to a survey released in July by the American College of Obstetricians and Gynecologists, the rise in insurance rates has forced one out of every seven of the college's fellows to stop practicing obstetrics. Another 22% of respondents said they reduced the amount of high-risk obstetric care they provide for fear of being sued.
Virginia, according to the college, is one of 23 states where insurance rates threaten the availability of physicians who deliver babies. On average, OB/GYNs pay $60,000 to $70,000 a year in malpractice insurance, "easily a 300% increase over the past four years," Hughes said.
Last year, legislation was introduced in Virginia's Legislature to cap noneconomic damages at $250,000. The bill failed to get out of committee, but legislators are now studying the situation to come up with possible solutions.