New Mexico is cutting Medicaid payments by less than originally planned in response to concerns raised by Native American tribal leaders, hospitals and other healthcare providers.
The Human Service Department that oversees Medicaid healthcare for the poor and disabled also is easing cuts to dentists and the University of New Mexico Hospital. Medicaid providers were notified of the changes as many new rates went into effect Friday.
New Mexico is struggling to keep up with growing Medicaid obligations, as state revenues recoil from the downturn in energy markets and policy makers seek to preserve spending increases on education and public safety.
Reimbursement rates are still being cut by 2% for dentists, down from the proposed 3%, and by up to 5% at all hospitals. The University of New Mexico Hospital had been singled out for higher cuts than other hospitals.
The amended plan saves the state at least $19.5 million annually, Human Services Department spokesman Kyler Nerison said. The original rate changes were designed to reduce annual Medicaid costs by as much as $33 million for the state, or $161 million including federal spending.
Opponents of the Medicaid rate changes say they will starve the local health care sector of federal matching funds, and that the state has not provided enough evidence to back up its assertion that payment cuts will not reduce access and services.
The Human Service Department told Medicaid providers that it would file a Medicaid access-monitoring plan in the next several weeks and consider public comments. Access-monitoring plans by states are a new requirement of the federal government.
New Mexico officials say Medicaid patients are resorting increasingly to emergency room visits for routine medical issues amid gaps in provider networks. Emergency room costs for Medicaid patients in 2015 increased by 17 percent from the previous year to $116 million.
The rate changes were based on meetings with industry and community stakeholders, feedback from the CMS and extensive analysis, Nerison said.
"As a result of this process and because of a slightly improved budget situation for Medicaid, we were able to make adjustments to our initial proposal that address concerns from tribal communities, hospitals and other providers," he said.
The Human Services Department did not describe specific concerns raised by Native American leaders that led to amendments. Officials met in person with tribal representatives in early June.