In an attempt to address the physician shortage in Hawaii, Gov. Josh Green has asked the state Legislature to increase Medicaid reimbursement rates.
The Hawaii Physician Workforce Assessment reported that Hawaii County had a 40% physician shortage, with a need of roughly 187 providers. Both Hawaii Island and Maui tied for the county with the most severe shortage of doctors in the state.
“If they don’t increase the rates rapidly, you’re not going to have any doctors left in the community,” said Dr. Frederick Nitta, a Hilo-based physician. “There’s only going to be hospital employees or big group nonprofits left, and it’s already happening.”
Medicaid reimbursement rates are the rate at which doctors, pharmacies, hospitals and other medical service providers are reimbursed for the treatment of Medicaid patients, which includes eligible low-income adults, children, pregnant women, elderly adults and people with disabilities.
Green’s proposal would allocate $45 million in the fiscal years of 2024 and 2025 to bring the Medicaid reimbursement rates up to 100% of the reimbursement rates for Medicare, which is the federal health insurance program for people 65 or older.
Although a match would help significantly, some physicians are concerned that Medicare reimbursement rates are also too low.
A 2020 survey from the Medical Group Management Association found that 92% of practices nationwide reported that Medicare reimbursements did not cover the cost of caring for patients, a significant challenge for Hawaii, which has one of the lowest Medicare reimbursement rates in the nation.
The Centers for Medicare and Medicaid Services lists the current Medicare reimbursement rate at an average of roughly 80% of the total bill, leading many medical providers to deny patients outright as they are unable to cover the cost of their private practice.
“If you have Medicare or Medicaid right now and try to look for a doctor, good luck,” Nitta said.
Green’s budget request would bring an additional $42 million in federal funds each fiscal year to ensure access to high-quality health care for the Medicaid population.
According to healthinsurance.org, there were 441,676 Medicaid patients in the state as of September 2021.
In addition to the governor’s request, Senate Bill 397 and its companion, House Bill 1367, propose an increase of Medicaid reimbursements of up to 100% of the current Medicare rates.
“Currently, the private sector providers have less incentive to see Medicaid patients due to the low reimbursement rates,” said the Big Island Docs organization in written testimony for the Senate bill. The group represents more than 50 independent private practice providers on Hawaii Island that deliver care to over 50,000 patients.
“Our providers are struggling to keep their clinics open in a region that has a severe shortage of physicians,” the testimony continued. “Hawaii has the largest percentage of physicians in private practice in the nation, and it is important that the private practice of medicine remains sustainable for the health and well-being of our community.”
The House bill also has received support from several groups, including Kaiser Permanente Hawaii, Hawaii Pacific Health, AARP Hawaii, and Hawaii County Mayor Mitch Roth.
“A critical way to support our health care system is for the state to invest in Medicaid so reimbursements to providers match the level they presently receive from Medicare,” Roth said in written testimony. “Thereby allowing more providers to accept Medicaid patients and increase the availability of health care services throughout our community.”
The ongoing shortage has impacted a variety of different medical fields, including radiologists.
Dr. Guy Yatsushiro, president of Hawaii Radiologic Associates in Hawaii County, which provides radiology services throughout the island, provided testimony in support of the Senate bill.
“We were once a group of 15 radiologists, and now there are only six of us left, which required us to join a mainland radiology group,” he said. “We can no longer provide services without the support of a larger group and subsidize our work with areas on the mainland who have much better reimbursements. The six of us love this island and call Hawaii home, but we cannot recruit anyone to join us because of the poor pay and high expenses.”
As of Friday, the Senate bill passed a third reading and has been sent to the House. The House bill has passed a second reading and has been referred to the Finance Committee for further review.
“I would say 90% of the private physicians here have closed already,” said Nitta. “If they don’t do something soon, it’s going to be too late.”
Email Grant Phillips at gphillips@hawaiitribune-herald.com.
