Hawaii physicians, hospitals urge Gov. Lingle to release Medicaid physician payment funds

Hawaii hospital officials and physicians are concerned that $18 million in Medicaid payments, including $10 million in federal matching funds, could be lost if Gov. Linda Lingle (R) does not authorize the release of $8 million for Medicaid physician payments by June 30, the Honolulu Advertiser reports.

The state Legislature in 2007 approved the money for physician services provided under the state's Medicaid and Quest programs, which provide health care for low-income and uninsured residents.

According to the Advertiser, physicians and hospitals in the state have said there is an increasing gap between the cost of providing care and the payments they receive from the state and federal government, leading to what some have called a health care crisis that has driven many physicians to leave the islands. State Rep. Josh Green (D), a physician, said Lingle's delay in releasing the $8 million could increase the risk of losing the $10 million in federal matching funds. Green said the state Department of Human Services, which manages the Medicaid and QUEST program, has revised Medicaid reimbursement rates for physicians twice in the past 18 years. As a result, physicians increasingly face difficulty making up for the losses of providing care as costs increase. He said, "With state revenues under pressure, it makes sense that we leverage the federal matching funds available to us."

Lillian Koller, director of the human services department, said Lingle has agreed to release the $8 million for the 2009 fiscal year, which begins on July 1. Koller said, "This concern about releasing the money for retroactive bonuses to physicians going back a year didn't make sense to the administration, given the revised projections of the Council on Revenues and the fact that this money wasn't intended for bonuses," adding, "It was intended to be paid on a real-time basis to physicians who were rendering services to our Medicaid clients."

Koller said the $10 million in federal matching funds would not be in jeopardy because it is "the normal matching federal money that the federal government pays us in Medicaid every time we spend a dollar in state money" (Lum, Honolulu Advertiser, 6/9).