Dear Neighbors:
I hope you are enjoying the Labor Day weekend, as we say goodbye to unofficial summer and enter the home stretch for the primary elections on Wednesday, September 9.
Given the dominant position of the Democratic Party in Rhode Island’s government, the primary’s outcome often determines the outcome at the general election, even as voter participation in Rhode Island party primaries is typically a fraction of the general election turnout. For these reasons, I encourage you to exercise this right of citizenship on Wednesday if you have not done so already.
While it is up to each of us to cast our vote for the candidates we consider to best for our neighborhood and our State, in response to inquiries from neighbors, I explained my own choices to vote for Democratic Party candidates Helena Buonanno Foulkes for Governor, Keith Hoffmann for Attorney General and Brett Smiley for Mayor.
In this week’s letter I discuss the issue of recent report issued by the Office of Health Insurance Commissioner regarding primary care insurance rates.
A. Rhode Island’s Primary Health Care Access Gap
1. Primary Care Physician Compensation
In my discussions at the doors of our neighborhood this summer, you have raised the issue of access to primary care as one of our two top issues (the other being public education). In the State House, we have held hearings on access to primary care in our effort to understand the problem and find possible solutions. One recurring theme we have heard from doctors and providers is that Rhode Island does not pay its primary care doctors sufficiently to support a viable practice, particularly when there are opportunities in neighboring states to earn significantly more.
2. Current Policy Responses
The General Assembly has enacted several partial responses, including (1) State-sponsored conditional loans to health care professional students attached to commitments to practice in Rhode Island, (2) planning for a State medical school and (3) increasing reimbursement under Medicaid for Rhode Island primary care. Tuesday’s Report by the Office of Health Insurance Commissioner (OHIC), provides the latest analysis of this third policy tool to address the problem.
3. The OHIC Report
a. Findings
The OHIC Report contained several findings on the primary care issue that I had not previously appreciated, and which support new focused policy initiatives. The Report demonstrates at page 11 that Rhode Island is already competitive with its New England peers in Medicaid reimbursement rates for primary care (for example, the rate in Massachusetts is less than 80% of ours). On the other hand, the Report demonstrates at page 19 that Rhode Island’s Medicaid primary care reimbursement rate is around 40% lower than what would amount to reasonable compensation for a physician (based on OHIC’s independently derived model), and at page 13 that Rhode Island’s commercial insurance reimbursement rates are significantly lower than our region (where, for example, the Massachusetts commercial primary care reimbursement rate is around 250% of ours).
b. Recommendations
i. Medicaid rates
The OHIC Report recommends that Rhode Island increase Medicaid reimbursement rates to the level that would provide Rhode Island physicians with reasonable compensation. This would require additional funding of $42 million. In prior years, the federal government would pay for slightly over half of this amount, but that may have changed with the enactment of HR-1 last year. The Report also notes there may be issues with obtaining federal approval for this increase.
ii. Private insurance
The Report also recommends closing the private insurance gap between Rhode Island and Massachusetts. This presumably would involve an increase in Rhode Island private insurance rates, but the Report does not identify the specific regulatory process that could achieve this outcome and/or whether current State law provides sufficient tools for regulators to bring this change into the private market.
4. Conclusion
The OHIC Report informs us that Rhode Island’s previous multiyear effort to bring State Medicaid primary care reimbursement rates into parity with our neighbors was not by itself enough to compete successfully for primary care doctors. Instead, the Report recommends increasing Rhode Island’s Medicaid reimbursement rate to substantially exceed our neighbors, while also finding ways to increase private insurance payments for primary care.