Medicaid Claw-back Threatens Health Clinic's Future

More than 90% of the patients at a small Memphis clinic are on Medicaid. The physicians there were stunned to learn that federal auditors wanted a $400,000 refund for Medicaid overpayments.

Medicos Para La Familia in Memphis, TN, is exactly the kind of clinic that policy wonks at the Department of Health and Human Services envisioned—and what Congress intended—when it crafted and passed 42 U.S.C. § 1396a(a)(13)(C), AKA the "Medicaid Enhanced Payment Statute."

"We are the dream team," says William Rodney, MD, founder of the clinic, and board certified in obstetrics, geriatrics, emergency, and family medicine.

The physicians at Medicos Para La Familia were stunned to learn that federal auditors wanted a $400,000 refund for Medicaid overpayments that were made under an initiative to expand primary care services in underserved areas–which is exactly what Medicos did.

The private clinic's bilingual staff provides healthcare for poor people in Memphis and Northern Mississippi. It's a full-service clinic with many of the same services as an emergency department, including imaging, and at a fraction of the cost.

More than 90% of the 40,000 patients that Medicos' five physicians and staff see each year are on Medicaid.

Kansas Hospitals Push Back on Medicaid Cuts, Tax Hike

"We deliver babies. We provide prenatal care," Rodney says. "You can walk in seven days a week and if you are sick, you do not need an appointment. And I especially mean pregnant women. We lowered the rate of babies dying in Memphis because of this system."

When the Medicaid Enhanced Payments came along in 2013 and 2014, Rodney says, Medicos welcomed the windfall.

Unfortunately for Medicos, and the patients it serves, the Centers for Medicare & Medicaid Services added requirements that called for physicians receiving the enhanced payments to be board certified in primary care.

"We got caught in a trap because one of our older physicians was no longer board certified, even though he had practiced family medicine for 35 years," Rodney says. "His name is Rickey Carson. If you wanted a poster child for what a family doctor looks like you would see Rickey Carson's face. He is in the office every day, sees 30 to 35 patients a day. Patients love him."

"Ricky was down on the books for about 4,000 to 5,000 patients in both 2013 and 2014, but he gets a letter saying we want our money back," Rodney says.

"In the meantime, this primary care bonus has been spent for enrichments for poor people; more staff, more hours, some equipment we needed for pregnant patients. Now we are looking at a payback bill of $400,000 over two years. We don't have $400,000. We are going to close the practice if we don't get some relief."

With their appeals to common sense falling on deaf ears, Carson and 20 other primary care physicians from across Tennessee have filed suit in U.S. District Court in Nashville, asking a judge to halt efforts to reclaim more than $2.3 million that was paid out during the two-year enhancement period. [View the complaint.]

CMS 'Overreach'

The plaintiffs argue that the CMS rules change was arbitrary, runs counter to the intent of the law passed by Congress, and has the potential to greatly disrupt care access to thousands of poor people with few other options beyond the nearest emergency department.

The plaintiffs have the support of the Tennessee Medical Association, which has accused CMS of "blatantly overreaching its authority and misinterpreting the intent of Congress."

"These arbitrary actions by CMS punish doctors trying to do the right thing and put some of Tennessee's most underserved populations and communities at even greater risk," TMA general counsel Yarnell Beatty said.

Let's recap: The Medicaid Enhanced Payment Statute, which was designed to expand healthcare access to underserved areas by paying physicians more money, now threatens to do exactly the opposite; take money away from physicians and threaten the solvency of their practices, which would worsen care access in underserved areas.

How did such a well-meaning piece of legislation mutate into its evil twin? This is what happens, Rodney says, when policy makers and politicians working at the 30,000 feet don't understand how medicine is practiced in the fly-over.

"The road to hell is paved with good intentions," he says.

"Legislators really wanted to help and they did, kind of, but most legislators really don't understand medicine as it is practice outside of Boston or Washington or New York City. You have a policy elite running things, and once you get out of the Beltway, we have a saying down here, Massachusetts is a lot different from Mississippi."