MDwise Hoosier Alliance has notified physicians it will eliminate the $3 per member per month quality incentive payment to Medicaid providers under their participating provider agreement.

Physicians in the plan received letters April 15 stating, “the Office of Medicaid Policy and Planning (OMPP) is withholding a percentage of the MCOs capitation payments in an effort to ensure that the MCOs and their participating providers meet the OMPP quality goals.” The letter indicated that the fee schedule reimbursement rate for covered services will remain the same.

Physicians receiving the letter have been asked to sign amended agreements by May 15. Not signing will mean their MDwise agreement will terminate July 15.

The ISMA is working to confirm how other Medicaid managed care organizations will implement similar reductions and contract adjustments as mandated by OMPP.

James Shelton, director network management, MDwise Hoosier Alliance confirmed, “This is a cost reduction measure due to the state’s recent withhold from our delivery system of 1.25 percent for 2009.”

He noted to receive these funds from the state, it is mandatory that all delivery system network providers attain 90 percent of the 2009 quality goals.

If providers can demonstrate they have met the quality goals, they will be reimbursed in the fourth quarter of 2010, according to the MDwise notification letter.

In a meeting with Shelton April 21, the ISMA suggested that this change in the program penalized those providers who met the goals when others in the network did not.

Dan Kelsey, ISMA practice advisory group director, urged MDwise Hoosier Alliance to consider using modifiers to give physicians credit for attempting to meet the quality goals as is done in Medicare.

Earlier this month, the Family and Social Services Administration withdrew its notice of intent for a 5 percent cut in physician Medicaid reimbursement. Shelton said MDwise Hoosier Alliance was notified in January of the 1.25 percent withhold.

James Bertsch, D.O., a Cambridge City family physician, expressed his concerns with the reduced Medicaid reimbursement. As a solo physician, he has 1,100-1,200 Medicaid patients and has an open panel.

“I’m the only one taking new Medicaid patients. They need care. I do it to help the area, but Medicaid doesn’t pay well and now they want to take more money away. I’m sticking my neck out, and I’m getting it cut off,” Dr. Bertsch said.