NORTH LITTLE ROCK — Dr. Gregory D. Wood, an obstetrician who practices in North Little Rock, keeps busy delivering between 450 and 500 babies a year.
So he wasn’t listening to The Diane Rehm Show on National Public Radio on Wednesday when state Department of Human Services Director John Selig used him in an anecdote to illustrate how Arkansas is the first state in the country to use doctors as front-line “quarterbacks”responsible for eliminating waste and reducing Medicaid costs.
Selig said on the nationwide broadcast - without naming Wood - that the doctor’s average costs had exceeded acceptable limits during the year ending in July because an unnamed hospital was keeping his maternity patients longer than necessary.
Selig said the unnamed doctor had spotted the problem after discussing his Medicaid billings with the Human Services Department.
Arkansas listeners were soon asking - which doctor and which hospital?
On Thursday, Selig said the example he was given by his customer-service team might have been somewhat garbled, but he said the thrust of his comments was that the payment overhaul is working.
“This happened exactly like we wanted: When [Wood] saw something in his report that he had concerns about, he contacted members on his team to see him if he could fix it,” Selig said in an interview.
The Medicaid paymentimprovement initiative, designed to curb costs in a $4.6 billion program that serves about 780,000 Arkansans, designates providers to be “quarterbacks” who are financially responsible for keeping costs down and eliminating unnecessary tests and procedures. Starting Oct. 1, Medicaid providers’ costs will be tracked for 12 months and averaged for certain “episodes of care,” or specific illnesses or conditions.
Providers whose averages fall below the acceptable cost thresholds will be given half the savings. Those, wholike Wood, end up exceeding the acceptable range will be responsible for half of the excess costs. Those providers who fall within the acceptable range will break even.
In July, providers received performance reports - a sort of practice run - to show them how their averages did the previous year.
That’s the report that Wood received that showed he had billed Medicaid $1.47 million - $49,108 more than the new guidelines would allow.
“Your average cost is not acceptable,” read the report, obtained by the newspaper through a Freedom of Information Act request.
The report surprised Wood and left him worrying about future overruns.
“I don’t want to write a check. What do I need to do to get on board?,” he remembers thinking.
After a few frustrating weeks trying to get answers from customer service at the Human Services Department, Wood met with department officials at the end of August.
At that meeting - as described in an department e-mail obtained through a Freedom of Information Act request - Wood discovered that hospital stays constituted the majority of his excess costs.
Selig told NPR that an unnamed hospital was responsible for Wood’s high costs.
“And we dug further and found out that the hospital he was using was keeping patients - the mothers - on average an extra halfday or day longer than other hospitals, and that was causing his cost to go up. And he said, well, I can talk to the hospital about that, and he did do that. And they said, well, we do that because we can get paid for it,” Selig said, according to the show’stranscript.
But Wood said it’s not the hospitals that are the problem. He delivers babies at Baptist Health Medical Center in Little Rock and St. Vincent Infirmary Medical Center in Little Rock.
“Neither hospital has ever come to me and said, ‘Can you let someone stay longer because it’ll help our bottom line?’ In fact, there’s a bed shortage. Nursing coordinators are always asking me if I have someone ready to go home because they need the bed,” Wood said.
Selig told the Arkansas Democrat-Gazette that he didn’t know the specifics of Woods’ case and didn’t even know the name of the hospital. He said that “it’s possible” that his grasp of the specifics of Woods’ case might not have been accurate.
The problem, says Wood, has been his patients’ expectations.
“People talk. Everyone who comes into my office knows how long they can stay,” Wood said, referring to the number of days that Medicaid will reimburse for a postnatal hospital stay. “New mothers often want to stay a little longer. They’re getting used to breast-feeding. It’s overwhelming.”
Medicaid doesn’t limit the number of days that a mother can stay in a hospital after giving birth. That is determined by medical necessity. Stays longer than four days are evaluated by the Human Services Department.
Wood said he was reluctant to order his patients home before they’re ready.
“The whole situation kinds of puts us in the good guy/bad guy chair,” Wood said.
Selig says that’s precisely the point: “It does make it tough on them; that’s part of being a leader.”
Wood now has decidedto get less generous with his clients, 80 percent of whom are Medicaid patients.
“You’re the QB. You pay for those extra days. That’s not really fair to me to let them stay,” Wood said. “I can’t be the pushover person to just let them get that extra day.”
So far, he hasn’t had to order nervous new parents out of the hospital, but he plans to educate his patients that, although Medicaid will pay for extra days, they don’t want patients who don’t medically need to stay in a hospital to linger.
Maternity care is one of the first “episodes” that will begin to be tracked on Oct. 1.
Northwest Arkansas, Pages 9 on 09/21/2012