HI Delegation Says Fed Healthcare Policy Hurts State

US Representative Ed Case

Hawaii’s Congressional delegation says proposed federal health care rules once again do not reflect the true cost of providing health care under the Medicare program and will drive further provider shortages, according to a release from the office of US Congressman Ed Case (D-Hawai‘i).

All four members have written a joint letter to the federal Centers for Medicare and Medicaid Services (CMS), which has proposed revisions to payment policies under the Medicare Physician Fee Schedule (MPFS).

“The proposed payment policy for physicians has long failed to account for the unique costs of providing medical services in Hawai‘i, and these new rules will worsen that gap,” said Case. “If allowed to stand, the policy will likely lead directly to an accelerating shortage of health care provides across our state, especially in rural areas like the Neighbor Islands and more vulnerable communities.”

Local doctors are concerned about how the policy will affect what’s already a significant physician shortage in the state.

“While Hawai‘i is one of the country’s most expensive places to work and do business, this is not reflected in Medicare payments to physicians, which are in the bottom half nationally,” said Dr. John Lauris Wade, of the Hawai‘i Radiological Society, who practices on Hawai’i Island. “These low reimbursements and the high cost of living overall have made it increasingly difficult to attract, recruit and retain new physicians. About 700 doctors statewide will soon retire, and as such, physician shortages on the Neighbor Islands will soon exceed 50%.”

Every three years, CMS proposes a physician fee schedule after reviewing and adjusting the Geographic Practice Cost Indices (GPCI). The GPCI reflects the variations in the costs of furnishing various medical services across the country, which accounts for the relative cost of work, practice expenses and malpractice insurance costs in an area compared to the national average cost.

But the Hawai‘i delegation, in its letter, said that since relative costs cannot be standardized by a simple formula, adjustments have been made to account for real-world costs that cannot be captured in the standard formula for calculating GPCIs. The delegation said the CMS should make an exception for Hawai‘i, similar to exceptions that have been made for Alaska and other geography isolated states like Montana, Wyoming, Nevada and the Dakotas.

“As an island state, Hawai‘i’s unique geography makes it inherently difficult to provide health care services uniformly across the islands,” said Case.

“This unique geography includes large rural areas, communities with sparse populations and higher costs due to the lower volume of patients served,” he continued. “These challenges make it not only difficult to provide access to services but also increase healthcare costs. In short, the current GPCI formula just doesn’t fit Hawai‘i’s circumstances and should be changed to one that fairly captures and accounts for them.”

The proposed CMS rules were released in July and are currently set to become effective on January 1, 2020. The Hawai‘i delegation’s letter can be read in full by clicking the link below.

Delegation Letter