For the first time in 14 years, physicians that accept Medicaid in Indiana will receive rate increases and bonuses from the state.

According to one southern Indiana doctor, this could mean better flexibility for both the 800,000 Hoosiers that receive Medicaid and the doctors that treat them.

“There is no question [the Medicaid increases] will open more doors for patients and physicians,” said Dr. Bahram Sepehri, a pediatric cardiologist in New Albany since 1980

On Jan. 1, fixed levels of Medicaid reimbursement to primary care physicians climbed by 25 percent, or $32 million annually. The increase also covers specialists performing preventive care, including certain evaluation and management procedures, according to the Family and Social Services Administration.

Close to 5,000 doctors statewide will also receive bonus payments based on the fiscal years of 2007 and 2008. Dr. Jeff Wells, director of Medicaid in Indiana, expects that number to top $39 million, or an average of around $5,600 for each physician.

These increases should have an effect locally, Sepehri said.

Already, all pediatricians in the area, except one, accept Medicaid, he said. But for years doctors have limited the number of Medicaid patients they treat in order to control costs.

Dr. Joseph Bruckman, medical director at Floyd Memorial Hospital, said the rate freeze has hurt both patients and physicians.

“Some physicians have refused to treat patients at the rates the government pays,” Bruckman said. “It costs physicians more to see some patients than they get paid for it.”

The jump in payouts should ease restrictions some doctors have implemented since rates were last increased in 1994, Sepehri said.

For example, doctors’ offices could add additional physicians as a result, he said.

But despite the “long overdue” increases, Medicaid payouts still have room to improve, Mary Lynn Bundy, a pediatrician in southern Indiana since 1989, said.

“They pay less than every other private insurance company and Medicare by a significant amount,” she said. “I run into difficulties referring patients because the Medicaid has made it financially unfeasible for many doctors to treat them.”

Bundy has not officially received word from the FSSA about the new rates. But Wells said he and other state officials are trying to get the word out.

“One of our expectations and hopes is to see more physicians participate in Medicaid,” Wells said. “Right now we’re trying to let physicians and patients know about it through different channels.”

Wells said the initiatives were the result of “bipartisan support” in the Indiana legislature last session to “focus on improving health care in the state.”

“Physicians in Indiana had been under reimbursed for years,” Wells said. “We've lagged behind peer states in terms of our Medicaid payments.”

Wells said the legislation aims to allow physicians to spend more time with their patients, as well as make it easier for patients to get an appointment with the doctor of their choice.

“Ultimately, we hope this step improves the health and quality of life in Indiana,” Wells said.

But Sepehri said that Indiana’s reputation has, in some measure, been undeserved.

“Indiana is a lot better than Kentucky and some other states in Medicaid,” he said. “In Kentucky, you’d have a more difficult time finding a doctor. ... And for the most part, we’ve been satisfied with the way we've been reimbursed [in Indiana].”

But Bundy feels there should be more improvements to come. A common obstacle for her practice is the incompatibility between Indiana and Kentucky’s Medicaid systems.

“Sometimes I have to refer Medicaid patients to Riley Hospital [in Indianapolis] and that’s two hours away,” Bundy said. “It would be much better to obtain services locally, like over at Kosair [Children’s Hospital]. That’s only 15 minutes from here.”

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