Nathan Moracco, assistant commissioner of the Minnesota Department of Human Services (DHS), wrote a letter to Mayo Clinic on April 14 questioning Mayo Clinic CEO Dr. John Noseworthy’s statement to employees about Medicaid patients, Medscape reported.
Last month, Noseworthy said to employees the health system will prioritize patients with private insurance over Medicaid if they seek care at the same time for similar conditions. After criticism, Noseworthy later said he regretted using the word "prioritized" in the internal discussion.
"I remain concerned that Mayo has yet to offer the community a strong, clear position on the equal treatment of patients on Medicaid," wrote Moracco in the April 14 letter.
Noseworthy's original internal comments came in response to a 3.7% increase in Medicaid patients and uncompensated care costs for Medicaid patients increasing by more than $200 million from 2012 to 2016. This Medicaid patient increase comes after Minnesota was one of 32 states that expanded its Medicaid eligibility.
The CEO later clarified his position with a statement posted on March 17, in which he said patient medical need remains the “primary factor in determining and setting an appointment” at Mayo Clinic. He added that about half of Mayo Clinic’s total services are provided to patients on government insurance.
That explanation didn’t satisfy Minnesota health officials, who asked the CEO to clarify his statement in the April 14 letter.
Noseworthy’s statement has raised the ire of health officials, but it also shines a light on the issue of balancing a patient population. Private insurers pay higher reimbursements than Medicaid. Expanding Medicaid means health systems and hospitals now care for more patients whose insurance doesn’t pay as much as private insurance.
More people are insured when a state expands Medicaid, but it also means hospitals get less revenue for caring for those patients. In the original March memo to Mayo Clinic employees, Noseworthy wrote, “If we don’t grow the commercially insured patients, we won’t have income at the end of the year to pay our staff, pay the pensions, and so on.”
Still, Mayo Clinic's revenues hit $11 billion last year, Axios reported in March. "Balancing payer mix is complex and isn't unique to Mayo Clinic," the system was quoted in Axios. "It affects much of the industry, but it's often not talked about. That's why we feel it is important to talk transparently about these complex issues with our staff."