Medicaid pay increases set to continue next year in 6 states and D.C.

August 1, 2014

Six states have announced they will continue pay increases to primary care physicians that took place under the Medicaid expansion, but physicians are reporting the increases have done little to boost their incomes or acceptance of Medicaid patients.

Six states have announced they will continue pay increases to primary care physicians that took place under the Medicaid expansion, but physicians are reporting the increases have done little to boost their incomes or acceptance of Medicaid patients.

Only six states and the District of Columbia will continue the Medicaid pay raise for primary care physicians through 2015. Those states include Alabama, Mississippi, Colorado, New Mexico, Iowa and Maryland.

The remaining states will let Medicaid pay rates revert back to 2012 levels when the federally backed raise expires at the end of the year, according to Kaiser Health News. The raises equated to an average 73% pay increase nationally, according to a 2012 study by Kaiser and the Urban Institute.

There is still a chance that Congress will extend federal funding for the pay increase, but it is unlikely. According to the Congressional Budget Office, the pay raise was expected to cost the federal government $11 billion in the two-year period.

Under the rules of the Medicaid expansion, a key provision in the Affordable Care Act (ACA), states are required by law to reimburse providers at the same rate that would be paid under Medicare. The federal government agreed to pay the full cost of coverage for newly eligible individuals through 2016, then 90% through 2020.

The program was aimed at ensuring there were enough primary care physicians willing to accept a larger Medicaid population created by reforms under the ACA.

But physician surveys suggest the effort to boost Medicaid has not achieved what was promised. According to the American Academy of Family Physicians, 51% of its membership recently surveyed reported that the Medicaid pay increases had no impact on their practices. One-third of respondents noted an increase in appointment requests from Medicaid patients, but only 11% say they increased their acceptance of Medicaid patients after not previously accepting them.

Nationwide, about 69% of physicians accept Medicaid patients, according to the 2012 study published in Health Affairs.

There is no data as to whether the pay increases have accomplished the goal of increasing the number of PCPs-specifically the number of them willing to accept Medicaid patients-since neither federal or state governments have collected data or studied the impact of the program.

According to a report released by the White House in July, in addition to improving health coverage for its residents, states that participated in the program were also eligible to receive additional financial support from the federal government. A total of 26 states participated in the expansion program and, by doing so, increased the number of people eligible for Medicaid or the Children’s Health Insurance Program (CHIP) by 5.2 million. States that took part in the expansion program will receive $84 billion over the same period, according to the White House report.

The 24 states that rejected the expansions will deprive 5.7 million people of health coverage in 2016 and lose another $88 billion in federal funding.

A study by the Urban Institute cited by the White House reveals that if all states expanded Medicaid, reductions in uncompensated care now financed by the states would more than offset Medicaid costs and generate $10 billion in savings over the next decade.