What's delaying the primary care Medicaid payment boost?

Primary care physicians (PCPs) should soon see their Medicaid reimbursements rise to the level of those paid by Medicare -if they haven’t already. The fee parity, funding for which was included in the Affordable Care Act (ACA), became effective January 1, 2013, and is scheduled to last through the end of 2014.

Increases in Medicaid fees are expected to average approximately 73%, according to a study by the Kaiser Family Foundation Commission on Medicaid and the Uninsured.

To qualify for the funds, however, states were required to amend their Medicaid plans. The deadline for submitting the amended plans to the Centers for Medicare and Medicaid Services (CMS) was April 30. CMS then had until July 1 to review and approve the amended plans. As of the third week of June CMS had approved 43 amended state plans. PCPs in Florida, Massachusetts, Michigan, and Nevada, were said to be receiving the higher payments, according to the National Association of Medicaid Directors.

An additional wrinkle is that about 60% of Medicaid patients nationwide are now in some form of managed care setting, and the ACA specifies that the payment increases must go directly to the provider. “So each state has to figure out a methodology for how to distribute the money, to crosswalk their capitated payments to their Resource-based Relative Value and Relative Value Units and apportion them appropriately,” explains Stuart Cohen, MD, MPH, chairperson for the California chapter of the American Academy of Pediatrics.

Medicaid expansion coming

In 2011 about 62 million people-including 47 million low-income adults and children-were getting health insurance  through Medicaid, according to the Kaiser Family Foundation. The number of low-income persons covered by the program is expected to increase substantially next year, thanks to the higher income eligibility limits under the ACA. At the same time, however, slightly less than one-third of the nation’s doctors are accepting new Medicaid patients, creating a potential scenario in which millions of newly-insured people remain unable to get healthcare from a PCP.

To try and head off that problem, the ACA included about $12 billion to bring states’ Medicaid fees that were in effect as of July 1, 2009 up to the levels of Medicare fees during 2013 and 2014. “The thought was that as we increase the number of people insured by Medicaid, we want to make certain that there’s enough PCPs to take care of them,” says Jeffrey Cain, MD, FAAFP, president of the American Academy of Family Physicians. “It’s not enough to just give more people insurance. You have to make sure they have the ability to effectively use that insurance.”

The authors of the ACA limited the Medicaid fee increases to 2 years as a way of holding down the overall price tag of the legislation, explains Neil Kirschner, PhD, senior associate for health policy and regulatory affairs for the American College of Physicians. Kirschner predicts that physicians’ groups and many state governments will lobby Congress to extend the timeframe or even make the increases permanent.

“There are data showing that formerly uninsured people placed under Medicaid do better in terms of their healthcare benchmarks,” Kirschner says. “One of the reasons provider groups wanted to get things started quickly was so that states could collect data further demonstrating the benefits (of Medicaid coverage) that would make it worthwhile for the government to extend these higher payments.”

Although the Medicaid fee increases are expected to average 73% nationally, the actual increases will vary by state. (See table, “State-by state increases in Medicaid primary care rates,”) The Kaiser Commission survey also found that Medicaid fees average about 66% those of Medicare, again depending on the state. Medicaid physician fees in 2012 ranged from 58% of the national average in Rhode Island to 242% in Alaska, and were more than 10% below the national average in some of the most populous states, including California, New York, Florida, and New Jersey.

“The fear we have is that the politics of Washington sometimes get in the way of good healthcare,” says Cain. “So we want to make certain that the improved care that comes from this can go forward and not be hindered by politics.”

Who is eligible

Eligibility for the higher payments extends to PCPs working in fee-for-service as well as managed care settings, and includes:

• physicians who self-attest to being board-certified in the specialties of family medicine, general internal medicine, or pediatric medicine;

• subspecialists related to the specialties as recognized by the American Board of Medical Specialties, the American Osteopathic Association, or the American Board of Physician Specialties, and can also self-attest that they are board-certified (See sidebar, “Qualifying subspecialties”);

• physicians practicing family medicine, internal medicine, or pediatrics who self-attest that at least 60% of their Medicaid claims for the prior year were for the evaluation and management codes specified in the final regulation implementing the applicable section of the ACA. (See sidebar, “Eligible evaluation and management codes.”)

Midlevel providers such as physician assistants and nurse practitioners are also eligible to receive the higher payments, provided they are working under the direct supervision of a qualified physician. On the other hand, physicians working in Federally Qualified Health Centers and Rural Health Clinics are not eligible.

The methods and deadlines for self-attestation to qualify for the higher payments vary from state to state. In most cases the increases are retroactive to January 1 of this year. A useful state-by-state summary, with links to the relevant documents, is available on the Web site of the American Academy of Pediatrics at (www.aap.org/en-us/advocacy-and-policy/state-advocacy/Documents/State_Md_Payment_Increase.pdf). Information is also available through state medical societies and state Medicaid offices.

Will it work?

Because only a few states are receiving funding for the higher payments, it’s too soon to know if equalizing Medicaid and Medicare fees will persuade PCPs to treat more Medicaid patients. Richard Dupee, a geriatric internal medicine practitioner in Wellesley, Massachusetts, and governor of the state’s ACP chapter, says the response among his colleagues has broken down along generational lines.

“The senior physicians are not going to take any more Medicaid patients because the higher payments for a year or two are not worth it, and their practices are already full in any case,” he says. “And some of the newer docs coming in under the auspices of a hospital-owned practice are not taking them either, because that’s a decision made at the top from the beginning.”

But the reaction is different among the younger physicians he mentors. “They’re all very happy these rates will be increasing,” he says.

Cohen says he is hearing “a collective sigh of relief” from pediatricians regarding the higher fees. “A vast majority already accept Medicaid patients as a significant part of their practices, and are optimistic that they will be able to continue accepting new Medicaid patients,” he says.

At the same time, “many are skeptical until they actually see any payment increase, and many are wary that the managed care health plans receiving the added dollars will be less than transparent in distributing the money directly to providers, as was the intent of the ACA,” he adds.

The ACP’s Kirschner calls the effectiveness of the Medicaid bump an “open question, given how early in the process we are, but it’s certainly a step in the right direction, particularly given the historically low Medicaid payments in many states.”

Beyond the issue of money, some physicians don’t accept adult Medicaid patients due to concerns over time constraints-the fear that because of their socioeconomic status the patients will require more time and attention than the physician can afford to provide. However, the AAFP’s Cain thinks that need not be a concern.

“Almost all family doctors see Medicare patients, and elderly people tend to be similarly complex,” he says. “The hope is that by raising Medicaid to Medicare levels doctors can afford to take care of Medicaid patients in a way that can better manage chronic diseases. We know that if you can spend money in primary care instead of more expensive places like the emergency department you’ll have better outcomes and lower the cost to the whole system.”