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Medicaid Reimbursement Rate Hike Proposed

Cheryl Clark, for HealthLeaders Media, May 10, 2012

Primary care providers, some subspecialist physicians, and nurse practitioners who treat Medicaid patients would be paid at Medicare rates–in some cases up to nearly three times the amount that Medicaid pays–under a proposed rule designed to stop doctors from refusing to treat the poor because of low reimbursement.

And since the cost of paying for Medicaid programs is now split about 50/50 between the federal government and the states that administer them, the proposal allocates about $11 billion for states to bridge that gap in 2013 and 2014.

"Absent the legislation, the projected increases in the reimbursement rates would be split between the federal government and states," the proposed rule says. State rates of Medicaid payment and coverage policies varies widely.

The policy is stipulated in the Affordable Care Act.

In a statement, Marilyn Tavenner, acting administrator for the Centers for Medicare & Medicaid Services, which developed the new rule, said it "will help encourage primary care physicians to continue and expand their efforts to provide checkups, preventive screenings, vaccines, and other care to Medicaid beneficiaries."

The new fee schedule will be an important tool "for states to ensure their primary care networks are prepared for increased enrollment as the healthcare law is implemented."

CMS said in the text of the rule, "We anticipate this proposed rule would increase physician participation in Medicaid as most states reimburse physicians at well below the Medicare rates. Recently, as states have experienced budgetary constraints, they have sought to address this by reducing payments to providers, including physicians."

"As we move towards CY 2014 and the expansion of Medicaid eligibility, it is critical that a sufficient number of primary care physicians participate in the program."

The rule, which also would cover increased payment for vaccinating children, was immediately hailed by physician and some hospital groups as long overdue and a necessary step to improve access, especially in underserved regions of the country.

"Low-income, working families have known for years that Medicaid failed to ensure access to a doctor when they needed medical care," Glen Stream, MD, president of the American Academy of Family Physicians, which represents 106,000 primary care physicians, said in a statement.

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