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Medicaid Reimbursement Rate Hike Proposed

Cheryl Clark, for HealthLeaders Media, May 10, 2012

"As states struggled to balance their budgets, Medicaid payment for primary care services plummeted to as low as 36% of Medicare compensation," Stream said. "Such drastically low payments forced physicians to limit the number of Medicaid patients they could accept without putting their practices at serious financial risk. Using federal funds to bring Medicaid payment up to par with Medicare will temporarily ease the financial risk and, in turn, enable physicians to accept additional Medicaid patients."

"Payments to physicians who treat Medicaid patients are far too low and have not kept up with the cost of providing care," American Medical Association president Peter Carmel, MD, said in a statement. "The AMA supports appropriate Medicaid payments to all physicians to ensure patients have access to high quality care."

The proposed rule would apply to primary care physicians defined as those who specialize in family medicine, internal medicine, and pediatrics. It also applies to subspecialists in certain circumstances when they provide primary care.

In a fact sheet released Wednesday, CMS clarified that the rule "means higher payment would be made for primary care services rendered by practitioners—including, for example, nurse practitioners—working under the supervision of any qualifying physician and billing under that physician's Medicaid provider number."

Stream and others took the opportunity to remind policymakers that the Medicaid pay increase, as attractive as it seems, is not really a fix unless lawmakers repeal the sustainable growth rate formula or SGR, which would impose a 32% pay cut on physicians starting in 2013.

"Without a permanent solution to the flawed SGR formula on which Medicare payment is based, physicians still face a 32% Medicare pay cut in 2013 plus an additional 2 percent reduction mandated by last year's deficit reduction agreement," Stream said. Medicaid parity with a plummeting Medicare payment would fail to increase low-income Americans' access to health care, and the AAFP continues to call on Congress to address the SGR."

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