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.
"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."
"An abrupt end to Medicaid-Medicare parity will wipe out the progress of ensuring that low-income Americans have access to primary medical care. A sudden return to grossly inadequate compensation for Medicaid patients' care would threaten to once again close the door on people who have come to know and depend on their primary care physicians."
Molly Weedn, spokeswoman for the California Medical Association, said the rule will encourage more students to enter medical school and choose primary care. "We've endured cut after cut in recent years, and now HHS understands the value that primary care physicians have. And if there's more opportunities for more doctors to treat more patients, that's great because there's a serious workforce shortage across the country, especially in California, and especially in rural areas," she says.
Some hospitals weighed in with positive comments as well, including the Children's Hospital Association, which represents about 220 children's hospitals in the country.
"By including pediatric specialists in the proposed rule, the Administration recognizes that most pediatric specialties are in short supply and facing serious workforce issues," Mark Wietecha, president and CEO of the CHA said in a statement. "A boost in payment level to a Medicare floor will help pediatric physicians to continue to treat children enrolled in Medicaid."
Wietecha said that on average, Medicaid reimburses pediatric providers 30% below Medicare rates for comparable services. "General pediatricians and pediatric specialists provide nearly 60% of all office visits paid for by Medicaid on behalf of people ages 0-21. Additionally, a higher proportion of children with Medicaid have chronic illnesses requiring pediatric specialty services than do non-Medicaid patients."