Healthcare Business News
Medicaid physician pay boost stalled

Medicaid physician pay boost stalled

By Rich Daly
Posted: February 26, 2013 - 2:45 pm ET

No states appear to have implemented a temporary Medicaid physician pay boost more than eight weeks after it was supposed to have gone into effect, according to provider groups tracking the issue.

The highly anticipated move boosting 2013-14 pay for Medicaid primary-care services provided by physicians to Medicare payment levels was required to go into effect Jan. 1, according to provisions of the Patient Protection and Affordable Care Act. But delayed federal rules implementing the pay hike have pushed back the logistical process that will provide the funds to those physicians.

“It's going very, very slow but states are not doing the things they need to do,” said Neil Kirschner, a senior associate for the American College of Physicians.

Advertisement | View Media Kit


Since the final federal rules implementing the boost were issued in November, provider advocates have been urging states to complete the process by submitting state plan amendments to the CMS for approval. States have until the end of March to do so, but it remains unclear how many have taken that step.

The CMS also appears responsible for some of the delays since “a number of states” have submitted the required plan amendments, according to a written CMS statement. A CMS spokesman, who was asked for details on the implementation, issued the written statement that did not address whether any were approved or when the CMS was expected to approve any plans.

The CMS has 90 days to approve the plans from the date they are submitted, and the pay increases are retroactive to Jan. 1.

The boost in Medicaid primary-care rates, which generally average two-thirds of Medicare pay, was supposed to provide some financial incentive for physicians to take on additional or first-time Medicaid patients. The expected effect of the increase varies by specialty with significant effects on some types of physicians. For instance, at least one study found the increase could add up to $80,000 to the annual incomes of participating pediatricians, who earn about $150,000 on average, according to the American Academy of Pediatrics.

Expanding the number of Medicaid physicians was particularly important, according to Medicaid advocates, with an estimated 10 million new beneficiaries expected to join the program's rolls next year. But the payment delays could affect the drive to add more providers.

“It's a very, very open question whether this is going to affect providers going in,” said Matt Salo, executive director of the National Association of Medicaid Directors.

The expected increase also comes as the gap between Medicare and Medicaid physician pay has widened in recent years due to provider cuts and freezes enacted by many states looking to offset recession-related drops in tax revenue, according to recent research by the Urban Institute. Particularly sharp drops occurred in 10 states, which reduced their primary-care Medicaid-to-Medicare fee ratios by more than 5 percentage points between 2010 and 2012, according to research by Stephen Zuckerman, a senior fellow at the Urban Institute, and his colleagues.

The biggest gap in pay rates occurred in Arizona, which saw the difference between Medicare and Medicaid primary-care pay rates increase by 11 percentage points in those years.

But Dr. Marc Leib, chief medical officer for the Arizona Health Care Cost Containment System, said in a written statement that his agency was working with the CMS to close that gap. “In the end, all providers entitled to the increased primary-care fees will be paid at those new rates,” he said.

What do you think?

Share your opinion. Send a letter to the Editor or Post a comment below.

Post a comment

Loading Comments Loading comments...



Switch to the new Modern Healthcare Daily News app

For the best experience of on your iPad, switch to the new Modern Healthcare app — it's optimized for your device but there is no need to download.