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Reform Update: Docs receiving enhanced Medicaid managed-care pay in just six states, AAFP says

By Andis Robeznieks
Posted: August 26, 2013 - 4:15 pm ET

The American Academy of Family Physicians reports that there are only six states at this point where primary-care physicians are receiving enhanced Medicaid managed-care payments under the healthcare reform law to bring them up to Medicare payment levels.

The Medicaid payment parity provision of the Patient Protection and Affordable Care Act was designed to promote access to primary care for new Medicaid beneficiaries under the law's expansion of coverage to adults earning up to 138% of the federal poverty level. The pay increase is temporary and covers 2013 and 2014. Though reimbursement varies by state and DRG code, Medicare pays roughly 20% more than Medicaid.

But while the CMS has approved fee-for-service pay-increase plans for every state except California, state medical associations report that a growing number of Medicaid beneficiaries are being cared for under a managed-care plan rather than fee for service. While the AAFP reports that 33 states have had their managed-care pay increases approved by the CMS, that's not the end of the process. States then have to negotiate new prices with managed-care companies.

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The CMS recently approved the state of Minnesota's plan for implementing the fee boost for primary-care physicians serving Medicaid patients. But in Minnesota, where most Medicaid services are delivered through managed care, most physicians are not yet receiving the higher pay. Minnesota doctors have some of the highest Medicaid patient-acceptance rates in the nation.

The CMS still has to approve Minnesota's managed-care payment methodology. Then, after that occurs, the state has to negotiate implementation of the pay increase with managed-care companies. Although movement is slow, physicians are being promised retroactive payments back to Jan. 1.

Janet Silversmith, MMA director of health policy, said doctors are frustrated with the delay. “The impact will be most significant when the managed-care increase happens,” she said.

Meanwhile, the Texas Medical Association reports that Texas also is still seeking CMS approval for its managed-care pay increase plan. As in Minnesota, most Texas Medicaid patients receive their care through managed-care plans.

In addition, while Texas received approval for its enhanced fee-for-service program in May, doctors have yet to receive any retroactive enhanced payments.

“What we're hearing is, 'We're working on it, we're working on it, we're working on it,' ” said Darren Whitehurst, vice president of advocacy for the Texas Medical Association.

“We've had Medicaid managed care since the '90s, so it seems like it would be a pretty simple thing to do,” Whitehurst said. “Somewhere there's been a snafu. It's not the doctors' fault. They've been doing everything they're supposed to be doing.”

The Medical Association of Georgia reports that retroactive payments to doctors in its state won't start until November.

Many observers say the CMS staff is overwhelmed by the huge volume of work required to implement the healthcare reform law, particularly since about half the states declined to set up their own health insurance exchanges scheduled to launch Oct. 1 and the CMS has had to take on that job.

The numbers game

There are many moving parts to healthcare reform—not the least of which is accounting, according to Oregon Gov. John Kitzhaber, a former emergency medicine physician, ranked by Modern Healthcare readers and editors as the second most influential person in healthcare. He says his state's healthcare organizations need to move away from accounting models based on revenue growth.

Kitzhaber, who this year was named by Modern Healthcare/Modern Physician readers and editors as the Most Influential Physician Executive in Healthcare, is overseeing an overhaul of the state's Medicaid program, which aims to save the state $11 billion over 10 years.

When the process started, Kitzhaber promised to keep people up to date by issuing quarterly progress reports. The second one was released this month (PDF) and it showed that the state was still working to establish financial benchmarks from which to measure improvement.

Kitzhaber said the problems include an accounting system that is based on constant growth and reporting short-term highlights. “We've discovered that, on the financial side, the metrics we used in the old delivery model are not designed for reduced utilization,” Kitzhaber said. “When you look through a one-fiscal-year lens, it's hard to see progress.”

He doesn't see it as an insurmountable problem. “We need to evolve our accounting system so it makes sense,” Kitzhaber explained. “Accountants in big hospitals, they're looking at a model predicated on a certain amount of growth every year. It's very interesting to watch the old accounting model deal with the new reality.”

A sneak preview

Hospitals can get a preview of data on eight hospital-acquired conditions the CMS will be posting next month on Hospital-specific reports at are based on CMS fee-for-service claims from July 1, 2010 through June 30, 2012.

The American Hospital Association noted that the CMS will not be posting these measures on its Hospital Compare website or using them in its hospital-acquired condition payment penalty program. But they could be used by the Leapfrog Group or other organizations that publicly report patient-safety data.

Use of readmission rates questioned

While hospital readmission rates are being used as one of the levers moving the nation's healthcare system from one that rewards value instead of volume, a new study in the journal Pediatrics found that readmission rates for children may not be a useful quality measure.

Using a multistate database, researchers at the University of California San Francisco looked at the readmission rates between 30 and 60 days of discharge at 958 hospitals for patients one to 20 years old for asthma, dehydration, pneumonia, appendicitis, skin infections, mood disorders, and epilepsy. All had readmission rates of around 5% except for most of the conditions except for dehydration, which averaged 6%; epilepsy, 6.1% and mood disorders, 7.6%.

“As a national way of assessing and tracking hospital quality, pediatric readmissions and revisits, at least for specific diagnoses, are not useful to families trying to find a good hospital, nor to the hospitals trying to improve their pediatric care,” Dr. Naomi Bardach, assistant professor of pediatrics at UCSF Benioff Children's Hospital and the study's lead author, said in an e-mailed news release. “Measuring and reporting them publicly would waste limited hospital and healthcare resources.”

Follow Andis Robeznieks on Twitter: @MHARobeznieks

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