Reform Update: States make progress in Medicaid parity payments

States are making progress carrying out a provision of the healthcare reform law that calls for increasing Medicaid primary-care payments for 2013 and 2014 to match what Medicare pays.

Anecdotal evidence has suggested that few physicians were getting the promised pay bump (though payments for 2013 will be made retroactively to Jan. 1).

Because the Patient Protection and Affordable Care Act relies on states to carry out the provision, it has been difficult to discern how far behind they were. States also argued that, if they were behind, it was at least partially the fault of the CMS, which didn't issue its final rule on Medicaid parity until last November.

According to a new survey by the American Academy of Family Physicians, the parity provision is fully in place in 33 states.

Eight have implemented fee-for-service payment, but haven't done so for Medicaid managed care. Those states are Florida, Georgia, Louisiana, Michigan, Minnesota, New Mexico, New York and Washington.

Another six states still are not making parity payments of any kind: California, Kentucky, Nebraska, New Jersey, Texas and Wisconsin.

Also, the AAFP points out that Alaska “is not participating” in the program, and that North Dakota primary-care docs will experience only a “nominal increase.” Tennessee doesn't have a Medicaid fee-for-service program, only managed care.

At least in Wisconsin, however, payments are on their way, said Chris Rasch, director of state and federal relations for the Wisconsin Medical Society.

Rasch said the Wisconsin Department of Health Services started this week to process the 800,000 Medicaid claims filed this year by the state's 5,100 physicians who self-attested as primary-care providers before Oct. 31. He added that payments should start coming sometime this month. Physicians can still self-attest to their status as a primary-care provider, but their payments won't begin until next year.

But problems persist even in states where the parity payments have been implemented. The Ohio Academy of Family Physicians reported that July payments were short due to new codes used by the Ohio Department of Medicaid, which was working to automate payment adjustments.

The AAFP, which has called upon Congress to make the parity provision permanent, noted that states will receive an estimated $5.8 billion in 2013 and $6.1 billion in 2014 to pay for the increased reimbursement.

The American Medical Association says moves by UnitedHealthcare and other insurance companies to drop physicians from Medicare Advantage networks may impede the Obama administration's goals for healthcare reform.

“The timing of the network modifications, the lack of accurate and reliable information, and lack of network transparency has significant negative ramifications for the administration's goal of reducing fragmentation of patient care,” the AMA wrote in a letter to the CMS (PDF) signed by 80 other physician organizations. “Indeed, there is widespread evidence that the proposed modification will disrupt long-established patient-physician relationships, interfere with existing physician referral networks, and undermine emergency department coverage in many hospitals.”

The AMA and the other organizations are calling for the CMS to require that health plans document that patients were accurately informed of their physician's status in the network; that patients are informed that they can retain the services of their preferred doctor through other coverage options; and that terminations initiated just before and during open enrollment “be held in abeyance” for 2014.

Last week, Connecticut Attorney General George Jepsen urged the CMS to “aggressively scrutinize” the terminations.

According to the AMA, these types of terminations have occurred in 11 states: Arkansas, Connecticut, Florida, Indiana, Nebraska, New Jersey, New York, Ohio, Rhode Island, Texas and Utah.

Payment policies can effectively discourage care that is “unneeded or ill-advised,” according to a Catalyst for Payment Reform (PDF) look at an initiative targeting early elective deliveries.

Catalyst researchers studied how the South Carolina Birth Outcomes Initiative used education, collaboration and payment reforms to reduce “unwarranted” early elective births by 50%, reduced neonatal intensive-care admissions and saved the state more than $6 million in the first quarter of 2013.

Among the initiative's components was a policy of the South Carolina Department of Health and Human Services and Blue Cross and Blue Shield of South Carolina to stop paying for elective deliveries—by either inducement or cesarean deliveries—earlier than 39 weeks into a pregnancy. Medicaid and the state Blues plan, according to the report, pay for 85% of the state's births.

Follow Andis Robeznieks on Twitter: @MHARobeznieks