Medicaid pay cut looms for primary-care docs

Most physicians expect Congress will once again deliver an 11th-hour legislative “patch” around March 31 to override a 21% Medicare pay cut under the sustainable growth-rate formula. No such heroics are expected to block a 42.8% Medicaid pay cut that primary-care physicians face Jan. 1.

That's the average cut in Medicaid fees calculated by a new Urban Institute report (PDF), which also estimated that—as of June—the two-year “fee bump” included in the Patient Protection and Affordable Care Act increased federal government spending on Medicaid primary-care services by $5.6 billion. The extra pay coincided with efforts to increase Medicaid enrollment, which the report said has grown by 7.5 million people since the third quarter of 2013.

In an effort to ensure that new Medicaid enrollees had access to a doctor, the ACA raised Medicaid fees for primary-care services to match Medicare reimbursement levels for 2013 and 2014. That provision expires Dec. 31, and a bill to extend those parity payments has received little attention.

Also, while the ACA called for the parity provision to be effective as of Jan. 1, 2013, the CMS didn't release its final rule on implementation until November 2012, so states were not ready to make payments until several months later and most parity payments for 2013 were made retroactively.

The Urban Institute said it is unclear how much impact the provision has had on increasing healthcare access for Medicaid enrollees, though it cites one study that found “significant new provider participation in Medicaid due to the increase” in Connecticut. Similarly, an Ohio State Medical Association survey found that 40% of physicians reported seeing more Medicaid patients as a result of the pay parity provision, but an equal number said they would discontinue seeing them if the provision expired.

As of Oct. 28, 15 states had indicated they would extend the parity payments with their own money, while 24 states said they would not, according to the Urban Institute report. Primary-care doctors in the seven most-populous states face Medicaid fee cuts of 40% or more, according to the report, and these cuts would occur at the same time that “significant expansion” of Medicaid enrollment takes place in California, Illinois, New York and Ohio.

Rhode Island primary-care physicians face the largest decrease: 67.3%. They are followed by California, 58.8%; New York, 55.3%; New Jersey, 52.9%; Florida, 52.5%; Pennsylvania, 52.4%; and Illinois, 49.7%.

In response to its failures to extend parity payments and repeal the SGR, Dr. David Fleming, American College of Physicians president, issued a statement that said, “Historians are likely to label the 113th Congress as perhaps the least productive ever.”

“It has compiled an unprecedented record of failing to address the key challenges facing our country,” Fleming said. “Regrettably, improving healthcare will be among the many issues where Congress has failed to act.” Next year, the organization will inform members of the new Congress about the “devastating impact” allowing parity payments to end will have on access to care for Medicaid patients, Fleming said.

The American Academy of Family Physicians issued a similarly dire warning.

“Medicaid's sudden return to disparate and inadequate payment for primary-care services will again shut out people who have come to know and depend on their primary-care physicians,” AAFP President Dr. Robert Wergin said in a statement .

Follow Andis Robeznieks on Twitter: @MHARobeznieks