The new year will bring unwelcome tidings to doctors who treat Medicaid patients—steep payment cuts.
Before adjourning, Congress did not extend Medicaid rate increases for primary-care services to bring those rates to parity with Medicare rates, a bump mandated by the Patient Protection and Affordable Care Act. That temporary two-year hike, delayed in many states by bureaucratic snafus, resulted in $5.6 billion in additional payments through June.
The higher rates were intended to entice more doctors to serve the expanded pool of Medicaid beneficiaries under the healthcare reform law. Previously, Medicaid primary-care rates were shown to be on average 58% of Medicare rates. Studies have found that Medicaid beneficiaries disproportionately live in areas with a shortage of primary-care doctors.
The average Medicaid payment reduction in 2015 will be 42.8%, according to an Urban Institute analysis. But doctors in states including California, Florida and New York will see cuts of more than 50%.
Some states are stepping in to pick up the slack. At least 15 states have indicated they will cover some of the cost to maintain the Medicare-parity rates, according to the Kaiser Family Foundation. But the pay bump will go away in at least two dozen other states.
Stephen Zuckerman, a senior fellow at the Urban Institute, said states with higher payment rates traditionally have gotten more doctors to treat Medicaid beneficiaries. But it's unclear whether the ACA payment increases had a similar effect. While data are not yet available to evaluate the effectiveness of the pay hikes, “Some of the early evidence, at least anecdotally, is positive,” he said.
