States need more time to roll out Medicaid payment rate increases for primary care

The 2-year bump up in rates for Medicaid primary care providers under the health care reform law has run into numerous problems. The Patient Protection and Affordable Care Act (ACA) was supposed to increase the rates for primary care physicians in 2013 and 2014 to Medicare levels. That could be significant in some cases. A 2012 survey found that for a representative sample of primary care services, the Medicaid payment averaged only 58% of that for Medicare. However, the difference varies greatly. In some cases, Medicaid rates are already higher than Medicare rates.

The increase, meant to ensure there are enough primary care providers accepting Medicaid patients as the reform law rolls out, raises payments for some evaluation and management services and some vaccine administration services.

Actually making that happen has turned out to be so complicated that the funds, which were supposed to cover 2013 and 2014, were still not flowing in most instances at midyear. As of the end of July, nearly all state plans had been approved by the Centers for Medicare and Medicaid Services (CMS), but very few states had actually rolled out the program, according to Matt Salo, executive director of the National Association of Medicaid Directors (NAMD).

A big exception to the CMS approval of plans was California. A CMS spokesperson said the details of that state’s plan were still being negotiated with CMS.

Salo said it’s expected that states will have the program in place by September. Both CMS and Salo say the payments will be retroactive to January of this year.

Many of the problems with the rollout were related to the fact that most primary care provided under Medicaid is now under some type of managed care, and it was not readily apparent how to match those payments to Medicare payments, Salo said.

Even bigger questions are being raised about whether the 2-year increase will actually expand access to care under Medicaid and whether the program will be extended at the end of next year. Congress limited the increase to 2 years under the health care reform bill to hold down the legislation’s costs, Salo said, but that action held out the question of whether a future Congress would extend the increase.

At 17 months out, it’s not known whether either Congress or the states will extend the higher rates. Currently the federal government pays the full cost.

The Medicaid and CHIP (Child Health Insurance Program) Payment and Access Commission (MACPAC), which advises Congress on the programs, has noted that several states say that they are unlikely to continue the increase and they fear the drop back in 2015 may actually hurt efforts to recruit physicians to Medicaid.

The commission says that more information should be available when the program gets into day-to-day operation. However, after interviews with Medicaid officials in 6 states (Alabama, California, Indiana, Massachusetts, Oregon, and Rhode Island) and the District of Columbia, MACPAC points out that claims data that might indicate if the higher rates have succeeded in expanding access may not be ready until well after the end of next year.

MACPAC also says, “Some states interviewed indicated that the effect of the provision on access to care may be limited because the statute excludes independently practicing nonphysician practitioners. Some states rely on these providers, particularly in underserved and rural areas.”

The commission says it will continue to monitor the implementation of the provision. In the meantime, eligible physicians should get the required “attestation” done to ensure they get the increase, Salo said.

The MACPAC explanation of the program, in addition to other issues, is detailed in its June report to Congress at www.macpac.gov/reports.

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