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HHS Issues Final Rule Boosting Medicaid Payments for Primary Care

By John Reichard, CQ HealthBeat Editor

November 1, 2012 -- With Medicaid set to expand dramatically 14 months from now, federal officials announced a final rule last week they hope will make doctors more willing to treat patients in that program because it increases Medicaid's payment rate for primary care doctors to that of Medicare's.

The payment increase is for primary care services delivered by a physician in family medicine, general internal medicine, or pediatric medicine. It also goes to "related sub specialists," according to a Centers for Medicare and Medicaid Services (CMS) summary, including pediatric cardiologists who are board certified in their specialty.

The rule also says the higher payments will be made for primary care services delivered by other medical professionals, such as nurse practitioners, working under the personal supervision of a qualifying physician.

There is a big catch though. These higher payments, to be made under a provision of the health law (PL 111-148, PL 111-152), only apply in calendar years 2013 and 2014. The provision is viewed skeptically by some doctors who say the fact that the increase is only temporary will prevent any appreciable increases in the number of physicians willing to treat Medicaid patients.

Republicans for their part have said the provision would be hard to eliminate because of physician lobbying, further driving up the cost of the health care law.

The rule says states "will receive 100 percent federal financial participation for the difference between the Medicaid State plan payment amount as of July 1, 2009 and the applicable Medicare rate."

In addition, CMS said the rule "provides multiple options for states to allow for flexible implementation in fee-for-service and managed care settings. The rule permits states to either lock rates at the level of the Medicare physician fee schedule in effect at the beginning of 2013 and 2014 or modify the rates in alignment with all updates by Medicare."

The rule will be published in the Federal Register Nov. 6.

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