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Medicaid Pay Increase Still Missing in Action in Most Places

By Rebecca Adams, CQ HealthBeat Associate Editor

May 28, 2013 -- The authors of the 2010 health care law were so worried about a potential shortage of primary care physicians that they included a sweetener, a pay raise that was supposed to start Jan. 1, designed to persuade providers to treat Medicaid patients. But most doctors are still waiting to see the money.

The law was designed to boost Medicaid payments in 2013 and 2014. With 2013 nearly half over, physicians' groups blame state and federal delays, as well as confusion among doctors, for the slow start.

If the goal was to convince physicians that Medicaid can be a simple and profitable business, the late takeoff may be having the opposite effect.

"It's disappointing, for sure, that Medicaid wasn't ready to go with this on Jan. 1," said Charles Cutler, a Pennsylvania internist who is chair of the board of regents of the Association of American Physicians.

The health care law (PL 111-148, PL 111-152) requires that in 2013 and 2014, primary care rates for physicians who treat Medicaid patients be the same as Medicare rates. In most states, Medicaid payments are significantly lower than those in Medicare, the federal program for the elderly and people with disabilities.

To implement the payment hike, state Medicaid officials must file a state plan amendment with the Centers for Medicare and Medicaid Services (CMS). CMS officials gave states until March 31 to send in their plans. Federal officials can take up to 90 days to review and approve the applications. After that, before doctors can get the higher reimbursements, they must submit forms attesting that they are eligible for the pay boost.

So far, federal reviewers have approved 17 state plan amendments, a CMS official said. The rest of the state reviews are supposed to be completed by the end of June.

In four states—Florida, Massachusetts, Michigan and Nevada—physicians have started getting higher payments, according to a coalition of seven physicians' associations that are trying to expedite implementation.

One state, Alaska, was allowed to keep its current Medicaid rates because they were already higher than Medicare reimbursements.
In some states, physicians may get the higher payments retroactively. But that's not true everywhere.

Each state can set its own deadline for physicians to send in their eligibility forms in order to qualify for retroactive raises. Those deadlines have passed in many states, and physicians there can only start getting the higher Medicaid reimbursements after they send in their eligibility forms.

In some other areas—including Delaware, Hawaii, Illinois, New Hampshire and New York—doctors could still get retroactive payments going back to January as long as they send in their forms by deadlines that will kick in this summer, according to the physicians' groups. For example, in Florida, physicians who fill out their forms by May 31 can still get back payments.

Physicians' groups say the cascade of delays began when federal officials waited until November 2012 to release a final rule explaining how the pay increase would work. Some of the details in that final regulation were different from the proposed rule. That led to confusion among state officials and doctors about how the increase would be implemented.

Officials in many states took months to sort through the requirements and send their plans to federal regulators.

One underlying question about the rate increase that some analysts have asked since it was first proposed is what would happen after it expires in 2014.

Now, physicians' groups are using the delays as further ammunition in their efforts to extend it beyond its sunset date. Such an extension would require congressional legislation, something that in this fiscal climate could prove difficult.

"Certainly, medical organizations will lobby for an extension or to make this permanent," said Cutler.

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