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Primary Care Doctors Who Treat Medicaid Patients Get a Two-Year Boost

By Jane Norman, CQ HealthBeat Associate Editor

May 9, 2012 -- Primary care physicians will receive reimbursements for Medicaid equal to what Medicare pays in a two-year "fix" mandated by the health care law, Health and Human Services officials said last week.

The increase will apply to Medicaid services provided in calendar years 2013 and 2014, and will go to family practice physicians, pediatricians and other practitioners of family medicine, as well as some primary care sub-specialties such as neonatologists.

This could be a significant increase for many doctors. States set Medicaid provider reimbursement rates, and primary care practitioners currently are paid 66 percent of the Medicare rate on average, though the percentages vary from state to state, Centers for Medicare and Medicaid Services (CMS) officials told reporters in a conference call.

Cindy Mann, deputy administrator at CMS, said that the $11 billion, two-year boost in reimbursements will be entirely paid for by the federal government rather than the state-federal sharing that generally is the practice for Medicaid. One of the key goals of the health care law (PL 111-148, PL 111-152) is to emphasize primary care, and the increased payments are an example of that, even if they will only last two years, Mann said.

The reimbursement increase was included in a proposed rule recently published by CMS.

Roland Goertz, board chairman of the American Academy of Family Physicians, who was on the call with Mann, said that family doctors know that people who don't have access to care put off health needs, and then a simple problem can become complicated. Two-thirds of the members of his academy continue to accept Medicaid patients even though the payment rates are low, he said. "We can't continue to depend on the good will of physicians who continue to provide care for less than the cost of that care," Goertz said.

Asked if doctors will seek to extend the temporary pay increase just as they have tried to avert scheduled reimbursement cutbacks under the Sustainable Growth Rate, Mann said that officials will be reviewing the results of the two-year change and whether the pay boost has provided a clear improvement in health care.

Said Goertz: "We're ready to lobby for what's right for improving the system."

Overall, the pay increase is projected to cost the government $5.7 billion in calendar year 2013 and $5.9 billion in 2014, CMS says. Unless Congress provides additional money, the higher rates for primary care providers would end after 2014. Individual states could, however, choose to maintain the higher reimbursements.

Sen. Orrin G. Hatch of Utah, ranking Republican on the Senate Finance Committee, criticized the rule in a statement last week.

"It's nonsensical to think a temporary, two-year bump in pay will actually attract and retain doctors to the Medicaid program unless the White House thinks Congress will keep extending these higher payment rates in perpetuity," Hatch said. "Every year, Congress has to stop Medicare physician payment rate cuts and this proposed regulation will now create the same dilemma under the Medicaid program. When that rate drops back down after 2014, what will happen to the health care Medicaid beneficiaries receive? Or is this just another budget gimmick to hide the true cost of the President's $2.6 trillion health law?"

As the nation moves toward full implementation of the health care law in 2014 and the expansion of eligibility for Medicaid to all adults under 133 percent of the federal poverty level, "it is critical that a sufficient number of primary care physicians participate in the program," the rule says.

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