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Increased Payments Aim to Attract Physicians to Medicaid

June 29, 2012:

Wendy Gabbert, CPC, CPC-H, Clinical/Technical Editor

Primary care physicians will see their Medicaid reimbursement rise to meet Medicare levels in calendar years 2013 and 2014 if a proposed rule announced in May becomes final. The federal government is planning to boost rates to encourage more primary care physicians to accept Medicaid patients so that Medicaid will be able to handle the projected influx of millions of enrollees by 2014 under the Affordable Care Act of 2010.

According to the proposed rule, announced by the Department of Health and Human Services May 9, 2012, states would receive $11 billion in extra federal funds in 2013 and 2014 to beef up payments for primary care under Medicaid. No matching state funds would be required. Primary care would include family, general internal, and pediatric medicine, and related subspecialties.

In most states, Medicaid payments are significantly lower than payments under Medicare, leading some physicians to turn Medicaid patients away. As of 2008, average Medicaid payments nationwide were only 72 percent of average Medicare payments, and payments for primary care were even lower—66 percent of those under Medicare.

A study by the Harvard School of Public Health estimates that an additional 13.4 million Americans will enroll in Medicaid by 2014, when the ACA goes fully into effect. The margin of error is sizeable, however; depending on incentives, additional enrollment could be as low as 8 million or as high as 22.4 million.

The Harvard study projects that the jump in enrollment will require an additional 4,500 to 12,100 more primary care physicians to provide preventive care such as check-ups, screenings, and vaccines. Ensuring access to preventive care will be key to keeping costs down over the long-term.

Currently, no plan to keep Medicaid rates elevated after 2014 has been introduced.


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