AAFP, Other Groups Urge Congress to Equalize Medicaid, Medicare Payment Rates

The AAFP has joined more than 100 other organizations in calling on lawmakers to equalize Medicaid and Medicare payment rates as part of any comprehensive health care reform bill passed by Congress.

Both the House and Senate health care reform bills would expand Medicaid coverage to more low-income individuals. Only the House bill, however, includes a $57 billion provision that would adjust Medicaid payments for primary care to at least 100 percent of Medicare rates.

In a letter to House and Senate leaders, the AAFP and 117 other physician, patient and labor organizations urged Congress to "ensure meaningful access to care under the proposed Medicaid expansion by adopting the House provision to bring Medicaid reimbursement rates for primary care in line with comparable Medicare rates within four years."

"While we strongly support expanding Medicaid to extend health coverage to low income individuals, we are very concerned that failure to address reimbursement disparities will weaken an already fragile network of Medicaid providers at a time when the demand for their services will be growing," says the letter, signed by the AAFP, the American College of Physicians, the American Osteopathic Association and the American Academy of Pediatrics, among others.

The letter points out that Medicaid rates average just 66 percent of Medicare rates for primary care services and are "woefully inadequate to cover the cost of providing care."

"According to the Congressional Budget Office, the planned expansion will increase enrollment in Medicaid and the Children's Health Insurance Program by as many as 15 million beneficiaries," says the letter, which was sent to Senate Majority Leader Harry Reid, D-Nev., House Speaker Nancy Pelosi, D-Calif., and other congressional leaders who head key committees with a direct impact on health care legislation. But the "inadequacy of Medicaid reimbursement levels must be addressed in conjunction with Medicaid expansion, or we risk leaving our poorest and most medically vulnerable residents behind, despite the remarkable promise offered by health reform," the letter states.

AAFP President Lori Heim, M.D., of Vass, N.C., made a similar point in an interview with AAFP News Now, saying, "If Medicaid rates are not brought up to Medicare rates, we run the very real risk of having patients who have insurance but not physicians who can financially afford to accept them."

An equalization of Medicaid and Medicare payment rates for primary care also would affect physician workforce issues, Heim said. "One of the reasons why more (students) have not gone into primary care and family medicine is a concern about whether they can survive within the current economic structure," she noted. "Poor Medicaid rates have been a part of that."