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Friday May 11, 2012

Proposed Increase in Medicaid Payments Helps Patients and Docs Both

Thirty-six percent of AAFP members do not accept new Medicaid patients, and nearly 20 percent don't see Medicaid patients at all, according to a 2011 member survey. Considering that in 2008, Medicaid paid an average of 34 percent less than Medicare(www.statehealthfacts.org) for primary care services, those numbers aren't surprising. In nine states, the difference was more than 40 percent.

However, that sizable gap between the two programs will disappear starting in January.

This week CMS announced a proposed rule(www.cms.gov)  to implement a provision of the Patient Protection and Affordable Care Act that requires Medicaid to pay family medicine, general internal medicine, pediatric medicine and related subspecialists at Medicare levels in 2013 and 2014. At least 60 percent of a physician's billings must come from specified primary care services to qualify for the payment increase.

The proposed rule would increase Medicaid reimbursement for family physicians significantly in at least 40 states. It also would increase reimbursement for immunizations given through the Vaccines for Children program.

The AAFP has been advocating health care for all for more than two decades, and these changes are important steps forward in ensuring access to care regardless of economic status. In 2010, Medicaid covered 48.6 million Americans(www.kaiserhealthnews.org), or nearly 16 percent of the nation's population.

The cost of bringing Medicaid reimbursement in line with Medicare -- $5.5 billion a year -- will be covered entirely by the federal government. However, the cost estimate from the Congressional Budget Office does not consider potential health care savings created by increased access to care and avoidance of care costs downstream because of increased access.  

We all know that patients who don't have health care coverage often put off preventive services and wait until a small problem has turned into a crisis, which costs the entire health care system more. Increasing Medicaid payment for primary care services likely will result in an increase in access to care, improved outcomes and lower overall health care costs.

In fact, a recent study (www.commonwealthfund.org) by the Commonwealth Fund shows that a 10 percent Medicare payment increase for primary care ambulatory visits -- a provision of the Affordable Care Act that took effect last year -- will increase primary care visits by nearly 9 percent. And, although the costs for overall primary care visits are expected to increase 17 percent, the study projects a 2 percent net savings for Medicare.

Under the proposed rule, we will have two years to prove it, and the Academy will be pushing Congress to continue the increased payments beyond 2014.

Meanwhile, those two years buy us time to analyze new payment models that are being studied by the Comprehensive Primary Care Initiative, health plans and others.

Although Medicare remains unstable -- with a 30.9 percent reduction in the payment rate scheduled to take effect on Jan. 1, 2013 -- there was good news on that front May 9 with the introduction of a bipartisan House bill  that would eliminate the sustainable growth rate and revamp the Medicare payment system.

In contrast to our member statistics on Medicaid, 90 percent of AAFP members participate in Medicare, and 83 percent are accepting new Medicare patients. So how will increased Medicaid payments for primary care affect your participation in that program?

Roland Goertz, M.D., M.B.A., of Waco, Texas, is Board Chair of the AAFP.

Posted at 02:39PM May 11, 2012 by Roland Goertz, M.D., M.B.A.

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