Congress Passes Medical Assistance Program for States

Move Averts Possible Cuts to Physician Payments

August 11, 2010 05:00 pm James Arvantes

On Aug. 10, Congress provided a lifeline for beleaguered states overburdened with Medicaid program payments when it passed legislation designed to extend increases in the Federal Medical Assistance Percentage, or FMAP, program for the first six months of 2011. President Obama signed the legislation on Aug. 11.

"The passage of this measure will help prevent further deep cuts to physician payments, meaning that family physicians, already on a tight payment margin with Medicaid, can continue to see these patients," said Greg Martin, the AAFP's manager of state government affairs.

H.R. 1586( provides states with $16.1 billion for increased FMAP funding during the first six months of 2011 before gradually phasing out the increased rate. The measure provides a 3.2 percentage point increase in FMAP funding for the second quarter of the 2011 federal fiscal year, which ends on March 31. That amount phases down to a 1.2 percentage point increase in the third quarter of 2011, which ends on June 30.

Although the American Recovery and Reinvestment Act of 2009 provided a 6.2 percentage point increase in the FMAP for each state's Medicaid program to assist with the increased demand for services caused by the recession, that increase was scheduled to expire on Dec. 31. Without the extension, many states would have had to cut budgets, putting Medicaid payments to physicians at risk, along with patient access to Medicaid.