2015 is a year of coping with Medicaid and Medicare cuts

It’s a new year, and some family physicians are facing immediate and pending cuts to their Medicaid and Medicare payments. What can you do in response?

The Affordable Care Act increased Medicaid payments for specified primary care services to Medicare levels for certain primary care physicians in 2013 and 2014. Unfortunately, that provision has expired, and for most family physicians, Medicaid parity payments ended Dec. 31. More than a dozen states have made a commitment to continue the payment policy in 2015 at their own expense. However, that still leaves most states in the position of reverting to rates below Medicare, an effective cut in Medicaid payment from 2014 for family physicians in those states.

Some family physicians are also experiencing an immediate cut in their Medicare payments due to adjustments (i.e. penalties) associated with Medicare initiatives such as the Physician Quality Reporting System and Meaningful Use. Those who are and even those who are not also face an impending cut in Medicare payments due to the Sustainable Growth Rate (SGR). Under current law, the Medicare physician payment rate will be reduced by 20.1 percent on April 1 unless Congress intervenes in the meantime. Congress is expected to take the necessary steps to prevent this cut, but it is unclear if lawmakers will attempt to enact long-term payment reforms before the 2016 election. More likely is a 20- to 24-month extension of current payment rates in March and then an attempt at permanent repeal of the SGR in late 2016.

So, what to do? One option is to advocate with your elected representatives for both Medicaid parity and permanent repeal of the SGR. Doing so is easy and readily available online. Other options include limiting or reducing the number of Medicaid and Medicare patients in your practice or simply opting out of Medicare and privately contracting with your Medicare patients. Family Practice Management is a good source for more information on these options.

It’s a new year, but payment for Medicaid and Medicare remains an old problem. Here’s hoping that 2015 is the last year you have to deal with it.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians