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Will increase in rates boost Medicaid primary care?
The federally funded increase in Medicaid primary care reimbursement rates, which requires providers to be reimbursed at parity with Medicare rates in 2013 and 2014, presents states with both challenges and opportunities, according to a January 2011 brief from the Hamilton, NJ-based Center for Health Care Strategies (CHCS), Increasing Primary Care Rates, Maximizing Access and Quality.
Tricia McGinnis, senior program officer at CHCS and the brief's lead author, says the increase will provide a big boost to Medicaid primary care. "As of 2008, the average Medicaid fee-for-service reimbursement rate was only about 66% on average of the rates paid by Medicare across the country," she says. "This will be a significant increase."
The expectation, says Ms. McGinnis, is that the new revenue will enable states to recruit additional physicians to participate in Medicaid, and provide more robust financial support to their existing network of primary care providers. This, she says, will potentially expand access to care.
The increase was included in the Affordable Care Act (ACA) in part to help with access issues, says Ms. McGinnis, since there will be up to 20 million newly eligible individuals coming onto Medicaid programs.
"There are a few challenges to implementation ahead," says Ms. McGinnis. One is that the Centers for Medicare & Medicaid Services has not yet released its regulations or any guidance to the states around how to implement this measure, she says, so states are watching closely to see how that evolves.
Ms. McGinnis notes that some states with payment models other than fee-for-service, like managed care or bundled payment approaches, will face some challenges in implementing the increase. "Medicare rates are based on the fee-for-service model, so bumping up to a managed care rate may be difficult for those states to do," she says.
The legislation applies only to physicians who are practicing family medicine, general internal medicine, and pediatric medicine, and Ms. McGinnis notes that this excludes nurse practitioners, physician's assistants, and certain specialists.
"Providers delivering family care services on the ground really go beyond just physicians," she says. "The legislation includes only a subset of practitioners providing family care. Because of that definition, it could be challenging to maximize the opportunity to increase access."
The broader challenge, says Ms. McGinnis, is that the provision only lasts between 2013 and 2014. "The need for this funding will not go away," she says. "It will be a challenge to sustain that funding beyond 2014."
Ms. McGinnis says that the increased primary care rate offers broader policy opportunities, beyond just increasing access. "For states that are exploring innovative approaches to payment, the low reimbursement rate is often a big barrier," she says.
The increased reimbursement is likely to encourage innovative approaches that align payment with quality of care, says Ms. McGinnis.
Some states have already implemented payment reforms around medical homes, notes Ms. McGinnis, and the primary care rate increase should encourage states to expand this approach as well as other innovations, such as Accountable Care Organizations.
"Those are delivery care innovations that don't rely on fee-for-service payment approaches," says Ms. McGinnis. "Depending on how the regulations are structured, this primary care revenue stream could really kick-start those innovations.
Ms. McGinnis notes that some of the provisions in the ACA offer matching funds and significant opportunities to curb costs. "So even cash-strapped states will be able to take advantage. For example, health homes is at a 90/10 match," she says. "Because these are innovations that could potentially bend the cost curve, states are much more willing to look at them."
Contact Ms. McGinnis at (609) 528-8400 or firstname.lastname@example.org.