Most primary care doctors are still waiting for that Medicaid pay raise that was scheduled to begin in January under the Affordable Care Act, but a federal official says the government has now approved applications from 48 states to begin paying the higher rates.
A spokeswoman for the Centers for Medicare & Medicaid Services says with those approvals in hand, every state but California and Alaska is expected to implement the pay raise this summer. Under the law, Medicaid fees for primary care would be increased for two years to the same amount paid under Medicare. The change means an average 73 percent pay increase nationally, according to a 2012 study by the Kaiser Family Foundation (Kaiser Health News is an editorially independent program of the foundation.)
The two states not included in the federal approvals are Alaska and California. Alaska already paid the higher rates before the law was implemented. The Obama administration is still reviewing California’s application. California Medicaid officials say they hope to begin paying the higher amounts in September. The pay raise would be significant in California because its Medicaid reimbursements are among the lowest in the country.
Medicaid pay to doctors has been a point of dispute between California Medicaid officials and patient advocates for years. When the state reduced rates for doctors in 2008, advocates sued, saying the reimbursement was so low it would drive away providers and violate the Medicaid Act’s promise that poor patients would have access to quality care. The 9th Circuit Court of Appeals, based in San Francisco, blocked the cuts. But the Obama administration later approved the state’s request for the lower pay. The Supreme Court last year declined to rule on the case and sent it back to the 9th Circuit.
The two-year pay raise is intended to entice more doctors to treat the millions of residents expected to enroll in Medicaid in 2014 when the federal health law expands eligibility. Critics have said the expansion of the federal-state program for the poor would accelerate the shortage of doctors who treat them.
Matt Salo, executive director of the National Association of Medicaid Directors, said states are frustrated about the delay, particularly since the provision was designed to improve access for Medicaid recipients. “Its been slow to roll out … and it’ll be gone less than 18 months after it starts,” he said.
Part of the reason for the delay is the difficulty figuring out how to implement it, particularly since Medicare does not pay for some services – such as treatments related to children or to childbirth. Another obstacle, Salo said, was determining how Medicaid managed care firms could implement the raise when they pay doctors a monthly fee per patient, rather than for each claim made by the patient.
The Obama administration also did not issue the rules on Medicaid pay until last November, and state officials said they needed extra time to carry out the change and get federal approval of their new rates.
While Medicaid fees vary by state, they are generally far below those paid by Medicare and private plans.
CMS said that when states do implement the provision, doctors will be able to get the higher fees retroactively to Jan. 1. But many states set deadlines for April or May for doctors to self-attest that they are primary care physicians willing to accept Medicaid patients in order to get the retroactive pay. Those that missed the deadline will only receive the pay raise once they fill out a form showing they are licensed as a family doctor, pediatrician or internist.
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communications organization not affiliated with Kaiser Permanente.