Although Medicaid is jointly funded by states and the federal government, the pay boost would be covered entirely with federal dollars totaling more than $11 billion over the two years it would be in effect.
Congress automatically appropriated those funds when it adopted the health-care law, so it will not need to act now.
However, the provision is among hundreds that could be instantly nullified if the Supreme Court decides to overturn the law in its entirety when it rules on the constitutional challenge. The court heard arguments on the case in March, and a decision is expected late next month.
The pay raise is one of several attempts in the law to address a fundamental challenge in U.S. health-care: Because primary care doctors focus on preventive care, they offer the best hope of curbing the nation’s health spending. Yet they are paid far less than specialists, contributing to a shortage of primary care doctors that is projected to grow with the aging of baby boomers, the retirement of physicians and an expected influx of more than 30 million Americans who will gain insurance through the health-care law beginning in 2014.
The Association of American Medical Colleges (AAMC) has estimated that by 2020 the shortage of primary care doctors will reach 45,400.
The problem is most acute for patients covered by Medicaid, which pays substantially less than Medicare, let alone private insurers. And about 17 million of those newly insured by the law after 2014 will be covered by Medicaid.
In a statement Wednesday, Marilyn Tavenner, who heads the agency that administers Medicaid, described the pay raise as “an important tool for states to ensure their primary care networks are prepared for increased enrollment as the health care law is implemented.”
“Today’s action will help encourage primary care physicians to continue and expand their efforts to provide checkups, preventive screenings, vaccines, and other care to Medicaid beneficiaries,” she said.
Administration officials also noted that the law has already increased Medicare payments to primary care doctors — awarding more than 150,000 physicians almost $560 million in additional compensation in 2011.
Officials also pointed to a range of other initiatives in the law to bolster the primary care workforce, such as increasing primary care residency slots and offering scholarships and other incentives to medical professionals willing to work in under-served areas.
Atul Grover, chief advocacy officer for the AAMC, praised the Medicaid pay boost.
“I don’t think we’re going to solve the problem of access in this one short provision. But it’s a step in the right direction.”
Still, he said, “it’s just two years. So what do you do after those two years are up?”