Obamacare is about to give Medicaid docs a 73 percent raise

As Medicare providers panic about going off the "fiscal cliff," Medicaid doctors are awaiting a pretty giant Christmas present: A 73 percent raise for their primary-care services.

The health-care law will, starting in 2013, boost the salaries of Medicaid primary-care doctors to match those of Medicare providers. The whole idea was to ensure that Medicaid doctors stick with the program as it expands, in 2014, to cover millions more people. Legislators wanted to avoid a situation of when newly insured patients had a Medicaid card, but couldn't find a doctor accepting new patients.

Right now, doctors get paid a lot less for seeing Medicaid patients than they do for a visit with a Medicare beneficiary or a privately insured patient. You can see that in this map, from the Kaiser Family Foundation, which shows the ratios between Medicare and Medicaid doctors in each state. On average, Medicaid pays doctor 66 percent of Medicare reimbursements, with lots of national variation: Rhode Island pays at 37 percent of Medicaid rates, whereas North Dakota actually pays more, 134 percent.

The majority of states pay Medicaid doctors less than 85 percent of Medicare reimbursements. For primary care, the situation is even worse: Medicaid reimburses, on average, 59 percent of what Medicare does for visits like regular check-ups and preventive care.

That changes 10 days from now: In 2013, the Affordable Care Act will boost Medicaid primary care rates to match those of Medicaid. That amounts to, on average, a 73 percent pay raise for primary-care providers. Again, there's a lot of variation among states, given that they pay Medicaid doctors very differently right now. Here's another Kaiser map breaking down the reimbursement rates by state.

This doesn't happen every day for Medicaid. As the Kaiser analysts note, "The estimated 73% average increase in fees in 2013 far exceeds any Medicaid fee increases that have been observed historically."

The pay hike is, however, temporary: The Affordable Care Act only provided funding through 2014. If the new pay rates do indeed attract more doctors to the program, the Kaiser analysts predict that "interest in extending the higher Medicaid rates beyond 2014 is likely to be."

That could create a situation akin to the much-maligned doc-fix, where Congress passes short-term funding patches to keep doctor salaries stable. Primary-care groups are already talking about lobbying for that additional funding. Which could mean, two years from now, Medicaid doctors could find themselves in a less desirable situation, staring down a 73 percent pay cut rather than a raise.