Weathering the Delay in Medicaid Physician Pay Increases

A Medicaid physician pay boost, as provided for in the Affordable Care Act, was supposed to take effect on Jan. 1, 2013. Five months later, that pay boost — expected to significantly narrow the gap between Medicaid and Medicare reimbursements — has yet to materialize.

The simple answer for the delay, says Jodi Laurence, a partner with the Florida Health Law Center, would be that states have yet to submit plan amendments to the CMS for approval. But, she adds, the answer isn’t that simple.

“It’s part of the bigger picture that health care reform takes time,” Laurence explains. “There are a lot of pieces to the puzzle. And whenever something is voluntary, and whenever money and change are involved, these things take time.”

The bigger picture

As Laurence notes, there are many pieces to this puzzle. One of those pieces is the 90 days the CMS has to approve state plan amendments from the time they’re submitted. Laurence’s understanding is that many states have, in fact, submitted plan amendments. But with a 90-day window, even plans submitted in early April might not be approved until some time in July.

Another piece to the puzzle is that the Supreme Court’s ruling on the ACA allows states to opt out of the law’s Medicaid provision. According to The Advisory Board Company, only 26 governors support Medicaid expansion, which leaves 24 states that are either leaning toward supporting expansion, planning an alternative model, leaning towards not participating or firmly not participating (15 states).

Laurence is not surprised that nearly half of the states do not support Medicaid expansion and points to the huge discrepancy between state reimbursement levels. For example, primary care physicians in Rhode Island and New York would see 198% and 156% increases, respectively, while Delaware and Oklahoma would receive 2% and 3%, respectively. North Dakota slots in at 0%.

“If payment increase is varying, and if some states aren’t going to get an increase or boost, they have no incentive to file a plan and to do all of this extra work,” Laurence says. “Because it is work on the part of states to have this whole accreditation process in place. CMS provides a template, but, still, it’s extra work for [the states]. And why do the extra work if you’re not going to get more money?”

Provider impact

Laurence says that in Florida, at least, physicians are maintaining the status quo. She has not seen “a rush of providers” signing up for the Medicaid program thinking they’re going to make a lot of money. Part of that can be attributed to the mixed signals coming from the state government. According to Laurence, Florida Governor Rick Scott (R) has stated that he would not be the one to deny the needy access to health care. However, the state legislature has indicated otherwise by not included funding for Medicaid expansion in the latest state budget.

“This is all contingent on wanting to incentivize physicians to participate in Medicaid, because we’re going to need providers to care for all these additional Medicaid recipients,” Laurence says. “But if it’s optional whether or not states are going to expand their program, many states are going to say ‘No.’”

Do providers really want additional Medicaid patients? Laurence says what providers want is appropriate reimbursement.

“If they were going to receive a fair reimbursement to provide care, I think they would participate,” she explains. “Providers are seeing cuts across the board, and I think if Medicaid could be lucrative … I mean, very rarely do you see a provider not participate in Medicare. And if they were going to get the same reimbursement, I don’t know why they wouldn’t [participate in Medicaid].”

Laurence, who does a great deal of work representing children’s hospitals and pediatricians, points to the growing gap between Medicare and Medicaid reimbursement. She says that children’s hospitals and pediatricians make the least amount of money yet provide the most care to the Medicaid population. Equal footing, she says, is only appropriate.

“These are kids we’re talking about, and the poorest people,” Laurence says. “For God’s sake, that’s who we should be taking care of. Our country has it backwards.”

Looking ahead

Laurence says that all the elements surrounding Medicaid expansion are good, well-intentioned things. Closing the gap between Medicare and Medicaid; reimbursing providers at a fair rate; more money to care for the sickest children and the poorest — all of these are good things.

“All [approved state amendments] are supposed to be retroactive to Jan. 1, 2013, so that’s a good thing as well,” Laurence says. “I have no answers, but I’m hopeful. It’s going to take some time, but I’m hopeful it will happen sooner rather than later.”