HHS Sets Medicaid Primary Care Payments to Match Medicare

For the next two years, doctors who provide primary care to Medicaid patients will receive the same payments as those who serve Medicare recipients, the U.S. Department of Health and Human Services (HHS) announced Thursday.
by , | November 2, 2012

For the next two years, doctors who provide primary care to Medicaid patients will receive the same payments as those who serve Medicare recipients, the U.S. Department of Health and Human Services (HHS) announced Thursday.

The change is part of the Affordable Care Act (ACA), and the increased payments will be fully funded by the federal government. According to a 2010 analysis by the Urban Institute, the increase will cost HHS up to $11 billion and result in a 64 percent payment increase on average for providers, as those who serve Medicare patients (fully funded by the federal government) are paid more than those who serve Medicaid patients (jointly funded by the states and HHS).

States will have some discretion in how the policy is implemented, HHS said. They can either lock in the rate based on the current Medicare fee schedule or leave the rate to adjust with future changes to the Medicare payment structure (which could change with a deficit reduction deal, for example). They can also set one rate for the entire state or adjust it within different localities that have different Medicare rates.

As Kaiser Health News noted, some doctors (OB/GYN and emergency room doctors among them) will not see their rates go up.

It remains to be seen if the increased payments will spur more doctors to accept Medicaid patients. A study published in the August 2012 issue of Health Affairs found that more than 30 percent of doctors don't accept Medicaid beneficiaries because the payment rates are too low.

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