HHSC delays Medicaid fee increase for now

Organized medicine to Washington: Don’t reverse Medicaid bonus

posted 12.18.12

The Texas Health and Human Services Commission has postponed the Medicaid primary care physician payment increase authorized under the Patient Protection and Affordable Care Act. The federal health care reform law requires states to increase Medicaid payments to Medicare parity for primary care services provided by pediatricians, family physicians, and general internists from Jan. 1, 2013, to Dec. 31, 2014, with the federal government footing the bill for the higher costs.

“The Centers for Medicare and Medicaid Services published final rules implementing the rate increase on Nov. 1, leaving states scrambling to interpret the implementation requirements and to make the necessary system changes,” said Helen Kent Davis, director of government affairs for the Texas Medical Association, in a TMA Action news brief. “By late November, it was clear that there were too many outstanding technical issues to be resolved for Texas and other states to implement by Jan. 1.”

The final implementation date has not yet been determined. However, Davis said the state will make retroactive payments for eligible services delivered on and after Jan. 1 to ensure eligible primary care physicians receive two years of higher payments. The Kaiser Family Foundation estimates that Texas physicians will see their Medicaid payments increase by about 54 percent in 2013.

The higher payments will apply to evaluation and management codes and vaccine administration codes and will benefit physicians who participate in both Medicaid fee-for-service and Medicaid HMO plans. The final federal rule specifies that physicians who are subspecialists of one of the three primary care physician specialties named in the law will also be eligible for higher payments. Payments for eligible services provided by physician assistants or advanced practice nurses will also increase if patients receive the service under physician supervision. To receive the higher payments, physicians must attest that they meet the requirements specified in the federal rules.

The payment increase was included in the law to encourage more primary care physicians to accept Medicaid patients in advance of the program’s expansion to millions of previously uninsured low-income adults.

However, as reported in the Dec. 6 issue of TAFP News Now, congressional lawmakers are considering reversing the Medicaid bonus to help offset the cost of a patch for Medicare’s sustainable growth rate formula, which, without action, will automatically cut physicians’ payment for Medicare services by 26.5 percent starting on Jan. 1, 2013.

Leaders of the four largest medical societies in Texas—TMA President Michael Speer, M.D.; TAFP President Troy Fiesinger, M.D.; Texas Pediatric Society President Kimberly Avila Edwards, M.D.; and American College of Physicians – Texas Chapter President Jose A. Perez Jr., M.D.—sent a letter to the Texas Congressional delegation urging them to maintain the pay hike for Medicaid primary care services.

“We cannot turn Medicaid into a more effective delivery system until we shore up Medicaid patients’ eroding access to primary care physicians and key specialists,” they wrote in the letter. “Only 31 percent of Texas physicians now accept all new Medicaid patients, according to a recent TMA survey, and poor payment is the primary culprit. CMS recognized this when it acted to boost Medicaid payments for eligible physician services. Reversing this solution for short-term savings—even if those savings might be used to fix Medicare's glaring payment problems—will ultimately cost lives and more money.”

The American Academy of Family Physicians issued an action alert in early December urging members to contact their congressional representatives with a similar message. “If Medicare’s flawed Sustainable Growth Rate formula isn’t addressed, the pay cuts faced by family physicians in 2013 are very serious, but withdrawing the promise of primary care for low-income working families cannot be used to avoid the SGR’s cut.”

And the American Medical Association and other national and state medical and specialty societies across the country also wrote Congressional leaders to oppose the cut. Their letter said: “The Medicaid payment increase is an important policy that attempts to better align payment rates with cost of care for primary care physicians, thus increasing access to primary care physicians for millions of Medicaid patients.”