Increased Medicaid Payment for Primary Care

The Center for Medicaid and CHIP Services (CMCS) issued an informational bulletin on 9 May 2012  providing details on two topics:

  • Proposed Rulemaking Notice: Increased Medicaid Payment for Primary Care (CMS  2370-P)
  • Upcoming effective date of Provider Preventable Conditions rule

We admit that most of us do not scan the papers and online sources each morning, eagerly seeking out such announcements.  This is pretty dry stuff, and certainly the titles are not engaging or compelling in any way.  But we might just take note, here.  The great health care debate has many dimensions and lots of behind-the-scenes subplots, side deals and stories.  These little stories will indeed affect us, eventually.  And we should pay particular attention to anything involving doctors and pay rates.

What the CMCS is talking about in the first item is a proposed rule to implement a provision of the Affordable Care Act that provides increased payments for specific Medicaid primary care services.  These increased payments apply to primary care services delivered by physicians with specialty designations of family medicine, general internal medicine or pediatric medicine or related subspecialties.

The proposed rule explains just how the CMCS and the states are to work together to make the increased payments operational.  It details how eligible providers and services are to be identified and how to satisfy the regulatory requirements when making these payments for services provided through managed care.  An important aspect of the new system involves the Vaccines for Children (VFC) program, which has its own very specific requirements  for billing and payment.

Of course, the financial formulas and calculations for increased payments are, shall we say, complicated, but here are the basics: Under the provision, eligible doctors that provide specific primary care services would be paid the Medicare rates in effect in calendar years (CY) 2013 and 2014 (or, if greater, the Medicare rate in effect in 2009) instead of their customary state-established Medicaid rates (which may be lower than the federally established Medicare rates).  The states, in turn, will receive 100 percent Federal financial participation (FFP) for the difference between the Medicaid state plan payment amount as of 1 July 2009 and the applicable Medicare rate.  Whew!  We need more primary care physicians — let’s hope this works!

Almost done.  The proposed rule would allow states some options here:

  1. They can lock rates at the level of the Medicare physician fee schedule in effect at the beginning of 2013 or 2014, or
  2. They can modify the rates in step with all the updates made by Medicare.  The regulation stipulates that all of the requirements relating to increased payments apply to services reimbursed by Medicaid managed care plans.

The Provider Preventable Conditions Rule (PPCsis a different matter.  On 6 June 2011, the CMS published the final rule implementing PPCs as authorized by the Affordable Care Act, Section 2702.  The point of this rule?  It prohibits federal payments to states under section 1903 of the Social Security Act for any amounts spent to provide medical assistance for health care-acquired conditions.

Now this sounds ominous, on the face of it.  But the idea is that it encourages, with a considerable financial incentive, quality improvement at the provider level.  Essentially, there is no more paying for things that should not have happened in the first place.  This should save money for the states as well as it reduces their payments for hospital errors and Never Events (absolutely inexcusable outcomes in a health care situation) in specific health care settings.

The final implementation date is 1 July 2012.  Again, the rule became effective 1 July 2011;  the additional time was given to allow states enough time to discuss and absorb the policy, implement required hospital changes and develop an effective reporting system.

There is lots more information available: CMCS Informational Bulletin.

Special thanks US Department of Health and Human Services, Centers for Medicare and Medicaid Services and

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