Primary care is one of our best buys in health care because of its proven effectiveness in improving health outcomes and avoiding more costly health services. This is particularly true for children as they move through different phases of development, and people with chronic health conditions. But it’s also a well-known fact that primary care providers are paid on the lower end of the health care payment spectrum. So we were pleased that, among the many provisions of the Affordable Care Act, was a plan to boost payments for primary care services for Medicaid beneficiaries, with the federal government picking up the tab for increasing state Medicaid rates to the equivalent of Medicare in calendar years 2013 and 2014.
Today, the Centers for Medicaid and Medicare Services released its proposed rule to implement this provision. The rule gives physicians with a specialty designation of family medicine, general internal medicine, or pediatric medicine, as well as related subspecialties, a long overdue raise. The rule clarifies that primary care services rendered by practitioners under supervision of a physician – such as physician assistants and nurse practitioners – will receive the enhanced payment as well. It also applies to subspecialists, such as a pediatric cardiologist, who provide primary care services. The rules unfortunately fall short in one key area – they do not include OB-GYN services, which CMS states is beyond the definition of primary care services in the law.
The federal government will pick up 100% of the difference in cost between what states were paying as of July 1, 2009 and the applicable Medicare rate. Translation – if your state reduced provider rates after July 1, 2009, it will have to restore those decreases at its regular Medicaid matching rate.
The new rates apply to services delivered through Medicaid managed care plans, and the rule proposes that states incorporate the increased payment in their contracts with these entities. CMS intends to work with states to develop a methodology for identifying the differential in capitated rates that should be made to managed care entities. In turn, the managed care entities will be required to provide sufficient documentation to the states to demonstrate that their payments to these providers, whether capitated or fee-for-service, meet the new requirements.
The proposed rule also gives a raise to providers who give qualified pediatric immunizations to kids enrolled in Medicaid in states that participate in the Vaccines for Children program. This is the first increase in payment (which appears to be in the 50% range above current rates based on the state-by-state payment chart) for administering vaccines since 1994. This part of the rule has a new benefit for children who participate in the VFC program because they are uninsured or have insurance that does not cover vaccines. Currently, providers can charge whatever their regular rates are for administration of vaccines to uninsured or underinsured children, although many do so for free. Under the proposed rule, the providers that do charge uninsured or underinsured families cannot charge more than the posted state Medicaid reimbursement rate.
We’ve only scanned the 78-page proposed rule in an effort to get this long awaited information posted as soon as possible. We’ll continue to review the proposed rule and provide more details soon. Keep in mind that the comment period on this proposed rule is 30 days from when the rule is published in the federal register (TBD). In the meantime, you can find the rule here or at www.ofr.gov/inspection.aspx.
For additional information see the CMS Fact Sheet.
