Final Rule Approves Pay Raise for Medicaid Primary Care Services

Starting in January 2013 and extending through December 2014, physicians and practitioners (such as physician assistants and nurse practitioners) will receive reimbursement for Medicaid primary care services comparable to those paid for Medicare. As I noted in this blog when the proposed rule was released, 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 care services. The positive impact of primary care on the health of children through different phases of development is undisputed.

This week, the final rule for implementing the increase was released and will be published in the federal register on November 6, 2012. The final rule clarifies that the increased reimbursement applies to CHIP-funded Medicaid expansions. It also tweaks some of the underlying administrative requirements on states. Unfortunately, the final rule reiterates that CMS does not have statutory authority to extend the higher reimbursement to OB-GYN services as recommended by providers and advocates during the comment period.

Now, states move to implementation, which is critically important. As I noted in this second blog in the series, although the federal government is picking up 100 percent of the tab for the increase, the law establishes a point in time – July 1, 2009 – as a base for the increased federal reimbursement. In other words, states that have decreased primary care service rates since July 1, 2009, will need to restore payment rates for affected primary care physicians, subspecialists and practitioners. Those states will likely be less than enthusiastic about implementing this critical increase intended to help assure adequate access to essential primary care services in Medicaid.

Despite the implementation challenges, this rule is a positive step in the right direction. Not only does it address primary care reimbursement but it also includes the first increase since 1994 in fees to providers who administer qualified pediatric immunizations through the Vaccines for Children (VFC) program. This part of the rule has a new benefit for children who receive VFC shots 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.

The boost in reimbursement is just reparation to the professionals who have chosen less lucrative health care careers in primary care. The final rule also provides for the collection of data that could be helpful in consideration of a future extension of the increased reimbursement. Hopefully, we’ll be talking about this again on “Say Ahhh” two years from now.

For additional information on the final rule, see this CMS fact sheet.

Tricia Brooks
Tricia Brooks is a Senior Fellow at the Center for Children and Families