Affordable Care Act (ACA) Provision Carries Pay Raise for Some Hospitalists

From: The Hospitalist, April 2013

Hospitalists who care for Medicaid patients will see a pay increase in 2013 and 2014 under ACA payment parity rules

by Joshua Boswell

For those who remain unaware, hospitalists who care for Medicaid patients will be getting a raise in 2013 and 2014. The reason is that the Affordable Care Act (ACA) requires Medicaid rates for specified primary-care services to be equal to those of Medicare rates during those two years, with the federal government paying the difference. Hospitalists generally meet the requirements and, therefore, will see this pay increase for their applicable Medicaid billing. For some context of the scope of this change, on average, Medicaid pays physicians at 66% of the national Medicare rates, although there is significant variation among the states.

To qualify, a physician must have a specialty designation of family medicine, internal medicine, or pediatrics, then further attest to board certification in one of those specialties or related subspecialties. Alternatively, the physician must have a 60% claims history for the specified evaluation and management (E&M) codes.

Multiple parties who have heard reports about state plans for Medicaid parity recently have contacted SHM; the plans, they report, intentionally would exclude hospitalists from the promised increase. There are variations on the explanation for the exclusion and where the idea is coming from, but the inquiries follow this general theme: “Since the definition of eligible physicians remains a grey area, states are developing alternative plans with a more narrow interpretation of the qualifying factors for the increase. These plans are only including physicians who practice in the community setting (i.e. not the hospital setting).”

This is demonstrably wrong. Even if states are having these discussions, such a plan is not going to come to fruition. The final rule for Medicaid parity, which essentially has the effect of law, is very clear: It does not allow for differing eligibility or alternate state plans.

The Centers for Medicare & Medicaid Services (CMS) specifically stated in the final rule that the increase is not limited to office-based primary-care services, but it will also include hospital observation and consultation for inpatient services provided by nonadmitting physicians, ED services, and critical-care services. In other words, a hospitalist who attests eligibility for their respective state Medicaid agency and bills 99231-3, 99221-3, 99238-9, etc., will receive the increased payment for these codes.

In response to an SHM inquiry for further clarification, CMS officials have stated, “The regulation requires that qualified physicians billing eligible codes receive higher payment. States do not have the latitude to exclude physicians simply because they practice in hospitals.”

It is possible that some confusion might be arising due to the recent controversies around the upcoming Medicaid expansion, which would extend Medicaid eligibility to individuals who earn up to 138% of the federal poverty line. Some states have chosen to opt out of this expansion and have publicly fought its implementation. The Medicaid parity provision is parallel to, but independent of, Medicaid expansion. Even if a state opts out of the expansion, the Medicaid payment increase for primary-care services should remain unaffected.

This isn’t to say that the Medicaid parity provision is a certainty. With the eyes of Congress turned toward budget cuts and austerity, the funds allocated for this temporary increase could easily be targeted. Regardless, any change in eligibility would require a rule change at the federal level, which is unlikely.

Many states have already devoted much time and effort on plans to implement the provision, and the plans were due to be submitted to CMS on March 31. It is pretty late in the game to consider changes. Barring an unlikely rule change or total elimination of funding, it is clear that hospitalists are eligible for the payment bump and should remain so.


Josh Boswell is SHM’s senior manager of government relations.


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