Practice Economics

Medicaid Payments for Some Primary-Care Services Reach Parity with Medicare Levels


On Nov. 1, 2012, the Centers for Medicare & Medicaid Services (CMS) released the final regulation implementing increased Medicaid payments for specified primary-care services to 100% of Medicare levels in 2013 and 2014.

Covered Medicaid services include evaluation and management codes between 99201 and 99499 when used by physicians with a specialty designation of family medicine, general internal medicine, or pediatric medicine. CMS also finalized a policy to qualify services provided by subspecialists related to the designated primary-care specialists board-certified by the American Board of Medical Specialties, American Osteopathic Association, and the American Board of Physician Specialties. Advanced-practice clinicians also qualify for the increased payment when services are furnished under a physician’s personal supervision.

In commenting on the proposed rule, SHM stated that hospitalists should qualify for purposes of the increased payment because they are an important part of the “team” of clinicians required to treat many common conditions within the Medicaid population, and that hospitalists often provide the first contact and facilitate an entry point into the comprehensive care network.

CMS agreed.

The codes included in the pay increase will be limited to traditional primary care but also will include hospital observation and consultation for inpatient services provided by nonadmitting physicians, ED services, and critical-care services.

Hospitalists will qualify for the enhanced payment, but it remains somewhat unclear how individual states will handle the increase. State Medicaid agencies could pay physicians based on their self-attestation alone or in conjunction with any other provider enrollment requirements that currently exist in the state. Further, inclusion of a code does not require a state to pay for the service if it is not already covered under the state’s Medicaid program. All other state coverage and payment policy rules related to the services also remain in effect.

Timing of the pay increase also remains unclear. The statute requires that states make higher payments for services provided on or after Jan. 1, 2013, but for many physicians, the higher payment might be longer in coming despite being retroactive to the January deadline. States must submit a State Plan Amendment (SPA) to reflect the fee schedule rate increases by March 31, 2013, and CMS may then take up to 90 days to review and approve the SPA. Therefore, it could be six months or longer before eligible physicians and practitioners receive any of the payment increase.

States will receive an estimated $5.8 billion in 2013 and $6.1 billion in 2014 in federal funds to meet this two-year requirement, unless Congress acts to extend or fund the provision permanently. In response to an SHM suggestion on the potential to extend the increase, CMS will be collecting relevant data on the impact of the pay increase on Medicaid patients.

Even with the remaining uncertainty and timing issues, this is a change in payment policy that presents an important shift in the valuation of primary-care services, including some services provided by hospitalists. Medicaid services are notoriously undervalued, and this increase to providers will certainly have a positive impact on the accessibility of care for patients.

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

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