With the start of the new year comes less money for some local primary care providers seeing Medicaid clients.
A provision of the Affordable Care Act that increased Medicaid reimbursement rates for some providers expired at the end of 2014. And unless state legislatures decide to extend those enhanced rates, providers will continue to be paid less to care for Medicaid clients than they are for Medicare and commercial insurance patients.
“We certainly have an interest in continuing it,” said MaryAnne Lindeblad, Medicaid director at the state Health Care Authority. “Especially supporting primary care, that is the backbone of Medicaid.”
Low reimbursement rates are often cited as a reason physicians are reluctant to provide care for people with Medicaid, the state health program for low-income children and adults. To encourage providers to care for those patients, particularly as the state prepared to expand its Medicaid program, the Affordable Care Act provided a payment increase for certain primary care providers in 2013 and 2014.
During those two years, the Medicaid reimbursement rates for family medicine, general internal medicine and pediatric physicians were increased to Medicare reimbursement levels, which are still lower than those of commercial insurance plans.
That enhancement expired Dec. 31.
Gov. Jay Inslee included $79 million in his proposed 2015-17 budget to extend the Medicaid rate increase through the biennium, but he did not include funding for an extension in the 2015 supplemental budget. That means even if the extension remains in the biennial budget there would be a six-month gap in funding.
Examples of the enhanced rates and regular rates, provided by the Health Care Authority, illustrate the decrease.
Under the enhanced rates, a physician would be reimbursed $73.39 or $108.29 for an office visit for a child, depending on the type of services provided. Under the regular rates, providers are reimbursed $58.37 or $86.11 for those same visits.
The gap is wider for adult patients. Enhanced rates for an adult office visit are the same as the child rates, but the regular rates are significantly lower — $38.71 and $57.11, respectively.
The decrease may not be as dramatic for all providers, since the vast majority of Medicaid clients in the state receive managed care from health plans. With managed care, plans negotiate contracts and rates with local providers. Those contracts may include unique arrangements with plans, such as higher reimbursement rates for better patient outcomes or preventing hospital readmissions, Lindeblad said.
Still, state officials know the lower rates could affect providers’ willingness to care for Medicaid clients.
“There will be providers that will limit the number of Medicaid clients they see,” Lindeblad said. “That is a concern to us.”
Physicians surveyed
The Health Care Authority contracted with the University of Washington’s Center for Health Workforce Studies to study the impact of the Medicaid payment increase. In a survey of primary care physicians in practices with fewer than 50 physicians, about 74 percent of providers said they would restrict Medicaid access if the rate enhancement ended, according to the December 2014 study. Those restrictions would come either by not accepting Medicaid clients, limiting the number of new clients or no longer seeing current Medicaid patients, according to the study.
Larger health care organizations surveyed did not indicate they would stop seeing Medicaid clients, but one expected to restrict the number of Medicaid clients if rates reverted to previous levels, according to the study.
In May, The Vancouver Clinic announced it would no longer accept new Medicaid clients and would reduce the amount of Medicaid services it provides over the following three years. At the time, The Vancouver Clinic provided primary and speciality care for more than 36,000 Medicaid clients in Clark County.
The low reimbursement rates and a high volume of Medicaid clients put the clinic’s financial stability at risk, clinic officials said.
“Given that Medicaid payments have always been significantly less than our cost of delivering service, we were appreciative of the modest reimbursement increase provided under the ACA,” said Duane Lucas-Roberts, chief executive officer of The Vancouver Clinic. “We did not expect the federal support to continue and, now that the program has expired, it will be even more costly for health care providers to cover the cost of its Medicaid-related care.”
Officials at Columbia United Providers, the Medicaid managed care plan for about 50,000 Clark County residents, are advocating for the enhanced rates — in both the biennial and supplemental budgets.
“Clark County already has one of the lowest Medicaid premiums in the state, and our providers have already bent over backward to make this system work,” said DJ Wilson, a spokesman for Columbia United Providers.
“Medicaid is clearly already underfunded,” he added. “Moving backwards doesn’t help anybody.”
