On May 9, 2012, CMS issued a proposed rule that seeks to increase Medicaid payments for certain primary care services. Among other changes, the proposed rule:
- Implements the Affordable Care Act’s requirement that Medicaid reimburse primary care physicians for services CMS designates as “primary care services” at Medicare rates instead of state-established Medicaid rates (which often are lower) in calendar years (CYs) 2013 and 2014;
- Grants states more than $11 billion in federal funds over two years to support their Medicaid primary care delivery systems;
- Applies to primary care services delivered by physicians specializing in family medicine, general internal medicine, or pediatric medicine, and related subspecialists (as recognized by the American Board of Specialties); and
- Provides guidance on identification of eligible primary care services and providers, implementation of increased payments (including payments for services provided through managed care), and payment of vaccine administration fees under the Vaccine for Children program.
The temporary increase in payment for primary care services will be paid entirely by the federal government with no state matching of payment required. In particular, states will receive 100% Federal financial participation for the difference between the Medicaid state plan payment amount as of July 1, 2009, and the Medicare rates in effect in CYs 2013 and 2014 or, if greater, the payment rate that would be applicable using the CY 2009 Medicare conversion factor. According to a press release issued by CMS, the proposed rule “can help improve health and reduce costs by preventing illnesses before they happen and catching small problems before they turn into big ones.” The proposed regulations also note that, "[a]s we move towards CY 2014 and the expansion of Medicaid eligibility, it is critical that a sufficient number of primary care physicians participate in the [Medicaid] program," and these rate increases "will encourage primary care physicians to participate in Medicaid by increasing payment rates."