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Plan to Raise Medicaid Payments to Medicare Level Moves Ahead, but at Snail's Pace

New rules intended to create parity between Medicare and Medicaid payments to physicians are rolling out more slowly than expected, hampered by delays at the state level.

For two years -- 2013 and 2014 -- the federal government will make up the difference between federally established Medicare rates for primary care services and state-decreed Medicaid rates, which tend pay less for the same services. But the rules require that states amend their Medicaid plans to include the parity program and then submit those amendments for approval to the Centers for Medicare and Medicaid Services, said Neil Kirschner, senior associate for regulatory and insurer affairs for the American College of Physicians.

Many states still have not turned in these plan changes for federal approval, even though they are due by the end of March, Kirschner said.

"Our concern is that a number of states still haven't gotten their state plan changes in to CMS, and then CMS has up to 90 days to approve them," he said. "The money doesn't flow until the state plan is approved. It may be a while before providers in some states get this parity funding." The increase, however, will be retroactive to Jan. 1, 2013, Kirschner said.

ACP also is concerned that some physicians might neglect an important step in qualifying for the parity payments.

Under the federal rules, physicians must "attest" to the states that they meet the necessary requirements to receive Medicaid pay parity, Kirschner said. This generally means that physicians must show that they're either providing primary care or are part of a specialty or subspecialty that provides primary care services. ACP had advocated for extending parity to primary care services delivered by internal medicine subspecialists.

"Each state is different as to the attestation period, and the time period they are giving physicians to attest varies," he said. "If a physician doesn't attest in time, they don't get paid."

Physicians can avoid this by proactively reaching out to state officials, Kirschner said.

"We are encouraging our members to call up their state Medicaid office and find out what the attestation process is, when it begins and what they need to do," he said.

The delayed rollout in the parity program also could affect the data that health care experts hope to glean from the program, Kirschner said.

The new pay parity rules are intended to promote physicians' participation in Medicaid, which is expected to cover up to half of the roughly 30 million people newly added to the insurance rolls under the Affordable Care Act. Though the federal parity payments last only two years, some studies have argued that states will still save money on health care costs if they maintain parity after the incentive ends, Kirschner said. That's because patients are expected to receive more preventive care, leading to a reduction in emergency care costs.

This program could prove that assertion right or wrong, but only if there's time to garner enough data.

"The thought is that there are savings for the states for paying more to doctors for Medicaid, but if it doesn't happen in time there won't be data to assess its effectiveness," Kirschner said.

The federal program will fully fund the parity payments to the states, but only back to the beginning of the quarter in which the state filed the changes in its Medicaid plan, Kirschner said. That means that states intending to file a plan by March 31 will be fully covered by federal funds for the parity payments. However, states that drag their feet and file between April 1 and June 30 will receive parity payments only back to the beginning of April, he said, and would be obligated to fund the first three months of program.

It remains unclear whether the parity payments will be affected by sequestration.

"If you read the law, it doesn't seem like it would, but I'm just not sure," Kirschner said. "When you talk to CMS, they're trying to figure it out, too."

More information

The website of the National Association of Medicaid Directors has information on how to contact your state Medicaid director.

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March 21, 2013
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