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As Docs Face Big Cuts in Medicaid Pay, Patients May Pay the Price

Fee reductions average 43% nationwide

Andy Pasternak, a family physician in Reno, Nevada, has seen more than 100 new Medicaid patients this year after the state expanded the insurance program under the Patient Protection and Affordable Care Act (PPACA).

But he won’t be taking any new ones after December 31. That’s when the law’s 2-year pay raise for primary care doctors like him who see Medicaid patients expires, resulting in fee reductions of 43% on average across the country, according to the Urban Institute.

When the temporary pay raise goes away, Pasternak and other Nevada doctors will see their fees drop from $75 on average to less than $50 for routine office visits.

Experts fear other doctors will respond the same way as Pasternak, making it harder for millions of poor Americans to find doctors. The pay raise was intended to entice more physicians to treat patients as the program expanded in many states. In the last year, Medicaid enrollment grew by almost 10 million and now covers more than 68 million people nationwide.

The challenge is to convince physicians not just to continue accepting such patients but to take on more without getting paid what they’re used to, said Dr. J. Mario Molina, CEO of Molina Healthcare, one of the nation’s largest Medicaid insurers.

Most states say they’ve seen no evidence that the increase has resulted in greater doctor participation — mostly because it was temporary. The bonus boosted pay rates for primary care doctors who saw Medicaid patients to the same level as they are paid by Medicare.

Because Medicaid reimbursement rates for doctors vary by state, however, the pay bump varied from no change in Alaska, Montana, and North Dakota, to a 50% raise or more in California, New York, New Jersey, Michigan, Florida, and Rhode Island, according to the Urban Institute.

Only a handful of states have acted to continue the Medicaid pay boost using their own funds, including Maryland, Alabama, Colorado, Iowa, and Mississippi. Connecticut will continue the raise, but not for primary care services done in hospitals. Nevada and several other states are still considering extending it.

The Urban Institute study found that Rhode Island doctors will face the biggest pay drop next year — 67%. Even so, the Rhode Island Medical Society expressed doubt that the change will cause disruption. It pointed out that some large insurers require doctors in the state who want to treat privately insured patients to see their Medicaid members, too.

Experts note that the pay raise was just one way the PPACA tried to ensure that newly covered Americans would have a place to get care. Funding to community health centers was also boosted by $11 billion from 2011 to 2015 to help them expand.

“The Medicaid pay boost was never meant to be a silver bullet,” said Leonardo Cuello, director of health policy at the National Health Law Program, an advocacy group for low-income Americans.

Still, the provider fee cuts have him worried. “It won’t sink the ship but… I’m concerned it will contribute to access problems.”

Source: Kaiser Health News; December 23, 2014.

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