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Medicaid Pay Bump Expires, Worsens Health Care Landscape for Low-Income Patients

Many primary care doctors who see Medicaid patients this year will get a fee cut averaging nearly 43 percent, a drop that could threaten access to care for low-income Americans and the success of one of the Affordable Care Act’s key features.

Many primary care doctors who see Medicaid patients this year will get a fee cut averaging nearly 43 percent, a drop that could threaten access to care for low-income Americans and the success of one of the Affordable Care Act’s key features. Shutterstock

Many primary care doctors who see Medicaid patients this year will get a fee cut averaging nearly 43 percent, a drop that could threaten access to care for low-income Americans and the success of one of the Affordable Care Act’s key features.

The Affordable Care Act, which has led to lower rates of uninsured U.S. residents over the past two years, expanded Medicaid by instituting changes to the public insurance’s eligibility criteria that are by now well knownfor example, removing the federal ban on childless adults from the program and raising the annual income level over which people no longer qualify.

A lesser-known feature of Medicaid’s expansion, however, was a move to boost primary physicians’ participation in the program: an increase in the monetary reimbursement to primary care physicians for services to patients with Medicaid, to grow the number of providers as the volume of Medicaid enrollees soared.

After all, putting millions of people on health insurance rolls isn’t much good if there are no doctors to treat them.

The change, called the “Medicaid fee bump,” was meant to incentivize physicians to serve Medicaid patients, and used $5.6 billion in federal funds to increase Medicaid reimbursement rates to the more competitive fee schedule offered by Medicare.

The fee bump was only temporary; after two years of increased rates, it expired at the end of 2014. Physician reimbursement is now set to drop in most states, and up to 50 percent in at least seven states, according to a study by the Urban Institute. The magnitude of the drop in reimbursement will depend largely on the original extent of the gap between Medicare and Medicaid rates before the Affordable Care Act bump.

In California, for example, a state with one of the lowest Medicaid reimbursement rates, doctors’ fees are expected to drop by about 59 percent. Last spring, Medicare reimbursed doctors $45.69 for a basic office visit for returning patients, compared with the $18.10 reimbursed by Medicaid for the same service, according to the Los Angeles Times.

The state has added 2.7 million people to its Medicaid rolls since the Affordable Care Act launched in 2013.

“You’re expanding the number of people in a program while making cuts that make it hard to serve those people,” Molly Weedn, a spokeswoman for the California Medical Association, told the Times.

Rhode Island’s doctors will face the largest cut, a 67.3 percent decrease in fees, according to the Urban Institute.

Unclear is how exactly the drop in fees will affect physician participation in Medicaid expansion, in part because it’s not obvious whether the fee bump adequately incentivized participation in the first place, according to medical professionals.

Because doctors knew that the increased reimbursement rates would end in 2015, it’s possible they avoided taking on new Medicaid patients altogether.

“Unfortunately, with only a two-year period in which outcomes can be consideredcombined with delays in the implementation process—it is difficult to judge how much of an impact the parity payments made on access,” Reid Blackwelder, board chair of the American Academy of Family Physicians, said in a statement. “Physicians were asked to expand access to their practices while facing the stark reality that they might have to either accept reduced payments for treating those patients or turn their backs on those new patients after a relatively short time.”

The sharp drop in pay rates can only compound an already sparse landscape for low-income patients seeking doctors.

A report by the University of California, San Francisco, found that in California there are only 25 to 49 primary care doctors participating in Medicaid per 100,000 enrollees, far short of the 60 to 80 range estimated as sufficient by the federal government.

And a study by the U.S. Department of Health and Human Services (DHHS) examining Medicaid managed care providers found that more than half couldn’t offer appointments to new enrollees. The DHHS study also found that 35 percent of Medicaid providers could not be found at the address listed for them by Medicaid, and that 10 percent of patients had appointment wait times longer than two months.

Meanwhile, thousands of Medicaid applications have been backlogged across the country as states struggle to meet the inundation of people seeking to enroll. Many deemed eligible have had to wait for months for their application to process, leaving people unsure of their insurance status.

Only 14 states have opted to use their own money to continue the bump, given the lack of monetary support from the federal government. Some are still undecided, but 23 states will not continue the fee increase.

Sen. Sherrod Brown (D-OH) introduced a bill last year that would have not only continued the fee bump for Medicaid primary care providers, but also would expand it to other providers such as OB-GYNs, nurse practitioners, physician assistants, and certified nurse-midwives. The bill died in committee.