Could Medicaid Fee Reimbursement Drop Significantly in 2015?
A new study found that a Medicaid fee reimbursement drop of between 40 and 50 percent could happen starting in 2015.
- For any hospital or practitioner, knowing the fees that are associated with health insurance, Medicare and Medicaid is critical to success. There are any number of regulations, incentives and upcoming pieces of legislation that can alter the reimbursement numbers and impact previously steady revenue numbers.
Part of the Affordable Care Act (ACA) is designed to increase access to health insurance coverage through the expansion of eligibility for states’ Medicaid programs. This expansion has happened in 27 states and the District of Columbia, allowing more than 7.5 million Medicaid enrollees since the third quarter of 2013. However, low physician reimbursement of Medicaid patients has been a concern and has caused some physicians to question whether dealing with the service is worth it.
To counteract this concern, the ACA increased Medicaid fees for primary care services to Medicare levels for a two-year period. This “fee bump” is fully funded by the government but will end on December 31, 2014.
This raises the question, what will happen to physicians and patients when the fee bump ends?
According to a study by the Urban Institute, if no extension of the ACA primary care fee is granted, the estimated fee reduction will average 40 percent nationwide. In states like California, New York, New Jersey and Illinois, which have more primary doctors, the increase could be as high as 50 percent. It was also discovered that Medicaid expansion states (46.2 percent) will face a more substantial fee reduction that non expansion states (36.8 percent).
The fee cut is also going to be different for states that do not plan to extend the fee bump using state funds.
“To put the magnitude of these fee reductions in some context, consider that the projected Medicare fee reduction under the sustainable growth rate formula was 24 percent in 2014. That cut and every potential fee cut under the formula since 2003 has been delayed by Congress,” the report reads. “It has been uncertain whether congressional action related to continuing the Medicaid primary care fee bump would occur before the policy expires, and time appears to be running out.”
The report continues to say that states that have seen the largest increases in Medicaid reimbursement are less likely to be planning to extend the policy using state funds, most likely because of budgetary concerns. Without the bump, a domino effect could happen as physicians decide to see fewer Medicaid patients. This, in turn, will make it more difficult for these individuals to find care or make an appointment once they do because of increased patronage to those practices.
While reimbursement is not the only factor to whether physicians accept Medicaid, there is a correlation between lower payment rates and fewer physicians accepting new Medicaid patients.
