State Gets Federal OK to Boost Medicaid Payments

Updated Dec. 4, 2013: 

A year after Texas was slated to increase Medicaid payments to primary care physicians under the Affordable Care Act, the state has received federal approval to implement the change.

Although the ACA required states to increase payments to primary care physicians in 2013, the federal government did not approve the state’s plan to implement the rate increases until recently. Doctors who qualify — either they’re a primary care physician or 60 percent of their Medicaid billings are for primary care services — must fill out a form to notify the state before April 2014 in order to receive retroactive payments for Medicaid services rendered in 2013 that would have been paid at a higher rate. Physicians who complete the form after April 2014 will only received increased payments for services provided after the date they filled out the form.

“Doctors will get the higher rate in quarterly payments with the difference between the higher rate and our regular rate for the services they've provided,” Stephanie Goodman, spokeswoman for the Texas Health and Human Services Commission, explained in an email. “That approach allows us to avoid making system changes to put the higher rate into effect and then reversing those changes at the end of the year.”

Original story, Aug. 13, 2013: 

Under a provision of the Affordable Care Act, payments to primary care doctors under Medicaid — the joint state-federal insurer of children, the disabled and very poor parents — are supposed to rise to the same level as rates for Medicare, the federal health program for the elderly. It's an increase intended to encourage more physicians to take on Medicaid patients.

But the increase, which was set to take effect in January, has been postponed in Texas and several other states because the federal government has not yet approved their strategies for boosting payments, said Stephanie Goodman, a spokeswoman for the Texas Health and Human Services Commission.

The reason? Short turnarounds, missed deadlines and a complex review process. It remains unclear when Texas will get that federal approval and be able to up those payments, leaving many physicians — including some who took on more patients in anticipation of the new rates — in waiting. 

Texas received federal approval in May for its plan to increase Medicaid rates for doctors treating patients under the fee-for-service system, where physicians are reimbursed per treatment provided. But the state has yet to hear back about its plan for managed care rates, which would apply to the majority of Medicaid billings made by primary care doctors in Texas.

“Pretty much everyone today is covered by managed care,” Goodman said. 

A federal health official, who spoke on condition of anonymity because she was not authorized to speak on the record, said the delay is partially the result of Texas submitting its methodology for managed care in late July, nearly three months after the official deadline. 

The Centers for Medicaid and Medicare Services (CMS) are "working quickly to review their waiver request," the official wrote in an email to the Tribune.

Goodman said Texas did not have enough time to submit its methodology before July because CMS didn't release its final regulations for the rate increase process until November 2012. 

Tom Banning, president of the Texas Academy of Family Physicians, said there is no one person to blame for the delay, calling it the result of a series of problems — “the majority unintended, but problems nonetheless.”

But physicians are frustrated. 

“It’s like if you took a job and someone was going to pay you $28 an hour, and you found out two or three paychecks into it [that] all you were going to get was $19 [an hour] for the foreseeable future," said Dr. Stephen Brotherton, president of the Texas Medical Association. "And they promise to fix it, but there’s no start date for that.” 

The state intends to retroactively pay primary care doctors for Medicaid billings made since January when it receives federal approval for its managed care plan, Goodman said. But it's still unclear when that will occur.

Banning said the increase in payments would constitute a “significant bump” for physicians. Currently, he said, Medicaid payment rates are about 72 percent of Medicare payments.

Because of the delay, he said, “we’re not getting more doctors into the [Medicaid] program as we had hoped.”

The number of doctors in Texas who will see new Medicaid patients has dropped sharply over the past decade, Brotherton said, falling from 67 percent a decade ago to 31 percent today. The plan to increase payments to doctors was part of a national effort to encourage more physicians to see Medicaid patients, especially as enrollment is anticipated to increase next year when major components of the Affordable Care Act take effect.

Doctors who added new Medicaid patients because they expected larger payments have struggled financially because of the delay, Brotherton said. “At some point," he said, "you’ve got to pay your gas bill.”

Fabian Levy, a spokesman for the U.S. Department of Health and Human Services, did not respond directly to questions about the delay. He wrote in an email to the Tribune that the agency was "pleased to see states considering innovative, state-based approaches," and that its "goal in working with states has been to be as flexible as possible within the confines of the law." 

This story was produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.