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Medicaid primary care pay at risk in lame-duck talks

GOP negotiators floated the idea of rescinding a two-year Medicaid primary care rate boost to help fund a Medicare pay freeze for all doctors.

By Jennifer Lubell — Posted Dec. 12, 2012

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Organized medicine reacted with strong opposition to indications that Congress might eliminate a temporary Medicaid pay increase to primary care physicians as lawmakers deliberate in year-end negotiations on outstanding fiscal issues.

In a series of letters to House and Senate leaders on Dec. 5, more than 250 physician associations and state medical societies urged lawmakers to oppose any proposals to eliminate the Affordable Care Act provision that boosts Medicaid primary care rates to Medicare levels in 2013 and 2014. Doing away with the primary care parity policy “further burdens the already challenged Medicaid system of today,” the physician organizations wrote.

The letters don’t specify the rationale behind the possible elimination of the pay bump. But some of the signatories said Republican lawmakers were eyeing the move as a way to help pay for preventing a 26.5% Medicare doctor pay cut under the sustainable growth rate formula, or as a general offset for avoiding elements of the so-called fiscal cliff. Without action from Congress before 2013, major tax cuts will expire and deep federal spending reductions will kick in under a budget control law adopted in 2011.

“We’ve heard that there have been multiple proposals to pay for the SGR at least in part by eliminating Medicaid pay increases,” said Robert Doherty, senior vice president for governmental affairs and public policy at the American College of Physicians. The two-year Medicaid pay increase would cost about $11 billion to implement, so undoing it would free up just under half of what the Congressional Budget Office estimates it would cost to freeze 2013 Medicare rates at 2012 levels. The letters emphasize “that we’re not at all open to using it to pay for SGR or any other offsets to pay for the fiscal cliff,” Doherty said.

The Medicaid pay boost is vital, because low rates for primary care make it difficult to recruit and retain physicians in rural areas, said Robert Allison, MD, president of the South Dakota State Medical Assn. “About one in seven South Dakotans are eligible for Medicaid and count on it for primary care services,” he said.

Most doctors want to serve Medicaid patients, even at a financial loss, said Tom Holloway, executive vice president of the Missouri State Medical Assn. “But the economic reality is that in the absence of reasonable reimbursement for those services, many physicians find they have no choice but to limit their Medicaid patient load.”

Elimination of the Medicaid pay bump isn’t the only possible offset for a Medicare doctor pay patch that is prompting opposition. In a separate letter to Congress, the American Hospital Assn. called on lawmakers to steer clear of possible cuts in hospital payments, including rate reductions for evaluation and management services provided in hospital outpatient departments.

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