Enhanced federal Medicaid payments to doctors for primary care services will end in January. The reimbursement increases under the Affordable Care Act sunset next month.
The change could make it harder for doctors to take patients from Medicaid, according to Dr. Paul Harrington, with the Vermont Medical Society. Lower reimbursements could make it difficult for primary doctors who benefited from the enhanced payments to continue offering services to Medicaid patients.
Low Medicaid reimbursement rates also force providers to make up the difference by charging commercial insurers more. Those costs are passed on to consumers through higher premiums and out-of-pocket insurance costs.
Doctors in Vermont received more than $8 million in each of the last two years through the Enhanced Primary Care Program. The funding brought Medicaid reimbursements to family medicine and general internal medicine doctors up to Medicare rates, which are 20 percent higher. Medicaid is the federal government’s program for low-income health coverage. Medicare provides health coverage for the elderly.
Doctors and health care providers practicing at Federally Qualified Health Centers or Rural Health Clinics were not eligible for the program and have not received enhanced payments.
The program coincided with the ACA’s expansion of Medicaid eligibility, which saw Medicaid enrollment increase precipitously. More than 100,000 Vermonters have enrolled in Medicaid through the state’s exchange since Oct. 31, 2013.
In 2013, the only full year of data with the enhanced payments, 1,223 doctors filed claims for 132,404 unique Medicaid beneficiaries through the program. As of Dec. 26, 2014, there were 1,540 doctors eligible for the program who had filed claims for 135,147 Medicaid beneficiaries, according to figures from the state.
In a memo to the Department of Vermont Health Access, Harrington urges the state to continue the higher Medicaid reimbursements. “The proposed 20 percent reduction in payment for primary care services could result in primary care practices having to limit the number of Medicaid beneficiaries they treat in order to meet the costs of operating their practices,” Harrington wrote.
Scott Coriell, the spokesman for Shumlin, said the sunset of the enhance payments “was a known effect of the Affordable Care Act when it was passed.”
“It would be best if Congress didn’t create such short-term and temporary increases…We obviously don’t control the federal government and our efforts to provide consistent and adequate Medicaid reimbursement rates will continue regardless of the federal law,” Coriell added.
At least 15 states plan to keep the Medicaid reimbursement rates at the higher Medicare levels going forward, according to a Kaiser Family Foundation report, but Vermont’s current budget does not include money for that. Unless the state takes action in the upcoming budget adjustment process, the increased payments will end in January. The state could also retroactively increase the payments in the FY 2016 budget.
Vermont would not have to pay the full cost of keeping the higher primary care payments. Every dollar the state puts toward Medicaid draws down $1.17 in federal match money.
Harrington says the Shumlin administration has “repeatedly failed” to meet a statutory obligation that it propose Medicaid budgets that ensure access to care and reimburse at levels equal to Medicare.
Underfunding Medicaid is one of the reasons Gov. Peter Shumlin said a single payer program could not move forward this year. Estimates in a 2013 single payer financing report anticipated $637 million in Medicaid money would be available for the program.
But because Vermont failed to increase the Medicaid reimbursement rates sufficiently, there was $150 million less available for a single payer system.
When Shumlin was re-elected in 2012, he pledged to increase Medicaid rates at 3 percent a year for three years. In FY 2013, his administration increased reimbursements by 3 percent, but in FY 2014 it settled for a 2 percent increase.
In the current fiscal year, the governor proposed a 2 percent increase, but the Legislature reduced that to 1.6 percent. The 1.6 percent increase was rescinded during budget cuts over the summer, saving Vermont $3.1 million. At the same time, the state lost $4 million in federal match.
Shumlin said Tuesday that he would like to increase Medicaid rates going forward in order to reduce the costs shifted onto people with commercial insurance.
But the state’s financial position continues to worsen as revenues fall short of predictions, and the state faces what the governor has described as a structural deficit going into the new year.
Current estimates of the budget deficit for FY 2016 are roughly $100 million. Increasing reimbursements will have to be balanced against other budgetary priorities, Shumlin said.
Harrington Memo:
