Health Reform’s Medicaid Expansion, Payment Increase Causes Mixed Feelings For MDs

While doctors are worrying a lot about whether Congress will block the 21 percent scheduled cut in Medicare payments, a fix to another public health program is raising another question.

To ease the worries of already-strained primary care doctors, the new health law includes an increase in Medicaid payment rates, bringing them up to the same level as those from Medicare. That bump is is expected to be pretty helpful when a huge chunk of the increase in insurance coverage under the law comes from expanding Medicaid, the federal-state program for low-income Americans, to cover 16 million more people, including people with incomes up to 133 percent of the federal poverty line, or about $14,404 for an individual and $29,326.50 for a family of four. The expansion will include childless adults, most of whom were not previously eligible.

The problem? Under the new law, the Medicaid raise may only last two years.

Currently,¬†primary care doctors in Florida who treat a patient on Medicaid would have a hard time making money on the service. In fact, they’re getting paid about half what they do for Medicare patients. “My overhead is 60 percent. If I see a Medicaid patient, that’s like I am taking a $10 bill out of my wallet and handing it to them to see them,” said Dennis Saver, a family practice doctor in the Sunshine State.

Saver expects to make some profit under the new law on the 50 Medicaid patients he sees regularly in his private practice. He says the increase won’t make treating them “handsomely profitable,” but “it would make it reasonable.”

The higher Medicaid payments would take effect in 2013 and would be funded entirely by the federal government. But the bill doesn’t mention what happens after 2014.

Some primary care doctors have voiced concerns about the law. But Lori Heim, president of the American Association of Family Physicians, says that while the law doesn’t solve every problem, it is a step in the right direction. “For folks that right now are getting charity care — if they become eligible for Medicaid then at least the doctor will then be receiving something instead of nothing,” she said.

In states like Texas, for example, where doctors currently receive about 33 percent less to treat a Medicaid patient than a Medicare patient, a jump in payment by one-third would be a big deal, says Stephen Zuckerman, a health economist at the Urban Institute. “It would be hard to visualize if that happens and providers begin to accept Medicaid patients that you’re going to then see in 2015 a 33% cut in those fees — but that is clearly what would happen if you read the legislation literally.”

Permanently raising the pay rate could help solve another looming problem: the shortage of primary care physicians.

Some doctors are also concerned that the increased reimbursements will be offered just to primary care doctors–and not specialists. “Even if you pay me more, that doesn’t build the network I need,” said Marc Siegel a practicing internist in New York who recently wrote an op-ed on the issue in USA Today. Siegel also says a payment increase might not even cover the cost of doing all the paperwork that comes along with Medicaid reimbursements. “Let’s say I’m getting paid $30 now taking care of a Medicaid patient, maybe later I’ll get $45, but I’ll do 1.5 hours more administrative tasks, is that worth it?”

Nonetheless, experts like Zuckerman are boosting the effort, noting that the expansion of Medicaid has the opportunity to change the whole stigma of government-funded insurance. “As Medicaid eligibility moves up, you’re going to find broader geographic distribution of Medicaid patients, which will lead to shifts in the type of providers that Medicaid patients go to ¬Ö I definitely feel that it’s a movement in the direction of getting Medicaid to become a more mainstream part of the health care system,” he said.

But the payment increase could still end in 2014, which is why Heim and the AAFP are already working toward an extension to avoid another situation like the never-ending Medicare payment doc fix.

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