A Bump in the Road to Payment Reform

Martin Ogle , MD, FACEP

Vice President, Operations

Published September 12, 2012

In 2013 and 2014 as part of the Patient Protection and Affordable Care Act (ACA) a “primary care payment bump” will become effective. This is a program where for two years primary care physicians (PCPs) will receive the Medicare level reimbursement for the Medicaid patients they see. This is not a small change, considering Medicaid rates have been estimated to be about 66 cents to the dollar when compared to Medicare primary care rates. In fact, the investment the Feds are making for this program is estimated to be $11 billion and will increase PCP Medicaid reimbursement by 34%.

Physicians eligible for this program are those with a specialty in family medicine, internal medicine, pediatric medicine, and obstetrics. The policy considerations behind this pay bump are consistent with the ACAs goal of expanding the availability of health care. Medicaid expansion is a critical component of how increased care will be provided across the country under the ACA.

The rationale for this payment bump is that some primary care physicians still avoid Medicaid patients because of the lower reimbursement rates and increased bureaucratic steps that arise. The fact that it is only a two year pay bump shows how much importance the Feds are attributing to the Medicaid system functioning right now as the ACA is being implemented, while realizing that this program may not be practical or affordable for the long term . As for the urgency in making sure Medicaid patients do get seen, there are estimates that the ACA could add 23 million new patients to the Medicaid system. After two years it is hoped that primary care physicians will become more comfortable taking Medicaid patients, and will continue doing so when the bump is ended after 2014. Another objective of this incentive is to facilitate access by Medicaid patients to primary care physicians, so that the patients will be less likely to develop acute conditions and depend on the ED for their primary care. This, in turn, should reduce the increasing traffic in the ED.

Any policy that gets needed medical treatments to more patients and reduces traffic in the ED will be helpful. But I am concerned about how this payment bump will affect incentives in different types of medical facilities across the country. For example, in an urban area, an ED doc will receive the Medicaid level of reimbursement, while in a rural part of the country where an ED does not exist and a PCP provides emergency care, that physician receives the higher Medicare reimbursement, for providing the same service. The irony here is that the physician who is Board Certified in emergency services receives less money for performing emergency services than the PCP.

Ideally, it would be most effective to expand the payment bump to include other specialties, including preventative care. It is a positive change to give PCPs a higher incentive to see Medicaid patients and alleviate the increased burden on the healthcare system. If this payment bump succeeds in building a stronger relationship between PCP and Medicaid patients, then all physician specialties will benefit, and CMS would have made what could be considered a successful venture capitalist investment. But creating a disincentive for doctors to practice in the ED could create a butterfly effect throughout the healthcare system, with the unintended result of reducing staffing levels in EDs for years to come. So yes, increase payments to PCPs. But include other specialties in this largesse.

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