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Health Policy Brief
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Medicaid Primary Care Parity. For 2013
and 2014, the federal government raised
payment rates to Medicaid primary care
providers. Only some states plan to
extend the rate increase.
what’s the issue?
Section 1202 of the Affordable Care Act (ACA)
required states to raise Medicaid primary care
payment rates to Medicare levels in 2013 and
2014, with the federal government paying 100
percent of the increase. This provision—often
referred to as “Medicaid primary care parity”
or the “Medicaid primary care fee bump”—was
intended to encourage primary care physicians to participate in Medicaid, particularly
in the face of an expected increase in enrollment as a result of the ACA’s expansion of the
program.
Federal lawmakers failed to reauthorize the
fee bump during the 113th Congress, ending
in December 2014. As a result, states must
decide whether to revert to previous primary
care payment levels or continue at a higher
level but without the benefit of the enhanced
federal match. As of January 1, 2015, sixteen
states and the District of Columbia had decided to continue paying enhanced rates, while
thirty-four states had declined.
©2015 Project HOPE–
The People-to-People
Health Foundation Inc.
10.1377/hpb2015.5
Although the program is over, the debate
about whether it worked—and should, therefore, be reinstated in some form—continues.
Evaluators have been challenged by the pro-
gram’s later-than-planned start and short
duration, which many believe made it impossible to detect program impacts. Another
challenge to measuring the program’s impact
is that it was intended to improve access to
care—a variable that is difficult to measure
directly. Evaluators’ focus has been primarily
on provider participation, which may be an
incomplete proxy for access. Finally, program
evaluation is hampered by the difficulty of
isolating the impact of the payment increase
from the impact of hundreds of other changes
made in both public and private insurance and
delivery systems under the ACA.
This policy brief describes the Medicaid
primary care fee bump, the rationale for the
program, and the details of its rollout. Next,
the brief explores evidence of the program’s
impact, outlines stakeholders’ views on both
sides of the debate, and concludes with some
thoughts about how the program could be improved or modified in the future, if it is to be
continued at the national or state levels.
what’s the background?
The Medicaid primary care fee bump was intended to encourage primary care providers
to participate in Medicaid. Primary care ac-
h e a lt h p o l ic y b r i e f
“The program’s
goal was to
ensure access
to primary care
for Medicaid
recipients by
increasing
provider
participation.”
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m e dic a i d p r i m a r y c a r e pa r i t y
cess problems—long considered a challenge
in Medicaid—may be exacerbated by Medicaid expansion. Prior to the ACA’s coverage
expansions, average monthly Medicaid and
Children’s Health Insurance Program (CHIP)
enrollment was nearly fifty-eight million. In
April 2014 the Congressional Budget Office
projected that an additional seven million
people would gain coverage through Medicaid
and CHIP in 2014, increasing to eleven million
in 2015, and holding steady at twelve to thirteen million from 2016 to 2024.
Low Medicaid payment rates are often cited
as a reason for low provider participation and,
consequently, reduced access to care for beneficiaries. However, research has not firmly
established a positive correlation between
Medicaid payment rates and access. For example, a 2005 study found that higher payments were correlated with some measures
of patient access (the probability of having a
usual source of care, the probability of adults’
having at least one visit to a doctor, and positive assessments of the health care received
by adults and children), but not with others
(the probability of receiving preventive care
or the probability of having unmet needs). In
contrast, in a 2012 study published in Health
Affairs, researchers found that a 10-percentage-point increase in the ratio of Medicaid to
Medicare fees correlated with a 4-percentagepoint increase in acceptance of new Medicaid
patients. The June 2013 Report to Congress
from the Medicaid and CHIP Payment and Access Commission (MACPAC) provides a succinct summary of this literature.
Despite the lack of consistent research findings supporting a link between Medicaid
payment and patients’ access to care, many
stakeholders believe that payment must be an
important lever in improving access. In 2012
Medicaid primary care fee-for-service (FFS)
payment rates averaged 59 percent of Medicare fee levels for the same services, across all
states. The Medicaid/Medicare primary care
fee ratio varied widely by state, with some
state Medicaid programs (California, Florida,
Michigan, New York, and Rhode Island) paying less than 50 percent of Medicare fees, and
another thirty states paying no more than 75
percent. (It is important to note, however, that
in several of the states with very low FFS rates
for primary care, the majority of beneficiaries
are actually enrolled in Medicaid managed
care, for which primary care payment rate
data were not available.)
what’s the policy?
Providers eligible for the increased payment
included those who self-attested to a specialty
or subspecialty designation of family medicine, general internal medicine, or pediatric
medicine. Providers self-attested to this designation based on board certification or if they
could show that 60 percent of all Medicaid
services they billed were for the procedure
codes to which the fee bump applied. Nurse
practitioners and physician assistants working in primary care were eligible if working
under the supervision of an eligible physician.
The ACA specified 146 health care services to
which the fee bump applied. These included
evaluation and management services with
procedure codes 99201–499 and vaccine administration services for children with procedure codes 90460–1 or 90471–4.
The size of the increase in payment varied
by state, as some states’ Medicaid primary care
FFS rates were closer than others’ to Medicare
parity before the law’s passage. The fee bump
was effective January 1, 2013. However, the
Centers for Medicare and Medicaid Services
(CMS) did not release a final rule on program
implementation until November 2012, causing states to make some of their 2013 parity
payments retroactively.
The primary care fee bump applied to both
FFS Medicaid and Medicaid managed care.
While increasing a FFS payment rate is typically straightforward, increasing a capitation
payment (a uniform amount paid to the managed care company for each patient, no matter
how many services they use) can be challenging because the payments may cover not
only primary care but a wide range of other
services. Technical difficulty in setting and
administering enhanced capitation rates contributed to delays in program implementation.
Researchers from the Center for Health Care
Strategies conducted extensive stakeholder
interviews about the fee bump, reporting that
establishment of the managed care rates required “lengthy preparation and ramp-up periods, as well as drawn-out negotiations with
[CMS].” In fact, the researchers reported that
primary care providers working in states that
contract with Medicaid managed care plans
had a much less positive view of the fee bump
than did FFS providers, likely because of the
significant delay in implementation.
Another factor contributing to late and slow
program implementation was the requirement
h e a lt h p o l ic y b r i e f
16
states
and D.C.
As of January 1, 2015, sixteen
states and the District of
Columbia had decided to continue
paying enhanced rates, while
thirty-four states had declined.
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m e dic a i d p r i m a r y c a r e pa r i t y
that providers must self-attest to program eligibility. States had to develop and administer
the self-attestation process, delaying them in
reaching out to providers with information
about the new program. Some stakeholders
felt that when outreach did occur, it was limited only to those physicians already accepting Medicaid. Others believed that outreach
to physicians and other providers was too
limited in general, resulting in providers’ not
knowing how to self-attest or not being aware
that they were required to do so.
Despite delays in program implementation,
the federal government had paid out $7.1 billion under the program through September
30, 2014. States have up to two years to submit claims for federal reimbursement, and
total spending is expected to reach about $12
billion in total.
To continue Medicaid primary care parity,
Congress would have had to reauthorize the
program by December 2014. It did not. An
October 2014 survey from the Kaiser Family Foundation found that if Congress did
not act, fifteen states planned to take up the
slack, continuing to pay increased primary
care fees using a combination of state and federal funds. (The latter will be provided at the
state’s customary Medicaid federal matching
rate, which, in all cases, is far lower than the
100 percent “match” available under the expired fee bump program.) At that time, twenty-one states and the District of Columbia said
exhibit 1
State Decisions On Medicaid Pay Bump, As Of January 1, 2015
Will not continue
Will continue
source Janet Weiner, Simon Basseyn, and Chris Colameco, Bumped-Up Medicaid Fees for Primary Care
Linked to Improved Appointment Availability (Philadelphia, PA: University of Pennsylvania, Leonard Davis
Institute of Health Economics, January 21, 2015).
that they would not continue to pay the higher
rates, and fourteen states were undecided.
In December 2014 the Urban Institute estimated that if none of the forty-nine states it
studied nor the District of Columbia elected to
continue the fee bump on its own, the demise
of the program would result in an average 42.8
percent reduction in primary care fees for
Medicaid providers. (Tennessee was excluded from the study because it does not have a
FFS component to its Medicaid program.) The
predicted reduction would vary widely by state
because—as noted—some states’ primary care
fees were already much closer to Medicare
rates than were others’ before the program
started. The researchers segmented states
into three categories: those that (as of October 2014) had indicated they did not plan to
continue the increase with state funds; those
that did intend to do so; and those that were
still undecided. Not surprisingly, the states
intending not to continue with the increased
fees were those that had received the greatest
federal bump under the program and were,
therefore, facing the largest hole to be filled
in with state dollars.
In January 2015 researchers from the Urban
Institute and the University of Pennsylvania
contacted the states that had previously reported being undecided about continuing the
fee bump. Of those, only one (Montana) had
moved into the “continue” column, bringing
the total number of continuing states to sixteen, plus the District of Columbia—which had
reversed its earlier decision not to continue
(see Exhibit 1). The rest had decided to decline, bringing the total number of declining
states to thirty-four.
what’s the debate?
The Medicaid primary care parity program
has ended, but the debate about its effectiveness—and whether it should be replicated in
some form in the future—continues. Again,
the program’s goal was to ensure access to primary care for Medicaid recipients by increasing provider participation. If the program
achieved that goal (which is, as yet, unknown),
we may see a reduction in primary care provider participation and a concomitant reduction
in beneficiary access, which may, ultimately,
lead to worse health outcomes. On the other
hand, some stakeholders have argued that
instead of increasing primary care provider
participation, the program mostly benefited
providers who were already participating, and
h e a lt h p o l ic y b r i e f
it’s not clear that this is an effective route to
improving access.
“In some cases,
states would
like to continue
the program but
simply do not
have enough
resources to do
so.”
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m e dic a i d p r i m a r y c a r e pa r i t y
It may ultimately be possible to settle these
questions empirically, and research is underway. Efforts to identify the program’s impacts
are hampered by the fact that it was in place
for such a short period of time and was implemented in different ways and at different
times across states. Despite these challenges,
however, a few researchers have begun to publish results. Some have attempted to measure
patient access directly, while others have used
provider participation as a proxy for access.
Review of Evidence
In a February 2015 evaluation of the fee
bump, researchers from the Urban Institute
and the University of Pennsylvania’s Leonard
Davis Institute of Health Economics conducted a “secret shopper” study in ten states to see
whether access to primary care had improved.
“Access” was defined as “appointment availability for Medicaid enrollees seeking newpatient primary care appointments at physician offices that participated in Medicaid.” The
availability of primary care appointments in
the Medicaid group increased by 7.7 percentage points after the fee bump was implemented, while there was no increase in availability
for the privately insured patients. The larger
the fee bump in a given state, the larger the increase in Medicaid primary care appointment
availability. Every 10 percent increase in reimbursement rates led to an increase in appointment availability of 1.25 percentage points.
(Notably, all ten states in the study mandate
managed care for adult Medicaid enrollees, so
it may not be possible to extrapolate these findings to FFS Medicaid environments.)
This study suggests that the fee bump did
improve access, but it did so by increasing the
capacity of primary care providers already
participating in Medicaid. Of necessity—because the researchers compared appointment
availability pre– and post–fee bump—they
limited their analysis to practices that participated in Medicaid both before and after the
fee increase. They were, therefore, unable to
draw conclusions about whether the program
brought new providers into Medicaid.
Other research on the program’s effectiveness has been more qualitative, with findings
based on stakeholder interviews. MACPAC
conducted a series of semistructured interviews with Medicaid officials, plan administrators, and provider organizations in eight
states. In its March 2015 Report to Congress,
MACPAC noted that few physicians completing the attestation to participate in the program were new to Medicaid. In the states
MACPAC studied, “the payment increase had
little to no effect on Medicaid provider participation rates.” In addition, interviewees in
six of the eight states reported no change in
primary care service use after the program’s
implementation.
Researchers from the Center for Health
Care Strategies also conducted interviews
with policy experts and staff from selected
state Medicaid programs, health plans, and
provider organizations, asking (among other
things) whether those states had seen an increase in provider participation. The results
were mixed, and the researchers did not draw
any conclusions. However, they did note that
provider participation is problematic as a
measure of the program’s success. There simply has not been enough time to study the
program’s impact on provider enrollment
trends, and any observed increase in provider
participation—such as those reported in Ohio
and Connecticut—could be as a result of factors other than the fee bump.
The Office of the Assistant Secretary for
Planning and Evaluation within the Department of Health and Human Services has
contracted with the RAND Corporation to
conduct an evaluation of the fee bump program. The researchers will use office visit
claims data from Medicaid and other payers
to analyze the program’s impact on providers’
patient mix—arguably a better measure of access than is provider participation.
Advocates on Both Sides
While evidence of the program’s impact,
or lack of impact, on access is limited, there
are nevertheless advocates on both sides of
the debate. Many of those in favor of continuing increased primary care rates believe that
the program’s demise will inevitably lead to
reduced access for Medicaid beneficiaries.
Some say that the two-year time frame of the
program was too short to determine whether
the policy worked, and more time is needed.
Prominent physicians groups, including the
American Academy of Family Physicians and
the American College of Physicians, have been
vocal in their support of the program. These
groups contend that even if the program did
not bring new physicians into Medicaid, it
allowed existing Medicaid primary care pro-
h e a lt h p o l ic y b r i e f
viders to maintain their previous levels of participation, which were unsustainable under
the old rate structure. In an April 2014 survey
of members of the American College of Physicians, 40 percent said they would accept fewer
Medicaid patients in 2015 if the fee bump expired, and 6 percent said they would stop participating in Medicaid altogether.
12 billion
$
Total federal spending for the fee
bump is expected to reach about
$12 billion in total.
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m e dic a i d p r i m a r y c a r e pa r i t y
In addition, according to MACPAC, some
of the states continuing the fee bump said
they were doing so—despite not being able to
quantify its impact—because they felt there
were other benefits, such as improving relationships and generating goodwill between
providers and the Medicaid agency. A state’s
decision not to continue the fee bump does
not necessarily signal lack of confidence in
the program’s ability to achieve important
benefits. Instead, in some cases, states would
like to continue the program but simply do
not have enough resources to do so, or must
consider cuts in other programs to finance the
increased fees.
Stakeholders who see the expiration of the
fee bump in a more neutral light seem to fall
into two camps (and some are in both): Those
who believe the program was poorly designed
to achieve its goal, and a better solution may
be available; and, those who do not believe
that the payment and access problems are
as severe as reported, especially in Medicaid managed care (as opposed to FFS). One
prominent expert on the side of allowing the
fee bump to expire was Matt Salo, president
of the National Association of Medicaid Directors. Salo told Health Leaders Media that
“many states believe the Medicaid parity law
was poorly designed, had little effect on care
delivery while it was operating, and won’t be
missed after it’s gone.” Salo also contends that
in most states, the vast majority of Medicaid
primary care is delivered under managed care
programs, where, he says, “the docs are [already] getting paid a lot better.”
While not necessarily taking a position
on the fee bump either way, the Kaiser Commission on Medicaid and the Uninsured
published data suggesting that the Medicaid
access problem may not be as severe as many
believe. The commission’s Julia Paradise noted in an interview last year that “while primary care physicians participate less in Medicaid
than in private insurance, most primary care
physicians do accept new Medicaid patients.
Surveys indicate that a small minority of Medicaid beneficiaries have difficulty finding a
general doctor or provider, and core measures
of access to primary care are comparable between Medicaid and private insurance among
both children and adults.”
what’s next?
At the January 2015 MACPAC meeting, the
commissioners discussed the program’s impact and whether or not they would continue
to track it. At the moment, it does not appear
that Congress will take up the issue of increasing Medicaid primary care fees in the near future. In the meantime, as noted, sixteen states
and the District of Columbia will continue the
fee increase, while thirty-four states will not.
Commission chairperson Diane Rowland says
that this situation provides a “natural experiment”—an opportunity to determine more
definitively the impact of increasing Medicaid primary care fees. Other commissioners
concurred. The general tenor of the discussion
was that increasing provider participation is
complex, and fees are only one piece of the
puzzle.
Several commissioners noted that changes
in the way providers are organized may also
have an important impact on Medicaid participation, specifically calling out declining
rates of independent practice and the accelerated formation of accountable care organizations. Along similar lines, researchers at the
Center for Health Care Strategies have noted
the shortcomings of designing the program
around a FFS model. With so many public
and private payers adopting value-based payment models, the fee bump program was tied
to an old pay-for-volume paradigm that many
believe is outdated. A more forward-thinking
program would allow states to use enhanced
federal funding for primary care to reward
practice and quality improvement.
With sixteen states and the District of Columbia continuing to pay enhanced fees, there
will likely be important variations among
those programs’ goals and features, providing
another natural experiment around the most
effective use of payment as a lever to improve
access to primary care in Medicaid. n
h e a lt h p o l ic y b r i e f
About Health Policy Briefs
Written by
Laura Tollen
Consulting Editor
Health Affairs
Editorial review by
Benjamin Finder
Senior Analyst
MACPAC
Tricia McGinnis
Vice President, Program, and
Director, Delivery System Reform
Center for Health Care Strategies
Rob Lott
Deputy Editor
Health Affairs
Tracy Gnadinger
Assistant Editor
Health Affairs
Health Policy Briefs are produced under
a partnership of Health Affairs and the
Robert Wood Johnson Foundation.
Cite as:
“Health Policy Brief: Medicaid Primary
Care Parity,” Health Affairs, updated
May 15, 2015.
Sign up for free policy briefs at:
www.healthaffairs.org/
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m e dic a i d p r i m a r y c a r e pa r i t y
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resources
American Academy of Family Physicians, MedicaidMedicare Parity (Leawood, KS: AAFP, 2015).
Maia Crawford and Tricia McGinnis, Medicaid Primary Care Rate Increase: Considerations Beyond 2014
(Hamilton, NJ: Center for Health Care Strategies,
September 2014).
Department of Health and Human Services, “Medicaid Program; Payments for Services Furnished
by Certain Primary Care Physicians and Charges
for Vaccine Administration Under the Vaccines for
Children Program; Final Rule,” Federal Register 77,
no. 215 (2012): 66670–1.
Medicaid and CHIP Payment and Access Commission, Report to Congress on Medicaid and CHIP: Chapter 8: An Update on the Medicaid Primary Care Payment
Increase (Washington, DC: MACPAC, March 2015).
Julia Paradise, Medicaid Moving Forward (Washington, DC: Kaiser Commission on Medicaid and the
Uninsured, March 2015).
Daniel Polsky, Michael Richards, Simon Basseyn,
Douglas Wissoker, Genevieve M. Kenney, Stephen
Zuckerman, and Karin V. Rhodes, “Appointment
Availability after Increases in Medicaid Payments
for Primary Care,” New England Journal of Medicine
372, no. 6 (2015): 537–45.