Some hospitalist groups can expect a bump in total revenue over the next two years, thanks to the Medicaid-to-Medicare parity regulation that was included in the Affordable Care Act. But whether the increase in reimbursement lasts beyond 2014 is anyone’s guess.
The regulation, which the Centers for Medicare & Medicaid Services (CMS) released in November and made effective Jan. 1, increases Medicaid payments for certain primary-care services to 100% of Medicare levels this year and next. States will receive an estimated $11 billion over the next two years to fund the program, according to the American Academy of Family Physicians (AAFP). Eligible providers include physicians, physician assistants (PAs), and nurse practitioners (NPs), who self-attest they are board-certified in family, pediatric, or general internal medicine; it also includes those doctors, PAs, or NPs who self-attest that at least 60% of all Medicaid services they bill or provide in a managed-care environment are for specific evaluation and management (E&M) and vaccine administration codes.1
The concept is to boost Medicaid participation by improving historically lagging reimbursement rates.2 To wit, CMS’ Office of the Actuary estimates the parity rule will add more than 10,000 new primary-care physicians (PCPs) to the Medicaid participation ranks.3
SHM Public Policy Committee member Brad Flansbaum, DO, MPH, SFHM, says that hospitalists who deal with Medicaid populations can expect at least some increase in their revenue over the next two years. For example, he says, take an HM group earning $100,000 a year in Medicaid revenue. Now consider Urban Institute figures that show, in 2012, Medicaid physician fees on average were 66% of Medicare physician fees (with wide state variations). The parity rule now pays that hypothetical HM group about $150,000.
“It’s simple math,” Dr. Flansbaum says. “I would emphasize that the bump in pay is going to be proportional to the percentage of Medicaid patients that you see. There are some doctors who see an awful lot of Medicaid patients in safety-net and public hospitals, and that money, when it comes back to departments and divisions, can be used for things that a lot of these places never had the means to do before. It could be salary, but it could also mean hiring more people, more resources. It makes a difference.”
Public Policy Committee chair Ron Greeno, MD, FCCP, MHM, says SHM advocated for the parity regulation, as Medicaid has historically paid for only about 70% of the healthcare delivered to patients. Although the parity issue has not gathered as much attention as other facets of the healthcare reform movement, having CMS recognize that delivery of primary care is not restricted to traditional offices is one he and SHM are particularly proud of.
“This is a correction long in coming,” Dr. Greeno says. “We’re happy hospitalists were included in the group of people that will achieve that parity.”