Primary Care Rate Increase

Advocacy-Alerts-ImageAs part of the Patient Protection and Affordable Care Act (ACA), the federal government fully financed the difference between the state Medicaid payment rate and the current year Medicare rate for two years (January 1, 2013, through December 31, 2014) that resulted in a primary care rate increase (PCRI) for eligible primary care physicians.

Even though the ending date has passed, physicians may still be receiving some reimbursement at the increased rate, but that reimbursement is for services provided prior to December 31, 2014. Medicaid primary care services provided on or after January 1, 2015, are being paid at the same rate that physicians received for performing those services in 2012. It is important to note that if physicians have billings to submit for services provided on or before December 31, 2014, at the increased rate, they must submit those bills for payment prior to Tuesday, June 30, 2015, in order to receive payment at the increased primary care rate.

If some sort of PCRI is enacted as part of the state budget bill that is currently under consideration, that increase would not go into effect until Friday, January 1, 2016 (even though the state budget will go into effect on Wednesday, July 1, 2015).

The Ohio Academy of Family Physicians and the American Academy of Family Physicians continue to strongly advocate for extension of the PCRI. The PCRI is needed to ensure that primary care physicians can afford to provide care to Medicaid patients. Without the extension of the rate increase, access to care for Medicaid patients will suffer.


On February 2, 2015, the Office of Health Transformation (OHT) published a promotional document about health care reforms in the governor’s 2016-17 executive budget proposal. The document talks about investing in preventive health care services by increasing Medicaid reimbursement rates for primary care and dental services to ensure that Ohioans have access to necessary services when they need them. But in a meeting with Ohio Medicaid Director John McCarthy on February 2, 2015, several hours before the budget document’s release, the OAFP was told that the increase is a 4% increase in payment on 2012 payment levels for specific primary care codes. So, in effect, this 4% increase is a 37% decrease in what primary care physicians were reimbursed for primary care codes in 2013 and 2014 (under the two-year PCRI provided for in the Affordable Care Act).

According to an analysis provided on the OHT website, “Ohio Medicaid currently pays physicians approximately 59% of the Medicare physician fee schedule. Aside from the recently discontinued federal PCRI, providers of physician services have not received a payment increase since the year 2000. Beginning Friday, January 1, 2016, Ohio Medicaid will provide an enhanced payment amount to eligible Medicaid providers that bill for office or outpatient services codes, and preventive services codes.”

“Unlike the temporary PCRI, this initiative is not limited to particular primary care specialties, nor is it limited to primary care physicians or physicians alone. Many practitioners bill the office visit codes, including nearly all physicians, advanced practice nurses, physician assistants, and a variety of clinic types.The enhanced payment provision will apply to services provided through both the fee-for-service and managed care delivery systems. Although not restricted by place of service delivery, facility/non-facility pricing rules will still apply, but at a somewhat higher payment level. The enhanced payment amount costs $42.1 million ($15.8 million state share) in 2016 and $109.2 million ($41.1 state share) in 2017, all of which is offset by savings.”

Since there is no new money to pay for this 4% increase, or 37% decrease depending upon your point of view, Medicaid is taking the money from other Medicaid programs which will hurt the very physicians that it claims to help.

According to the OHT website, the executive budget proposal also proposes to “Apply Medicaid maximum payment to Medicare crossover claims. For individuals enrolled in Medicare and Medicaid, states have the option to pay the patient’s Medicare cost sharing amount (typically 20%) or reimburse up to the Medicaid maximum amount. Ohio has elected to only reimburse up to the Medicaid maximum for all services except physician services. Currently physicians are paid the full Medicare cost sharing, which can result in a provider being paid more than the Medicaid maximum amount. The Executive Budget requires Ohio Medicaid to reimburse only up to the Medicaid maximum for all Part B categories of service, including physician services. This provision will save $43.1 million ($16.2 million state share) in 2016 and $86.2 million ($32.4 million state share) in 2017, all of which is applied to primary care rate increases.”

Preliminary calculations indicate that physicians who care for dual eligible patients would lose a substantial amount of their 4% increase as a result of this move which takes money away from physicians in one area so they can be paid more in another. Again, there is an element of “smoke and mirrors” at play.

And the OHT website goes on to describe another source of revenue as “Conversion of subsidies for medical education into a primary care rate increase. Ohio Medicaid spends approximately $100 million annually to subsidize physician training through direct graduate medical education (GME) payments to teaching hospitals. Teaching hospitals tend to offer residency programs that focus on specialized medicine, rather than primary care, which is the state’s priority to support.”

“The Governor’s OHT convened a series of meetings to explore revising the GME formula to better support primary care and, during those meetings, the point was made that a more direct strategy for attracting future doctors into primary care is to increase primary care rates. In response, and because the current GME formula subsidizes specialty training as well as primary care training, the Executive Budget transfers $25 million in Medicaid GME to support a primary care rate increase in 2017.”

Since clinical care offered in residencies helps to fund the educational endeavors of the residency and large amounts of that clinical care is provided to Medicaid recipients, again this is another move that shifts money away from the very physicians that it claims to help.

The Ohio Academy of Family Physicians continues to evaluate the unintended consequences of the executive budget document, noting problem areas and working with the Ohio Department of Medicaid, the Ohio OHT and the Ohio General Assembly to achieve satisfactory resolutions.

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