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Medicaid Reimbursement to Increase for Primary Care Physicians

The Health Care and Education Reconciliation Act ("H.R. 4872") expands the recently enacted health care reform legislation. It includes a provision to help alleviate the declining reimbursement issues that many primary care physicians face. Under section 1202 of H.R. 4872, physicians with a primary specialty designation of family medicine, general internal medicine, or pediatric medicine ("primary care physicians") will receive increased reimbursement for evaluation and management services and services related to certain immunization administration for vaccines and toxoids(1) furnished to Medicaid beneficiaries in 2013 and 2014 at rates equivalent to reimbursement rates under Medicare Part B. Though Medicaid is a joint federal-state program, the primary care increase slated for years 2013 and 2014 are funded purely by the federal government.

The new health care reform legislation increases Medicaid eligibility to 133 percent of poverty for all nonelderly individuals, which will result in increased Medicaid participants. Currently, many physicians, primary care included, either refuse to see or limit the number of Medicaid patients because of low reimbursement. In many cases, physicians lose money on Medicaid patients once overhead expenses are considered. According to the 2008 Medicaid-to-Medicare Fee Index, the average national reimbursement for Medicaid is 72 percent of Medicare for all services and 66 percent of Medicare for primary care services.(2)

One goal of increasing primary care reimbursement is to attract more physicians to primary care given the nation's shortage of primary care physicians. This shortage is expected to grow as the baby-boomer population ages, the number of insured participants' increases under the new health care legislation, and aging physicians retire.

The new legislation does not extend the increase in Medicaid reimbursement beyond 2014. However, the number of Medicaid participants is scheduled to increase under the new legislation.

For more information, contact HORNE Manager Sharon Walden at sharon.walden@horne-llp.com or 225.755.9798. 

(1) Services related to immunization administration for vaccines and toxoids for which CPT codes 90465 - 90468 and 90471 - 90474 apply are defined as primary care services.

(2) Medicaid-to-Medicare Fee Index, 2008, Accessed from http://www.statehealthfacts.org/comparetable.jsp?ind=196&cat=4 on April 22, 2010.