Practice Management Column: Healthcare Law Delivers Higher Medicaid Payments to Primary Care Physicians

Health and Human Services (HHS) Secretary Kathleen Sebelius last week announced the final rule implementing the part of the health care law that delivers higher payments to primary care physicians serving Medicaid beneficiaries. The new rule raises rates to ensure doctors are paid the same for treating Medicare and Medicaid patients and does not raise costs for states.

“The health care law will help physicians serve millions of Americans across the country,” Secretary Sebelius said. “By improving payments for primary care services, we are helping Medicaid patients get the care they need to stay healthy and treat small health problems before they become big ones.”
The final rule implements the Affordable Care Act’s requirement that Medicaid pay physicians practicing in family medicine, general internal medicine, pediatric medicine, and related subspecialists at Medicare levels in Calendar Years 2013 and 2014.

This payment increase goes into effect in January of 2013.


On November 1, 2012, the Centers for Medicare & Medicaid Services (CMS) issued a final rule to implement a provision of the Affordable Care Act that provides increased payments to certain primary care physicians for specified Medicaid primary care services. Under this provision, certain physicians who provide eligible primary care services will be paid the Medicare rates in effect in calendar years (CY) 2013 and 2014 instead of their usual state-established Medicaid rates, which may be lower than federally established Medicare rates. The payment increase applies to primary care services delivered by a physician with a specialty designation of family medicine, general internal medicine, or pediatric medicine or related subspecialists. States will receive 100 percent federal financial participation (FFP) for the difference between the Medicaid state plan payment amount as of July 1, 2009, and the applicable Medicare rate.

The rule provides information about how CMS and states will work together to make the increased payments operational. The rule includes information about the identification of eligible providers and services and how to meet the statutory requirements when making these payments for services provided through managed care. The rule also provides important information on how this policy applies to the Vaccines for Children (VFC) program, which has its own statutory requirements for billing and payment, and updates the administration fees that may be billed under VFC based on medical inflation rates.

Qualifying Providers

Through the Affordable Care Act, primary care services eligible for the higher Medicaid payment must be delivered by a physician who specializes in family medicine, general internal medicine, or pediatric medicine. This rule specifies that certain physician subspecialists (for example, pediatric cardiologists) who are board certified in those specialties or provide primary care within the overall scope of those categories also qualify for the enhanced payment. The rule also clarifies that the higher payment will be made for primary care services rendered by practitioners—including, for example, nurse practitioners—working under the personal supervision of any qualifying physician.

In addition to payment improvements, the health care law includes numerous initiatives designed to bolster primary care and strengthen the primary care workforce, including an expansion of medical residency positions for primary care physicians, new investments in physician assistant and nurse practitioner training, and an unprecedented expansion of the National Health Service Corps, which provides scholarships and loan repayments to primary care providers who practice in underserved areas

For more information about today’s final rule visit the Centers for Medicare & Medicaid Services.

About The Author

Anne M. Dunne, RN-BC, MBA, MSCN is Grassi & Co.’s Director of Healthcare Consulting. Anne is a Registered Nurse with an MBA and holds dual certification in nursing case management and multiple sclerosis nursing. In her role at Grassi & Co., Anne helps Grassi & Co.’s healthcare clients with various practice management issues. To contact Anne directly, via phone please call 516-336-2463 or via email at Follow Anne on Twitter @annemdunne.

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