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Low-Income Patients and Medicaid Managed Care Providers

medicaid managed care providers fee increase In November 2012, The Centers for Medicare and Medicaid Services (CMS) ruled for a temporary increase on fee-for-service reimbursement rates. This increase in payment rates was set to encourage doctors to participate in Medicaid, which received substantially lower repayment rates compared to Medicare—about two-thirds lower.

To lessen the payment gap between the two government health care organizations, Medicaid rates were increased by 73% for 2013 and 2014. While this increase certainly served its purpose of encouraging doctors to provide care for Medicaid patients, it’s still unknown what will happen now that, as of January 1, 2015, the increase has expired.

What does this mean for Medicaid managed care providers?

Now, health care providers have the option to continue participating in Medicaid, or to completely halt participation all together. Without the pay increase, much of the incentive for doctors to continue Medicaid care is gone, since the reduction means a 42% pay cut for providing Medicaid services.

While the continued expansion is optional for states, participating sooner rather than later has its perks. As encouragement, the government is providing 100% federal funding for the expansion efforts of Medicaid managed care providers from 2014 through 2016.

Thus far, 29 states have committed to the Medicaid expansion initiative. In the event that the fee increase is not sustained, these states will receive a 31% primary care fee reduction, compared to the 47.4% reduction for those that are not participating at all. Those that remain undecided will receive a 31.7% reduction if the fee increase is not met.

The states that have agreed to participate in the expansion have received 26% Medicaid enrollment growth, compared to the mere 8% enrollment growth in non-participating states. As a result of the expansion efforts, Medicaid is expected to provide coverage for as many as 18 million additional people by 2018, according to the Congressional Budget Office.

Who is eligible for Medicaid?

Before the Accountable Care Act (ACA) was established in 2010, many low-income adults were typically excluded from Medicaid. As one of its largest initiatives, the ACA expanded Medicaid eligibility to nearly all non-elderly adults with an income level at or below 138% of the federal poverty level (FPL)—$16,242 for a single individual’s income in 2015.

The ACA is also committed to providing children with better health coverage, and requires Medicare be closely paired with the Children’s Health Insurance Program (CHIP). Together, the two organizations cover 29.1 million children as of December 2014, according to Medicaid.

The 138% FPL criterion applies to children up to the age of 19 years of age. However, Medicaid must cover children growing out of foster care until the age of 26.

Individuals in the states that have decided not to participate in Medicaid expansion will only be eligible if they fall below a mere 46% of the FPL—only $5,414 or less in annual income for a single individual. Adults without children also remain ineligible for Medicaid in these states, aside from Wisconsin.

Is your organization prepared to manage the millions of new Medicaid enrollees? General Medicine, The Post-Hospitalist Company partners with your facility to provide an enhanced level of care for your patients while complying with the ever-changing regulations. Are you ready to improve?

Let’s Work Together

Tom Prose