CMS ha issued a proposed rule which provides increased payments for certain Medicaid primary care services.  Under this provision, certain physicians that provide eligible primary care services would be paid the Medicare rates in effect in calendar years (CY) 2013 and 2014 (or if greater, the Medicare rate in effect in 2009) instead of their usual state-established Medicaid rates, which may be lower than federally established Medicare rates.  Increased payment 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 increase applies to a specific set of services and procedures that CMS designates as “primary care services”.

The proposed rule provides information about how CMS and States will work together to make the increased payments operational.  The guidance 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 guidance 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.

Qualifying Providers

Under the Affordable Care Act, primary care services eligible for the higher payment would be delivered by a physician who specializes in family medicine, general internal medicine, or pediatric medicine. In the proposed rule, we clarify that subspecialists related to these primary care specialists qualify for the enhanced payment. We also clarify that services must be delivered under the Medicaid physician services benefit. This means higher payment would be made for primary care services rendered by practitioners—including, for example, nurse practitioners—working under the supervision of any qualifying physician and billing under that physician’s Medicaid provider number.

Implementing the Increased Payments in Fee for Service and Managed Care

The proposed rule would allow States two options: (1) “lock” rates at the level of the Medicare physician fee schedule in effect at the beginning of 2013 and 2014; or (2) modify the rates in alignment with all updates made by Medicare. The regulation provides that all of the requirements related to the increased payments apply to services reimbursed by Medicaid managed care plans.  We propose that States incorporate the increased payment into contracts with such entities.

Interaction with the Vaccines for Children Program

The rule proposes payment of vaccine administration fees under the VFC program at the lesser of the VFC regional maximum administration fee (the VFC “ceiling”) or the Medicare rates in 2013 and 2014, whichever rate is lowest.  This is consistent with VFC program rules which limit payments to the VFC ceiling, which is the amount charged by the provider, and to one payment per vaccine administered.  Because the VFC ceiling rates were issued on an interim basis in 1994 and have never been updated, we are proposing to update these rates by increasing them as indicated by the Medicare Economic Index (MEI), which is a measure of medical practice cost inflation.

Read the proposed rule here.