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Maryland extends pay hike for Medicaid physicians

But will they accept more low-income patients?

Maryland officials are spending tens of millions of dollars to extend a federal pay hike for physicians who serve Medicaid patients, but it’s unclear whether the incentive has been effective at increasing those patients’ access to care.

As part of the Affordable Care Act, federal officials bumped up Medicaid reimbursement rates — which many physicians believe are unacceptably low — to the same level as Medicare reimbursements. The idea was to make it financially easier for more physicians to accept more Medicaid patients.

The federal rate increase lasts for two years: from January 2013 to December of this year. But six states, including Maryland, allocated funding of their own to extend the increase, according to Kaiser Health News. Maryland spent $15 million to extend the higher rates until the end of fiscal 2015, in June.

The federal rate hike only applies to primary care physicians — not specialists. But Maryland took the policy a step further, opting to pay for specialists to also get the higher rate when they provide certain types of “primary care-like” services.

That cost Maryland about $75 million over the two-year period, according to Gene Ransom, CEO of MedChi, the state’s physician association.

Ransom said the policy has encouraged more physicians to start accepting Medicaid patients and led others to accept more Medicaid patients than they were already. He also said it’s become easier for low-income people to find a specialist who accepts Medicaid and that the policy helps keep people out of the emergency room for non-emergency complaints.

According to a MedChi survey released in November, 46 percent of physicians who did not accept Medicaid said they would consider starting to accept it. And 56 percent of those who did accept Medicaid said they would consider expanding their Medicaid panel.

But state officials don’t know how many physicians actually ended up making a change. Federal officials have not tracked the information, either, according to Kaiser Health News.

“It’s hard to quantify that number,” because the state doesn’t deal directly with most participating physicians, said Chuck Lehman, acting deputy secretary for healthcare finance, who oversees Maryland Medicaid. Most doctors contract with entities called “managed care organizations” that coordinate Medicaid benefits on behalf of the state.

“But you’d think the [policy] would have helped recruit doctors,” Lehman said, “because the increase is significant.”

In Maryland, bringing Medicaid rates in line with Medicare rates results in about a 20 percent increase, on average. Several physicians said they doubt that’s enough to tempt doctors to participate.

“Medicare rates are still low; they’re horrible” compared to commercial insurance reimbursement rates, said Dr. Nick Grosso, an orthopedist at Orthopaedic Associates of Central Maryland.

“As bad as Medicaid rates were, to say you’ve brought them up to Medicare levels isn’t exactly sparkling,” Grosso said. “Just because Medicaid is now less horrible doesn’t make it attractive at all to a private-practice physician.”

Grosso already sees some Medicaid patients but likely won’t take on more. His office sees a lot of older people on Medicare, which doesn’t pay as much as commercial insurance, so more Medicaid business isn’t exactly what he and other physicians are looking for, he said.

Other doctors agreed.

“One can only afford to run a Medicaid practice if one has a significant commercial [insurance] panel,” said Dr. George Bone, an internist and a member of the state’s Health Services Cost Review Commission, which regulates hospitals.

Bone, who also accepts some Medicaid patients, said the rate hike prompted him to consider seeing more, but he hasn’t decided yet.

Moreover, there’s no guarantee Medicaid rates will stay at the higher level beyond 2015. The General Assembly would have to include funds for the increase in future budgets.

That uncertainty makes it tough for physicians to decide whether to accept those patients now, several people said.

“This is a constant problem for physicians,” Ransom said. “If you had less uncertainty over future rates, more doctors would have jumped in.”

“I don’t think raising rates a little bit here and there will really make much of a sea change,” Grosso added.