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Gene Ransom, MedChi CEO
Gene Ransom, CEO of MedChi, the Maryland physician association, says the Medicaid rate hike should lower health care costs in the long run. (The Daily Record/Rich Dennison)

Medicaid rate hike could yield long-term savings

In today’s story about the increase in Medicaid reimbursement rates, several sources say the hike is only minimally effective at encouraging more physicians to accept those patients. One big reason for the tepid enthusiasm among docs is that the hike is temporary, at least for now.

There’s no guarantee Medicaid rates won’t revert back to their original (low) levels. In fact, we should not assume the rate hike will continue beyond 2015. But if the hike were implemented permanently, doctor participation could spike.

Quick refresher: The federal government implemented a two-year increase in Medicaid reimbursement rates for primary care physicians. Medicaid rates are now equal to Medicare rates. Maryland extended the increase to specialists, and prolonged it through June 2015.

After that, the General Assembly must include funding for the hike in future budgets. Sustaining the rate increase is popular among some legislators, such as Del. Dan Morhaim (D-Baltimore County), an emergency medicine physician.

Morhaim said greater rate parity is a good thing, because it would make it easier for patients to find primary care services. That saves the health care system money, he said, because those patients wouldn’t be forced to default to the emergency room, where costs are much higher.

But Morhaim wouldn’t speculate about the likelihood of another extension making it through the General Assembly. Neither would Dr. Joshua Sharfstein, secretary of the Department of Health and Mental Hygiene.

But Dr. George Bone, an internist and member of the Maryland Health Services Cost Review Commission, said he thinks the General Assembly will “more than likely” uphold the higher rates.

The driver behind the rate hike in the first place was the desire to reduce the overall cost of health care, Bone said. Expanding access to primary care is one way of doing that, because it reduces demand on emergency rooms, he said.

So, said Bone and others, even though increasing the Medicaid reimbursement rates does cost the state money, it could save money in the long run.

“That’s why we think it’s worth it to keep this policy in place,” said MedChi CEO Gene Ransom.