House Members look at Higher Medicaid Reimbursement

The Affordable Care Act, also known as “Obamacare,” increased Medicaid reimbursement rates through 2013 and 2014, but these federal rates expire after 2014, leaving the future of reimbursement up to the states. States control the provider payment rates; 45 states froze provider reimbursement rates in 2012, casting doubt that they will match the 2013-2014 rates that bring Medicaid rates on par with Medicare. Currently, Medicaid pays on average only 66 percent of Medicare rates. The federal government has only been able to provide the payment bump by subsidizing the difference between state rates and Medicare rates. The federal payments to doctors, even though they are retroactive to January 1^st, have been slow to take effect this year due to late rules published by the Centers for Medicare and Medicaid Services (CMS).

At a Congressional hearing earlier this month entitled “The Need for Medicaid Reform”, House Republicans and Democrats didn't see eye to eye about what to do with the future of the program. As reported by MedPageToday, the popular Republican plan has been to transform Medicaid into a block grant program, whereby the federal government gives states a set amount of money per beneficiary and allows them to run the program as they see fit. Democrats have opposed such a measure, saying the low-income elderly and disabled will be most at risk.

Both sides seemed to get together, however, on the need to do something with the program. In Texas, for example, only 31% of doctors accept new Medicaid patients. This poses a threat of access for millions of people starting next year, according to Rep. Mike Burgess (R-TX). Rep. Henry Waxman (D-CA), the top Democrat on the House Energy and Commerce Committee, suggested at the same hearing that Congress should extend the temporary payment increase past 2014.

The hearing also shed light on a cost sharing program in Arkansas that could serve as a potential model for reform. The state started the program in October that determines if a provider reaches quality and cost targets based on historical models for certain episodes. Providers who manage care and costs well compared to historical cost levels receive rewards. Those who don't face losing payments. State Surgeon General Joe Thompson told the committee that the rate of spending growth has shrunk to the lowest in 25 years.