State Plans Retroactive Payment Rate Hikes

The good news for primary care physicians is the federal program to raise Medicaid reimbursement rates starts Jan. 1.

The bad news is Medi-Cal providers in California may have to wait several months to retroactively receive the higher payment.

California health officials have to wait for federal approval of a state plan amendment, which will take time, said Norman Williams, deputy director of public affairs for the Department of Health Care Services.

“The increased payments will be made retroactively, after SPA approval by CMS,” Williams said.

California is in the same boat as many other states, Williams said, since the final federal regulations governing the two-year primary care physician rate hike were released Nov. 1. That hasn’t given states much time to create and submit the necessary state plan amendment, he said.

“The federal government recognized that states might not have enough time, and there is language [in the final regulations] that anticipates filing an SPA during the first quarter of 2013,” Williams said. “Our priority is to get it done as soon as possible.”

The first phase of the Healthy Families transition to Medi-Cal also starts on Jan. 1, with roughly 415,000 California children making the switch. The promised higher primary care rate payment for Medicaid was one of the factors that could help ensure a smoother transition by helping to address access concerns.

Williams said the retroactive payment should not affect the Healthy Families transition at all. Physicians will get automatic reimbursement for the retroactive higher rate, he said.

“They will not have to resubmit any claims to get that [retroactive reimbursement],” Williams said. “When they submit their initial claim, we keep a record of that. Then we issue them lump sums [for the difference].  

So they won’t have to resubmit to get the enhanced rate.”

The delay in payment was not welcome news for Lisa Folberg, vice president of medical and regulatory policy at the California Medical Association.

“There’s no reason why California should struggle so much with this,” Folberg said. “I find that particularly problematic. Why should there be delay in a 100% federally funded program? I find that a little bit shocking.”

California health officials have known for two years that this rate increase has been coming, she said.

“This federal rate increase is going to be delayed significantly,” Folberg said. “The whole Healthy Families transition is predicated on the fact that they won’t have access problems [because of the increased federal reimbursement rate], so there are certainly more ramifications than meets the eye. This feels like a huge missed opportunity.”

Williams was reluctant to speculate on when the process would be complete. “I don’t want to give a timeline. It depends on a number of things,” Williams said. “We are working to meet the federal guidelines, which is a complicated process. We have to go through the process, so it simply is a matter of getting it done as quickly as possible.”

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