Primary Care Provider Rate Bump Delayed

A two-year-long federally funded rate hike for Medi-Cal primary care providers was launched in January, but that money has not yet been distributed by state officials and likely will not be paid out until the fall, according to state officials and provider groups.

Medi-Cal is California’s Medicaid program.

According to one physician group, it’s not really California health officials’ fault.

“The delay is the responsibility of CMS,” said Leah Newkirk, vice president of health policy for the California Academy of Family Physicians. The federal agency issued its template for the change just before January, Newkirk said, so state Department of Health Care Services officials needed to request a State Plan Amendment for any rate change, and they did that in March.

“Now we’re all waiting for CMS to approve the SPA,” Newkirk said.

The rate change, good for 2013 and 2014, elevates Medi-Cal primary care provider rates up to Medicare levels. It’s designed to encourage primary care physicians to take on Medi-Cal patients.

The next step in the process comes on July 22, according to Norman Williams, deputy director of communications at DHCS, when primary care providers will need to fill out an online provider attestation form.

“Primary care physicians will need to attest that they’re eligible for Medi-Cal,” Newkirk explained. “Recently we saw a draft instruction sheet and attestation form, and we were given the ability to comment on that, and they’re telling us the Web portal will open at some point this summer.” Williams confirmed that the target date for opening that Web portal is July 22.

“DHCS is actively working with [CMS] to gain approval for the primary care rate increase,” Williams said in a written statement. “This is an important incentive for providers and it supports the adequacy of California’s provider network. At this point we are responding to CMS’ ‘Requests for Additional Information,’ a standard part of the State Plan Amendment approval process.”

Williams wrote, “We tentatively anticipate implementation of the pay hike in September, with the increase retroactive to Jan. 1.”

The money for primary care increases will not be the only retroactive provider payments. The state reduced Medi-Cal provider rates by 10% in 2011, and that cut was delayed by court cases — but now that the court case was decided in the state’s favor, providers themselves will retroactively owe a two-year, 10% cut — pretty much negating the federal rate hike for primary care providers, Newkirk said.

“We think we will not really see Medicare rates, because the state will be clawing back that money,” Newkirk said. “Basically, for primary care physicians, the feds will pay the difference [between Medi-Cal and Medicare rates], but at the same time the state is saying you owe us money for overpayment.”

Williams said California is on a similar timeline as other states, but according to Molly Weedn of the California Medical Association, 13 other states in Medicaid fee-for-service systems have already started payments and another 11 will start payments by this month. Nine states will be making payments this month to primary care providers in Medicaid managed care systems, she said.

Between the lag in payment and the clawback money that has to be paid to the state, the whole thing doesn’t sit well with primary care providers, Newkirk said.

“We think the parity policy is to create some goodwill and get providers to enroll in Medi-Cal,” Newkirk said. “With the cuts happening simultaneously, the goodwill, I think, is lost.”

Related Topics

Capitol Desk Medi-Cal