The Affordable Care Act included a temporary bump in the Medicaid fees paid to physicians for certain primary care services. The intention behind the two-year, federally-funded increase was to encourage more physicians to participate in Medicaid to accommodate an expanding pool of Medicaid patients anticipated by the law.
But a 2012 Supreme Court decision opened a window for states to reject Medicaid expansion – Missouri is one of 23 states that have chosen not to expanded coverage – and as of Jan. 1, the Medicaid fee bump is expired as well.
I spoke with Dave Dillon and Andrew Wheeler of the Missouri Hospital Association (MHA) about the impact the fee increase expiration will have on Missouri hospitals.
This interview has been condensed and edited for content and clarity.
Many states are seeing a drop in reimbursement rates, but according to the Urban Institute, Missouri’s drop is one of the largest. To what do you attribute Missouri’s comparatively large drop?
Andrew Wheeler: A lot of this is hinged on what our payments were prior to the bump. So whenever you have a state that has less payment to a primary care physician as compared to other states, our bump is going to be more. So whenever those payments are reduced, that also means our reduction will also be more.
Was the expiration in reimbursement something the MHA or hospitals in general were planning for?
Dave Dillon: Ultimately we are the association that represents hospitals. Hospitals especially in rural parts of the state are the primary engine for recruiting physicians to communities. And so the intent originally of this was to bump participation in Medicaid and it could have implications, although that's unknown, on physician participation. It won’t on hospital participation. Hospitals will continue to participate in Medicaid. The alternative is in most cases no payment at all. So we know we will play. The question I think will have to be asked and monitored is, ‘will physicians, with a reduction, drop out of the system?’ You’re not going to probably see an increase in volume in Medicaid patients because we are not expanding the number of people in that system.
Does the fact that Missouri did not expand Medicaid coverage in a way shield or create a buffer for the drop that we've seen this year in the reimbursement rate?
Dave Dillon: I would say maybe it's probably the opposite. We need a more robust Medicaid program, not a less robust Medicaid program. If we had more Medicaid patients that were payers, a slightly lower rate would probably hurt less.
Andrew Wheeler: I think that's really the important message of this is if Medicaid expansion did come into play that means that less patients physicians see would be self-pay, and would have some type of payment which would offset those reductions that we're seeing on Jan. 1.
