Stephanie Myers
December 4, 2014
The Affordable Care Act and Medicaid Reimbursement Shortcomings
Fewer physicians are accepting new Medicaid patients today, mainly because of low reimbursement rates and the large increase in the number of Medicaid enrollees. As many states have expanded Medicaid in response to the Affordable Care Act (ACA), which promises additional federal funds for a number of years, the number of Medicaid patients has increased dramatically. The problem is Medicaid only reimburses doctors about 60 percent of what private insurers pay (Glans, 2014). Many physicians limit the number of Medicaid patients they serve in comparison to those with private insurance because they simply cannot afford to take too many patients receiving subsidized care (Glans, 2014). Unfortunately, some refuse to accept any Medicaid patients, and with the shortage of primary care providers, is access really improving?
Insurance officials recognize the reduced rates in some plans, and express are under enormous pressure to keep premiums affordable. They believe that physicians will make up for the lower pay by seeing more patients, since the plans tend to have smaller networks of doctors. From the provider perspective, if a rate has already been negotiated from insurance, it should be the same on or off the exchange since the same services is being provided (Rabin, 2013). Yet many physicians complain of not being able to see their current patients, so it is unlikely public insurance that reimburse less than private insurance will increase access. There have already been steep decreases in Medicaid patient acceptance as reimbursement rates worsen, and few doctors expect reimbursement rates to improve. Information gathered from interviews from physicians suggests that if the Medicare pays $90 for an office visit of a complex nature, and a commercial plan pays $100 or more, while Medicaid offers $60 to $70 (Rabin, 2013). Further, a survey conducted by The Medical Society of the State of New York found that 40 percent of about 400 physicians who had responded said they chose not to participate in a health insurer’s exchange plan (Rabin, 2013).
Most of the payment system reforms in the ACA are part of pilot projects being initiated by the Center for Medicare and Medicaid Innovation (CMMI). CMMI initiatives include strategies for promoting primary care and bundled payment initiatives where a single payment is made to cover more of the services delivered in an episode of care (Wilensky, 2012). Unfortunately, none of these initiatives provides alternative reimbursement arrangements for physicians whom are separate from institutional payments (Wilensky, 2012). The Affordable Care Act attempted to address the reimbursement predicament by provisionally increasing Medicaid reimbursement rates to those of Medicare, which incentivized doctors to accept new Medicaid patients. However, this temporary funding will end at the close of this year unless it is extended through new legislation (Glans, 2014). Without the passing of new legislation to extend this funding, states will be required to fund substantially higher Medicaid payments, while reimbursements to physicians will lessen even more.
The ACA has accomplished insuring approximately 30 million previously uninsured people; about half with subsidized private coverage purchased in the mostly yet-to-be-formed state insurance exchanges and the other half through Medicaid expansions (Wilensky, 2012). The current Medicaid model is costly for taxpayers, offers subpar healthcare, minimally improves access, and shifts more power to the federal government (Glans, 2014). With that said, where do we go from here?
Some think Medicaid should not be expanded, but that state lawmakers should instead focus on reform options that reduce costs while offering better care to patients in the existing system (Glans, 2014). Others suggest that the expansion of Medicaid will benefit those states who have not thus far, suggesting they are likely to see net savings, positive economic effects, and increase revenues to hospitals, possibly offsetting the hospital reimbursement reductions that were also included in the ACA (Rabin, 2013). Personally, I am not sure any of these proposals will improve the reimbursement rates, but it is clear this subject deserves serious attention.

References
Glans, M. (2014). Research & Commentary: Reimbursement Flaws in Medicaid and the ACA. The Heartland Institute. Retrieved from http://heartland.org/policy-documents/research-commentary-reimbursement-flaws-medicaid-and-aca
Rabin, R. C. (2013). Doctors complain they will be paid less by exchange plans. Kaiser Health News. Retrieved from http://kaiserhealthnews.org/news/doctor-rates-marketplace-insurance-plans/
Wilensky, G. R. (2012). The shortfalls of “Obamacare”. New England Journal of Medicine, 367(16), 1479-1481.