The two year Medicaid reimbursement increase came to an end 2015. As part of the Affordable Care Act (ACA), rates had been increased by 40% or more to match those of Medicare for CYs 2013 and 2014.
The increase in reimbursement was part of the initiative to have states expand Medicaid programs in hopes of providing greater access to health coverage to more low income, uninsured citizens.
As expected, Medicaid enrollments did increase and family physicians felt the biggest impact. They will likely also feel the biggest impact of the new lower fee schedule.
There are currently 15 states that will hold rates steady by using money from their own coffers. Those 15 are: Alabama, Alaska, Colorado, Connecticut, Delaware, Hawaii, Iowa, Maine, Maryland, Michigan, Mississippi, Nebraska, Nevada, New Mexico, and South Carolina.
It is yet undetermined if others will follow suit. (See survey by the Kaiser Family Foundation reported by Medscape Medical News.) The Urban Institute has indicated the impact is significant for PCPs:
Providers in California, Florida, Illinois, New Jersey, New York, Pennsylvania, and Rhode Island will see about a 50% reduction
Providers in states that will definitely not keep the increased rate could average a 47% loss
Providers in the undecided states are looking at a reduction of 31.7%.
This bit of bad news comes along with the penalty phase for failure to meet the requirements for the "meaningful use" of electronic health records (EHRs). CMS estimated that over 257,000 physicians and healthcare providers will be penalized 1% of their reimbursements for CY 2015. This staggering number is about 50% of the eligible professionals.
As reimbursement reductions are looming on almost every provider’s horizon, now is the time to evaluate your medical billing software. Shortcomings in your system could be costing you much needed practice income.