The Importance of Medicaid Parity For Primary Care

The politics of Medicaid are robust and complicated.  However, the complexity of the issue shouldn’t prevent Medicaid patients from receiving timely and quality health care services – especially primary care.  Supporting access to efficient, cost-effective primary care for over 62 million Medicaid patients is why Congress should extend Section 1202 of the Affordable Care Act (ACA), also known as “Medicaid parity.”

Historically, Medicaid reimbursement rates have been approximately 30 percent lower than Medicare rates for the same services. For primary care services specifically, that difference was even more severe prior to implementation of Section 1202, with Medicaid paying just 59 cents on the dollar relative to Medicare, according to the Kaiser Family Foundation. Unfortunately, poor payment rates negatively impacted access for patients.  According to HealthPocket, only 43 percent of physicians and 20 percent of PAs and NPs accept Medicaid.  These percentages are higher for family medicine (68%), but still insufficient to meet the growing patient population.

The Medicaid parity provision requires that Medicaid compensate primary care physicians, defined as family medicine, general internal medicine, and general pediatrics, at 100 percent of Medicare payment rates for a defined set of primary care services. While it is too early to measure the impact of this policy, we do know that there is a direct correlation between payment rates and participation in the Medicaid program.  For example, in 2005 Kentucky participation rates rose 36 percent as a result of an increase in Medicaid payment rates.  There also are occurrences of participation rates dropping as a result of a reduction in Medicaid payment rates.  We also are starting to learn that access to primary care physicians has a positive impact on the overall health care spend for Medicaid programs.  The Medicaid and CHIP Payment and Access Commission (MACPAC), in their July 2014MACfacts, found “higher ED [emergency department] use by Medicaid enrollees when they have difficulty accessing their regular doctor and other appropriate settings” and they also note that “expanding the availability of primary care could lead to more efficient use of the ED.”