Medicaid Primary Care Parity

For 2013 and 2014, the federal government raised payment rates to Medicaid primary care providers. Only some states plan to extend the rate increase.

What's the issue?

Section 1202 of the Affordable Care Act (ACA) required states to raise Medicaid primary care payment rates to Medicare levels in 2013 and 2014, with the federal government paying 100 percent of the increase. This provision--often referred to as "Medicaid primary care parity" or the "Medicaid primary care fee bump"--was intended to encourage primary care physicians to participate in Medicaid, particularly in the face of an expected increase in enrollment as a result of the ACA's expansion of the program.

Federal lawmakers failed to reauthorize the fee bump during the 113th Congress, ending in December 2014. As a result, states must decide whether to revert to previous primary care payment levels or continue at a higher level but without the benefit of the enhanced federal match. As of January 1, 2015, sixteen states and the District of Columbia had decided to continue paying enhanced rates, while thirty-four states had declined.

Although the program is over, the debate about whether it worked--and should, therefore, be reinstated in some form--continues. Evaluators have been challenged by the program's later-than-planned start and short duration, which many believe made it impossible to detect program impacts. Another challenge to measuring the program's impact is that it was intended to improve access to care--a variable that is difficult to measure directly. Evaluators' focus has been primarily on provider participation, which may be an incomplete proxy for access. Finally, program evaluation is hampered by the difficulty of isolating the impact of the payment increase from the impact of hundreds of other changes made in both public and private insurance and delivery systems under the ACA.

This policy brief describes the Medicaid primary care fee bump, the rationale for the program, and the details of its rollout. Next, the brief explores evidence of the program's impact, outlines stakeholders' views on both sides of the debate, and concludes with some thoughts about how the program could be improved or modified in the future, if it is to be continued at the national or state levels.