On Thursday the Centers for Medicare and Medicaid Services (CMS) issued a final rule implementing a provision of the Affordable Care Act (ACA) that provides higher payments to primary care physicians that serve Medicaid beneficiaries.  The rule implements an ACA requirement that during calendar years 2013 and 2014, physicians practicing in certain primary care practices must be paid by the Medicaid program at Medicare program levels.

Under the final rule, certain physicians are eligible to receive the greater of (a) rates in CY 2013 and 2014 not less than the Medicare rates in effect those calendar years, or (b) the payment rates that would be applicable in CY 2013 and 2014 using the CY 2009 Medicare physician fee schedule conversion factor.  In addition, the final rule provides for 100% federal financial participation (FFP) for any increase in payment above the amounts that would be due for specified services under the approved Medicaid state plan. The also rule requires states to collect and report data to CMS that will be used to help Congress determine whether to extend the increased Medicaid rates beyond CY 2014.

To be eligible to receive these increased Medicaid rates for specified primary care services, the physician furnishing the service must have a specialty designation of family medicine, general internal medicine, or pediatric medicine.  The rule also provides for higher payment for services provided under the personal supervision of eligible physicians by all advanced practice clinicians.  Eligible services are those services reimbursed on a physician fee schedule. (i.e., not services reimbursed through an encounter, visit, or per diem rate).  The list of eligible HCPCS codes is listed in the proposed rule and finalized in Thursday’s final rule.

The final rule also provides guidelines for implementing the increased payment for primary care services delivered by managed care plans.