Archives: KHI News Service

On January 1, 2017, the KHI News Service became part of KCUR public radio’s new initiative, the Kansas News Service. The Kansas News Service will continue to cover health policy news and broaden its scope to include education and politics. All stories produced by the former KHI News Service are archived here. Stories and photos may be republished at no cost with proper attribution and a link back to

Medicaid rates reduced for primary care

Expiration of federal incentive program cuts physician reimbursement

By Dave Ranney | January 07, 2015

Starting this month Kansas primary care physicians will be paid less for seeing Medicaid patients.

The expiration of a federal incentive program in the Affordable Care Act is responsible for the reduction.

Nationally, the average fee reduction is expected to be about 43 percent, according to a recent report from the Health Policy Center of the Urban Institute.

However, in Kansas, the cut in payments likely will be much less, closer to 25 percent. The change is expected to affect about 2,500 primary care physicians in the state.

“The reductions vary from state to state,” said Stephen Zuckerman, a co-director and senior fellow at the Urban Institute.

The reductions rescind a two-year incentive package that accompanied enactment of the Affordable Care Act. The package’s pay provisions expired Dec. 31.

“Kansas’ Medicaid fees, two years ago, weren’t as low as they were in other states,” Zuckerman said. “So the payment incentives that were built in the Affordable Care Act weren’t as much for Kansas as they were for other states.

“Now that those incentives are going away,” he said, “the decrease won’t be as much either.”

A temporary change

The increases were meant to encourage primary care physicians to take on more Medicaid patients — children, frail elders, and people with disabilities, primarily — in anticipation of more of people being eligible for government-funded health care.

States that used federal funds to expand Medicaid eligibility saw big enrollment increases. Kansas is one of 16 states that have so far decided not to expand Medicaid eligibility to low-income adults, according to the Kaiser Family Foundation. The District of Columbia and 27 states have expanded their programs. Policymakers in seven states are currently considering expansion proposals.

From the outset, the federally funded increases were meant to be temporary.

“It was a two-year incentive contained in the ACA to increase participation in Medicaid by primary care physicians,” Jerry Slaughter, executive director at the Kansas Medical Society, wrote in an email to KHI News Service. “It, of course, was a welcome incentive for primary care docs.”

Photo by Phil Cauthon Jerry Slaughter, executive director of the Kansas Medical Society.

View larger photo

Whether the reduction leads to fewer physicians taking on fewer Medicaid patients is unclear, he said, in part because measuring the effects of the two-year “bump” in payments has been difficult.

“Whether it actually increased participation rates significantly is unknown at this time because Kansas physicians have always participated in Medicaid in very high numbers,” Slaughter said. “The increase did flow through the Medicaid MCOs (managed care companies) to the docs, as nearly all of Medicaid is now delivered through that structure. It’s hard to say whether the return to the old primary care rates will adversely affect participation rates, but it certainly won’t help.”

In Kansas, the increases coincided with lawmakers agreeing to launch KanCare, allowing three for-profit managed care companies — Amerigroup, UnitedHealthcare Community Plan and Sunflower Health Plan, a subsidiary of Centene — to manage the state’s Medicaid programs.

“We did see an increase in primary care physician utilization,” said Sara Belfry, a spokesperson for the Kansas Department of Health and Environment. “But we cannot determine if that was due to the enhanced payment or to the movement to KanCare — the better integration of care, prevention activities.”

The reductions are limited to primary care services and are not expected to affect specialists — surgeons, for example — or care provided in hospital emergency rooms or federally certified safety net clinics.

Impact not clear

Dr. Michael Machen, a primary care physician at Bluestem Medical Clinic in Quinter for the past 29 years, said he doubted that the reductions will cause his clinic to take on fewer Medicaid patients.

“For those of us in rural America, it’s not going to affect us much,” Machen said. “We’ll continue to see Medicaid patients; we’ll just get paid less.”

Quinter, population 950, is about 50 miles west of Hays.

Bluestem Medical Clinic does not turn away Medicaid patients, Machen said.

“It’s not like we look in their wallets and say, ‘Oh, you’re on Medicaid. You’ll have to go somewhere else,’” he said. “We haven’t done that — and we wouldn’t do that — because we know these people have nowhere else to go.”

Medicaid patients, he said, account for about 10 percent of the clinic’s caseload.

Another Bluestem Medical Clinic physician, Dr. Doug Gruenbacher, is president of the Kansas Academy of Family Physicians. He said clinics in the state’s urban areas are unlikely to follow the rural clinic’s lead.

“If you’re in one of the big urban areas where there’s more than one place for people to go — like one of the safety net clinics or the emergency room — you’re a lot more likely to limit your practice to, say, 5 percent Medicaid or 10 percent, or 15 percent, or whatever,” Gruenbacher said.

Though the Kansas rate reductions will not be as deep as those in other states, they still will have an impact, he said.

“Twenty-five percent is significant,” Gruenbacher said. “It will affect your bottom line.”

In six states, according to the Urban Institute report, fee reductions are expected to top 50 percent: California, Florida, Michigan, New Jersey, New York and Pennsylvania.

Fifteen states — not including Kansas — have agreed to sustain rate increases using state funds, according to the report.

Jon Rosell, executive director of the Medical Society of Sedgwick County, said he’s expecting some Wichita area clinics to start taking fewer Medicaid patients.

“They continue to be in this dilemma of seeing a legitimate need for medical care and wanting to meet that need, and then finding themselves in an economic construct that, for them, isn’t sustainable,” he said. “It makes for some very challenging and very frustrating decisions when it comes to continuing to participate in the program.”

The medical society, Rosell said, would like Kansas to join the list of states that have chosen to preserve the increases.

“Enhancing the payments, two years ago, was a strategic and very appropriate thing to do,” he said. “If there was any way to maintain that, it would definitely help.”