Due to the severe state budget shortfall for the 2011-2013 biennium, Medicaid Fee-for-service rates have been adjusted to reflect an overall 11.5% reduction in the agency’s budget. This proposed cut is smaller than the 19% cut that was originally considered in the Governor’s proposed budget.
The reimbursement rate reductions vary according to services and specialties. The legislature was able to secure additional funds to buy back some of the cuts for primary care providers. DMAP is working with those funds to ensure that pediatricians, general internal medicine, prenatal and delivery obstetrical services, and family physicians will not see any reductions. Most of the cuts will be effective August 1st, 2011.
The new conversion factor for physicians and other professionals is $26.00 priced at 72% of Jan 2010 nationwide Medicare (vs. the former $27.82 priced at 77% of Jan 2010 nationwide Medicare). Primary care and obstetrics conversion factors are excluded from cuts and will remain the same.
To be paid the primary care rate, a provider must be both:
• A primary care provider, and
• Bill a primary care code.
Example:
Primary care provider + Primary care code =No reduction
Primary care provider + Non-primary care code = Reduced rate
Non-primary provider + Primary care code = Reduced rate
MCO’s (Managed Care Organizations) are also affected and will be receiving an average of 11% reduction in their capitation rates. MCO reductions will go into effect no later than October 1st, 2011.
More information:
For an overview of Medicaid rate reductions click here.
For Medicaid fee schedule click here