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Nov 05 2012

CMS Issues Final Rule for Medicaid Rate Increase

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, for CY 2013 and 2014 certain physicians are eligible to receive the greater of: (a) rates 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 amounts that would be due for specified services under the approved Medicaid state plan.




  • Eligible Providers. Physicians eligible to receive increased Medicaid rates for specified primary care services must have a specialty designation of family medicine, general internal medicine, or pediatric medicine.  The final rule also provides for higher payment for specified services provided under the personal supervision of eligible physicians by all advanced practice clinicians. 

  • Eligible Services. Services eligible for increased rates are those services reimbursed on a physician fee schedule. (i.e., not services reimbursed through an encounter, visit, or per diem rate).  Eligible HCPCS codes are 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 and requires states to collect and report data to CMS for use by Congress in determining whether to extend the increased Medicaid rates beyond CY 2014.