Provider Rights to Primary Care Enhanced Payments Under the ACA in Question

by John W. Kaveney

Section 1202 of the Healthcare Education and Reconciliation Act of 2010 amended the Affordable Care Act to mandate an increase in Medicaid primary care service payment rates for 2013 and 2014. These enhanced payments were intended to lure more providers into primary care, thereby increasing access to such services for Medicaid beneficiaries.

Despite no clear directive in the statute or implementing regulations, some Medicaid managed care organizations (MCO) have taken the position that the enhanced payments must be paid directly to the rendering provider, be it a physician, nurse practitioner, physician’s assistant or the like. Some MCOs have even requested that providers sign attestations “certifying” that the payments will be allocated in this manner.

This has created confusion for group providers who employ physicians that have signed employment agreements requiring all revenue derived from professional activities be assigned to the group. CMS has provided no official position, except to reiterate that the intent of the statute is to insure that the enhanced payment does not stay with the state Medicaid agency or the MCO.

In response to a comment submitted about a salaried physician working for a county provider, CMS indicated that “the physician must receive the increased payment” but that “[i]f, as a condition of employment, the physician agrees to accept a fixed salary amount then we expect an appropriate adjustment to the salary to reflect the increase in payment.” This, however, fails to address the most common circumstance where the physician has assigned all fees to the provider pursuant to an employment agreement.

Group providers should be sensitive to the potential exposure these enhanced payments could create given the lack of a clear directive either in the law or by the federal and state agencies.