The Importance of Medicaid Parity For Primary Care

The politics of Medicaid are robust and complicated.  However, the complexity of the issue shouldn’t prevent Medicaid patients from receiving timely and quality health care services – especially primary care.  Supporting access to efficient, cost-effective primary care for over 62 million Medicaid patients is why Congress should extend Section 1202 of the Affordable Care Act (ACA), also known as “Medicaid parity.”

Historically, Medicaid reimbursement rates have been approximately 30 percent lower than Medicare rates for the same services. For primary care services specifically, that difference was even more severe prior to implementation of Section 1202, with Medicaid paying just 59 cents on the dollar relative to Medicare, according to the Kaiser Family Foundation. Unfortunately, poor payment rates negatively impacted access for patients.  According to HealthPocket, only 43 percent of physicians and 20 percent of PAs and NPs accept Medicaid.  These percentages are higher for family medicine (68%), but still insufficient to meet the growing patient population.

The Medicaid parity provision requires that Medicaid compensate primary care physicians, defined as family medicine, general internal medicine, and general pediatrics, at 100 percent of Medicare payment rates for a defined set of primary care services. While it is too early to measure the impact of this policy, we do know that there is a direct correlation between payment rates and participation in the Medicaid program.  For example, in 2005 Kentucky participation rates rose 36 percent as a result of an increase in Medicaid payment rates.  There also are occurrences of participation rates dropping as a result of a reduction in Medicaid payment rates.  We also are starting to learn that access to primary care physicians has a positive impact on the overall health care spend for Medicaid programs.  The Medicaid and CHIP Payment and Access Commission (MACPAC), in their July 2014 MACfacts, found “higher ED [emergency department] use by Medicaid enrollees when they have difficulty accessing their regular doctor and other appropriate settings” and they also note that “expanding the availability of primary care could lead to more efficient use of the ED.”

Based on these historical indicators and recent findings, I believe this is one of the more important policies aimed at expanding access to care, improving the overall quality of care provided and controlling growth in the overall costs of health care for governments.  However, this provision is set to expire on December 31.  At that time, Medicaid beneficiaries’ access to timely and quality health care will be thrown into jeopardy.

Let me explain why this provision so important.  Decades of research has shown that patients who have health care coverage and a usual source of care have better outcomes than those who lack one or both.  This policy takes the necessary steps to ensure that health care coverage is met with access to primary care physician services by enabling primary care physicians to accept more Medicaid beneficiaries into their practices. In other words, it makes health insurance a tangible benefit for millions of Medicaid beneficiaries and not health care coverage in name only.

The United States excels in the science of medicine and leads the world in the development of breakthrough medical technologies and treatments. So why do our overall health outcomes lag so far behind other industrialized nations? I would argue that the answer to those questions begins with primary care. The Commonwealth Fund’s 2014 study “Mirror, Mirror on the Wall, 2014 Update: How the U.S. Health Care System Compares Internationally” demonstrates that countries with stronger primary care systems are associated with improved population health care including reductions in all-cause mortality.

But, what exactly is primary care?

Barbara Starfield, MD in a 1994 Lancet article defined primary care as “first-contact, continuous, comprehensive, and coordinated care provided to populations undifferentiated by gender, disease, or organ system.”  This definition is nearly identical to that of the Institute of Medicine.

There have been suggestions made that Medicaid parity should be expanded to include all physicians and not be limited solely to primary care.  Given our current fiscal reality, however, financial incentives must be carefully aligned with the most pressing needs of the population. While it is true that a number of physician specialties provide some primary care services, it is difficult to classify the delivery of “primary care services” equal to the delivery of truly comprehensive and continuous primary care as defined above.  Congress recognized the importance of patient access to primary care physicians when they included the Medicaid parity provision in ACA and the original legislative language clearly demonstrates that Congress was aiming to expand access to primary care physicians for Medicare patients.

In July, there were a number of bills introduced that would extend this policy.  Each of these bills is important in that they recognize the importance and value of this policy to patients.  Extending this policy is both advisable and appropriate and aligns with decades of research that demonstrates the value of comprehensive primary care to patients and the Medicaid program.  While the debate over Medicaid is surely to continue for the next several years, Congress should act to provide those individuals who rely on Medicaid as their health insurer access to continuous and comprehensive primary care physician services.


Shawn Martin is the Vice President of Practice Advancement and Advocacy at the American Academy of Family Physicians




Morning Consult