Virginia lawmakers boosted Medicaid payments for primary care. Providers say it’s not enough

MM Curator summary

[MM Curator Summary]: The bump will get rates to 80% of Medicare.


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The increase in funding is part of a larger conversation over how to improve services for low-income patients


An employee of Neighborhood Health, which provides primary care services through multiple health clinics in Fairfax County, administers a COVID-19 vaccine to a pediatric patient. The nonprofit led efforts to vaccinate low-income children in Northern Virginia. (Courtesy of Neighborhood Health)

Virginia’s latest budget includes an additional $82 million to boost Medicaid reimbursements for primary care providers, many still struggling to recover amid the uncertainty of the COVID-19 pandemic.

The move follows years of pushing from doctors, particularly pediatricians and other childhood practitioners, who represent the largest share of providers to participate in Virginia’s Medicaid program, according to Dr. Sandy Chung, a Northern Virginia-based pediatrician and president-elect of the American Academy of Pediatrics.

But the state’s low rates of repayment became particularly acute for many doctors over the last two years, as shutdown orders and general fear over the virus led to plummeting demand for medical services. Chung said she knew of at least one pediatric practice in Southwest Virginia that mostly served children covered under Medicaid and closed its doors during the pandemic.

“They just could not sustain their business, so they had to shut down,” she said. Several locations of her own practice also closed to new Medicaid patients after taking losses on the services they provided for them. 

“Once more than 20 to 30 percent of your patient population is on Medicaid, it’s unsustainable,” Chung added. “So, it’s also creating access issues across the state.”

While increasing reimbursement rates has long been a goal for physician groups, the formation of a statewide task force on primary care in July 2020 jump-started the advocacy process, according to Beth Bortz, president and CEO of the Virginia Center for Health Innovation. Originally formed to meet some of the most pressing needs of the pandemic — including major shortages of personal protective equipment among primary care providers — the group gradually turned to long-term issues including reimbursement and payment models under Medicaid.

Bortz said the additional Medicaid funding in this year’s budget was a significant step forward, especially given that the task force only recently began pulling data comparing Virginia’s spending on primary care with other states and countries. But physicians say it’s still not enough to solve some of the biggest challenges facing primary care. 

Previously, state Medicaid reimbursed providers at 70 percent of the rate offered under the federal Medicare program for primary care services. The $82 million increase will push reimbursement to 80 percent of Medicare payment rates. And while it’s common for states to underinvest public dollars in primary care services, Bortz said, Virginia ranked lower in spending than many other Medicaid programs. On average, states tend to allocate 7 to 8 cents of every dollar spent on health care to primary care, according to analysis from the task force. In Virginia, it’s closer to 3 to 5 cents.

“So, we advocated for this and expected this,” said Dr. Michael Martin, the past president of the Virginia chapter of the American Academy of Pediatrics. “But we would have liked more. The number of us taking Medicaid is still less than it needs to be.”

The ongoing concerns over provider reimbursement is part of a larger debate over the state’s payment structure for primary care under Medicaid — a crucial source of health care coverage for low-income Virginians. The rate of repayment has taken on outsized importance, Chung said, given its impact on workforce and the availability of services to Medicaid patients.

A 2019 survey conducted by VCU researchers for the Virginia Department of Medical Assistance Services found that while 76 percent of doctors report accepting Medicaid patients, nearly a quarter saw fewer than 10 a year. Rates of reimbursement were listed as one of the top three barriers to treating more low-income patients, and the state’s workforce is aging, with 20 percent of physicians older than 65 and only 12 percent under the age of 40.

“The number of people going into primary care is getting smaller and smaller,” Chung said. “Our health care system is set up to reward specialists, and if you’re a medical student graduating with $300,000, $400,000 in debt, there’s no incentive to go into a practice where you may struggle to pay that back.”

But Bortz said that the task force, which will continue for at least another two years, is also focused more broadly on what’s known as value-based purchasing — a reimbursement model that links payments to health outcomes. The federal government, for example, has a program that boosts Medicare reimbursements to certain hospitals for reducing deaths and complications along with operating more cost-efficiently and improving patient experience ratings.

While some commercial insurance companies have experimented with value-based purchasing for primary care services, it’s not consistent across the industry. And Bortz said Virginia’s Medicaid program is still working out how to implement the model, with input from the task force. The goal, for physicians, is a system that would reward primary care practices for expanding services that improve health in the long run. Conducting food insecurity screening and connecting at-need patients with resources is one example, Chung said, along with adding mental health providers to pediatric practices.

In order for that to work, you have to get doctors off the hamster wheel of seeing as many patients as possible.

– Dr. Sandy Chung, a Northern Virginia pediatrician and president-elect of the American Academy of Pediatrics

“We want to encourage providers to accept more Medicaid patients and offer services they know they’ll get reimbursed for,” said Dr. Kristina Powell, current president of the state’s chapter of the American Academy of Pediatrics. “Because if a depression screen is positive, for example, we’re going to spend another 20 to 30 minutes talking with our patient about it.”

So far, there are no concrete plans to change the state’s Medicaid payment structure when it comes to primary care. But Powell said the program doesn’t currently cover multiple social and emotional screenings during the same visit, which can prevent providers from fully assessing patients. It’s also difficult to bill for counseling after screenings, which can significantly increase the time that doctors spend with individual patients.

The state chapter of the American Academy of Pediatrics is advocating for coverage of those services, along with in-office screenings for lead and cholesterol levels — which Medicaid patients are currently required to receive through outside laboratories or hospitals, Powell said. 

In some ways, Chung said the pandemic helped spur the call for change, as the sudden drop in patients highlighted the vulnerability of the current Medicaid payment model. But while many doctors are eager to prioritize more holistic care over higher volumes, she added that it would require equal investment from the state.

“It’s important to answer the big questions like, ‘Oh, if this patient can’t get food, how do we help them get food?'” Chung said. “But in order for that to work, you have to get doctors off the hamster wheel of seeing as many patients as possible to keep their practice open.”


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