Key points of the Medicare/Medicaid Primary Care Payment Parity Rule
Overview:
A provision in the Patient Protection and Affordable Care Act (ACA) requires states to increase Medicaid payment
rates to Medicare levels for primary care services furnished by qualified physicians in CYs 2013 and 2014. This
two year payment increase is federally funded, and on Nov. 6, 2012 the Centers for Medicare & Medicaid Services
(CMS) released a final rule outlining its implementation. This document is intended to help members better
understand the rule.
Who’s eligible?
The rule applies to Medicaid fee-for-service and managed care payments for primary care services delivered by a
physician, or an advanced practice clinician under the personal supervision of a physician, with a specialty
designation of:
1. Family medicine
2. General internal medicine
3. Pediatric medicine
The rule requires that physicians self-attest that they are either Board certified in one of the above specialties.
OR
If not Board certified, (including those Board-eligible, but not certified) qualifying physicians must self-attest that
at least 60 percent of the physicians’ Medicaid codes billed for the most recently completed calendar year (2012 for
2013 pay increase, 2013 for 2014 pay increase) are E&M codes and vaccine administration codes specified in the
regulation (see page 2 for these codes). Please note that state Medicaid agencies are required to review a
statistically valid sample of physicians who self-attest to verify they meet the requirements. (For new physicians,
the 60 percent threshold will be based on claims billed during the prior month).
Managed Care Plans: Qualified physicians who provide care through Medicaid managed care plans also receive
the full benefit of the higher fees, whether the health plan pays them on a fee-for-service, capitation, or other basis.
Non-physicians: The rule defines the primary care services that qualify for the payment increase as those
furnished by or “ under the personal supervision of” a qualified physician. Therefore, services provided by advance
practice clinicians, such as a physician assistant (PA) may qualify for the fee increase, but only if they operate
under a qualified physician’s supervision. These services do not have to be billed under the physician’s Medicaid
number, but the physician must oversee or take professional responsibility for them.
Exclusions: Physicians delivering primary care services at Federally Qualified Health Centers (FQHCs) and Rural
Health Clinics (RHCs) are not eligible for increased payments. Additionally, neither pharmacists nor independently
practicing nurse practitioners or other non-physicians qualify.
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What about subspecialists?
This rule also provides for higher payment for related subspecialties as recognized by the American Board of
Medical Specialties (ABMS), American Osteopathic Association (AOA) and the American Board of Physician
Specialties (ABPS). Lists of specialists and subspecialists can be found on their websites, and are listed below:
Family subspecialties:
Adolescent Medicine
Geriatric Medicine
Hospice and Palliative
Medicine
Sleep Medicine
Sports Medicine
Addiction Medicine
Adolescent/Young
Adult Medicine
Geriatric Medicine
Sports Medicine
Undersea and Hyperbaric
Medicine
Hospice and Palliative
Medicine
Sleep Medicine
Internal subspecialties:
Adolescent Medicine
Advanced Heart Failure and
Transplant
Cardiology
Cardiovascular Disease
Clinical Cardiac
Electrophysiology
Critical Care Medicine
Endocrinology, Diabetes and
Metabolism
Gastroenterology
Geriatric Medicine
Hematology
Hospice and Palliative
Medicine
Infectious Disease
Interventional Cardiology
Medical Oncology
Nephrology
Oncology
Pulmonary Disease
Rheumatology
Sleep Medicine
Sports Medicine
Transplant Hepatology
Pediatric subspecialties:
Adolescent Medicine
Child Abuse Pediatrics
Developmental-Behavioral
Pediatrics
Hospice and Palliative
Medicine
Medical Toxicology
Neonatal-Perinatal Medicine
Neurodevelopmental
Disabilities
Pediatric
Allergy/Immunology
Pediatric Cardiology
Pediatric Critical Care
Medicine
Pediatric Emergency
Medicine
Pediatric Endocrinology
Pediatric Gastroenterology
Pediatric HematologyOncology
Pediatric Infectious Diseases
Pediatric Nephrology
Pediatric Pulmonology
Pediatric Rheumatology
Pediatric Transplant
What primary care services are eligible for higher payment?
E&M codes 99201 through 99499 and CPT vaccine administration codes 90460, 90461, 90471, 90472,
90473, and 90474 or their successors are eligible.
The rule also provides higher payment for the following E&M codes that are not reimbursed by Medicare:
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
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Patient/Initial Comprehensive Preventive Medicine--codes 99381 through 99387;
Established Patient/Periodic Comprehensive Preventive Medicine--codes 99391 through 99397;
Counseling Risk Factor Reduction and Behavior Change Intervention--codes 99401 through
99404, 99408, 99409, 99411, 99412, 99420 and 99429;
E&M/Non Face-to-Face Physician Service--codes 99441 through 99444.
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How does a physician self-attest?
Physicians are required to self-attest that they are eligible for the increased payment to their state
Medicaid program. The process for self-attesting is determined by state Medicaid agencies and qualified
physicians should contact their state Medicaid agency for further information on this process.
When can I expect payment?
CMS stated in the final rule that to ensure physicians receive the benefit of higher payments in a timely
manner, “payments should be made no less frequently than quarterly.” States can, for example, make
higher Medicaid payments as add-ons to their existing rates, or as lump-sum payments. For more
clarification on payment, please contact your state Medicaid agency as they will be the best resource for
additional inquiries regarding payment.
What are some other payment factors?
For the purposes of calculating the payment, the state must exclude incentive, bonus and performancebased payments but must include supplemental payments for which the approved methodology is linked
to volume and payment for specific codes.
Minimum Rate: Primary care services that qualify for this payment increase will be paid, at minimum, at
the current Medicare fee schedule amounts or, if greater than the current amounts, the amounts would be
calculated using the 2009 Medicare conversion factor.
Site of Service: States do not need to make site of service adjustments but may reimburse all codes at the
Medicare office rate, as opposed to the facility rate. Please contact your state Medicaid agency for
questions regarding site of service adjustments.
Geographic Adjustments: States must either make all the appropriate geographic adjustments made by
Medicare, or may develop a rate based on the average overall counties for each of the E&M codes
specified.
Managed Care Arrangements: CMS did not prescribe a uniform approach that all states must use to
implement the fee increase in the managed care environment. Instead, states are required to submit
“reasonable methodologies” for:
1. Identifying what managed care plans’ payments to qualified physicians would have been for the
ACA primary care services as of July 1, 2009
2. Identifying the differential between those 2009 baseline provider payments and the amount
needed to comply with the fee increase
The rule requires that managed care plans pay qualified physicians the full benefit of the rate increase.
State contracts with managed care plans must require the plans to pay physicians, whether directly or
through a capitated arrangement, and to provide adequate documentation to allow the state and CMS to
ensure that the physicians receive proper payment.
Dual Eligibles: States are required to pay qualified physicians serving dual eligibles the full Medicare
20% coinsurance in 2013 and 2014.
For more information please contact your state Medicaid agency or MGMA Government Affairs at
govaff@mgma.com .