Medicaid Cut to Physicians a Year Overdue

Averting Rate Cuts and Medicaid Reform will lead NCMS’ Legislative Agenda in 2015

Nearly a year after the General Assembly directed Medicaid to cut physician rates by 3 percent, medical practices across the state are still bracing for impact. That’s right, the cut originally scheduled for January 1, 2014 has still not been implemented, and NCTracks is again the reason for the delay. And while avoiding a rate reduction for an entire year may sound like good news, it isn’t.

Here’s why: Medicaid and CSC have repeatedly delayed the implementation of this reduction in favor of other projects. Those delays now mean that for Medicaid to comply with the General Assembly’s directive, physicians will have to be cut both retrospectively and prospectively. The retrospective implementation will require a massive claims reprocessing effort in which 3 percent of the Medicaid payments received by many physicians* since January 2014 will be taken back. Physicians also will see payment rates permanently reduced 3 percent going forward. So just because the cuts haven’t been implemented yet – a year later – doesn’t mean they never will be.

* The 3 percent reduction will not affect physicians who received enhanced ACA payments from Medicaid in 2014. The 3 percent cut will apply to those physicians in 2015, however.

When will these cuts take effect?

The only date shared with NCMS so far is February 15, 2015. This is when the prospective part of the rate cut is scheduled to take effect. But this date has been delayed many times already, and it could change again. Given the significant risk of administrative and financial disruption that this presents for medical practices across the state, NCMS will continue to provide updates on the timing of this cut.

Then There’s Another 1 percent

On top of the 3 percent cut, the General Assembly also passed an additional 1 percent cut effective January 1, 2015.  Currently there’s no information available from Medicaid or CSC about when that reduction will be implemented, either. NCMS is fairly confident, however, that it will NOT be implemented on January 1, nor before the 3 percent cut is implemented.

Our Focus in the 2015 Session of the NC General Assembly

When the legislature convenes for its long session on January 15, the outright repeal of the 3 percent and 1 percent rate cuts will be an NCMS priority issue. The harm these accumulated reductions will do to our strong network of Medicaid providers must be prevented.

Description of Payment Rate Reduction Affected Claims Effective Date Established by Law Actual NCTracks Implementation Date Additional Notes
3% cut prospective All claims with dates of service of Feb. 15, 2015 and later Jan. 1, 2014 Feb. 15, 2015
3% cut retroactive Jan. 1, 2014 dates of service through implementation date of prospective cut Jan. 1, 2014 Not yet announced (definitely after Feb. 15, 2015) Cut will not apply to PCPs receiving special ACA payment rates in 2014
1% cut prospective Jan. 1, 2015 Not yet announced (definitely after Jan. 1, 2015)
1% cut retroactive Jan. 1, 2015 dates of service through  date of prospective cut Jan. 1, 2015 Not yet announced



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1 Comment

  • Question about Medicaid “Rates”…
    As 1/1/15 draws near, I am worried about the State’s plan to reduce pay to 4% less than 2012 (which is essentially 2002 rates) – which means they will be rolling us back 13 years and then 4% less!
    I am not sure how that makes sense.
    I found the SPA that discusses the change and I am curious of your take on this part:

    “SFY 2014 – Rates will be frozen at the rate in effect June 30. 2013. Effective Jan 1.2014 rates will be adjusted such that they will equal 97% of the rate in effect July 1, 2013. ACA physicians who have attested as being a primary care physician under Section 1202 of the Affordable Care Act shall be excluded from this reduction until January 1, 2015. at which time their reimbursement will be at 97% of the July I, 2013 rates. There will be no further annual adjustments this stale fiscal year except that Medicaid rates may be adjusted downward in accordance with the current year’s downward adjustments to the Medicare fee schedule.”

    Why would they have picked 7/1/13 as the base rate ? We were actually paid on two rate tables on 7/1/13 – ACA and Non-ACA rates. They could have picked 12/31/12 which would not be ambiguous at all – but they did not.

    CMS approved SPA plans have the weight of State Law. This SPA says we are to be paid based on the rates in effect 7/1/13. But I was paid on ACA rates then – does that mean we could win a court argument that ACA physicians should be paid at 97% of the 7/1/13 ACA rate? We were absolutely paid by the state from a rate table published on the DMA web site in force 7/1/13. I know some non-ACA docs are probably wondering why we are whining, but this will be a HUGE hit to pediatrics! The majority of NC practices who take Medicaid have fewer than 500 and most of those have dual coverage. My pediatric group of 9 pediatricians has 6,000! We are facing a 24-26% rate cut in 2 weeks. This is not going to be pretty…….