A hallmark of the Affordable Care Act is increasing the number of Americans covered by health insurance. Three of the main ways of accomplishing that are the expansion of the Medicaid system, the individual mandate to purchase health insurance, and the availability of tax credits to help purchase insurance for persons earning less than 400 percent of the poverty level. In 2012-13, 400 percent of the poverty level is $44,680 for an individual and $92,200 for a family of four.
With these initiatives, approximately 32 million more people will be covered by health insurance by 2014. In addition, a growing number of Americans are reaching Medicare age, and their health care needs are greater than those of Americans in younger age groups. The Census Bureau projects that in the next 10 years there will be a 36 percent increase in the number of Americans over 65.
Shortage of 62,900 in 2015
The growth in the number of people covered by public and private health insurance means an increased need for health care providers. The Association of American Medical Colleges estimates that there will be a shortage of 62,900 physicians in 2015 and a shortage of 91,500 physicians by 2020—about half in primary care.
Health care policy analysts generally recommend that between 40 and 50 percent of the physician workforce provides primary care. In recent years, the proportion of primary care physicians is 32 percent according to a 2010 report from the Department of Health and Human Services Council on Graduate Medical Education (COGME).
To increase the number of primary care providers, the Affordable Care Act seeks to attract more providers to primary care by increasing Medicaid payments to 100 percent or more of Medicare rates. Physicians eligible for the increased payments are family physicians, pediatricians, internists and certain subspecialists.
Eligible physicians need to be board certified in one of the designated primary care specialties or attest that at least 60 percent of the Medicaid codes they billed in the previous calendar year were for primary care codes specified by the Affordable Care Act and its regulations. Obstetricians and gynecologists do not qualify for the increased rates, even though they provide primary care.
The increased rates for primary care include payments for work done by advanced practice nurses and physician assistants if they are operating under the supervision of a physician, but the higher rates are not available if the nurses or physician assistants are working independently.
Payment impact varies by state
The impact on pay for primary care physicians will vary significantly from state to state since currently each state sets its own reimbursement rate. Nationwide, in 2012 the average fees for Medicaid physicians were 66 percent of the Medicare rates according to a survey commissioned by the Kaiser Family Foundation.
The lowest rate was in Rhode Island (58 percent of Medicare rates); the highest rate was in Alaska (242 percent of the Medicare rates). The foundation said that, on average, Medicaid fees for primary care services will rise by 73 percent. A state-by-state summary of the new Medicaid physician fees is available online at kff.org/medicaid/upload/8398.pdf.
The cost of raising primary care Medicaid rates for 2013 and 2014 is estimated to be $11.9 billion—a cost that will be borne fully by the federal government. The Accountable Care Act does not specify what happens to the rates after 2014. If the rates drop or if the federal government tries to shift a significant amount of the added costs to the states, the program may be less successful in securing the services of primary care physicians willing to accept Medicaid patients.
To help meet the need for more physicians, 18 more medical schools are being established. The Association of American Medical Colleges reports there will be an additional 7,000 graduates every year for the next decade.
Currently, however, there is not a plan for a corresponding increase in the number of residency positions paid by the Medicare system. The federal government through the Medicare program (and, to a lesser extent, the Medicaid program) has been the primary funder of graduate medical education (GME)—paying $11.5 billion per year to more than 1,000 hospitals at a cost of about $100,000 per resident per year.
Another U.S. government agency in the Department of Heath and Human Services—the Health Resources and Services Administration—also is working to increase the supply of primary care physicians. In February, the Health Resources and Services Administration announced it was making a $4 million grant to the Wright Center for Graduate Medical Education in Scranton, Pa., and the A.T. Still University of Health Sciences’ School of Osteopathic Medicine in Mesa, Ariz., to train osteopathic residents in primary care.
During the first year, the program is expected to place 29 residents in community health centers in medically underserved areas throughout the country (not just in Pennsylvania and Arizona). Dr. Thomas McWilliams, associate dean for graduate medical education at ATSU, said that currently, more than half of the available seats are unoccupied for the July 1 start date, but he expects more applications to be made after the allopathic match in March. For more information on the program, see news.atsu.edu/index.php/archives/1561.
Conflicting policies on paying for GME
Graduate Medical Education is caught between conflicting policy goals. On the one hand, there are calls for increased funding, particularly for primary care training programs. The Association of American Medical Colleges has recommended a 15 percent increase in GME positions (4,000 per year) to meet growing health care needs.
On the other hand, the cost of GME is considered by many to be excessive. The number of residency slots has been capped at 1996 levels, although some exceptions have been made, and the Accountable Care Act provides for a moderate increase of 300 physician training positions per year. The political pressure to avoid further increased deficits makes it difficult to obtain increased funding for GME. Congress and the White House have not developed a unified plan to handle the issue.
The Institute of Medicine, part of the National Academy of Sciences, is studying the issue of GME and how best to align financing with the needs of the public for the health care workforce. The Institute’s report is due in 2014. Among the issues that will be considered will be the appropriate level of funding for teaching hospitals and proportion of funding for teaching hospitals versus community-based clinics and health centers. Recruitment of physicians, particularly for primary care, also could be increased by more use of medical school scholarships and loan forgiveness programs.
Jeff Atkinson (JAtkin747@aol.com) teaches health care law at DePaul University College of Law in Chicago.