Medicaid Primary Care Reimbursement Rate Increase Proposal Included in Budget Negotiations

April 29, 2022 - As is customary this time each year, the state budget-building season in the Michigan Legislature is in full swing. Following the release of Gov. Gretchen Whitmer’s Fiscal Year 2023 executive budget recommendation in February, appropriations work is underway in the House and Senate.

The Governor’s recommendation included a 4.6% gross/11% general fund increase over the FY 2022 budget. Of primary significance to the family medicine community was the inclusion of increased funding for Michigan State Loan Repayment Program expansion, so more applications could be funded to bolster the primary care workforce in medically underserved areas and to include behavioral health professionals as eligible program participants.

Over the past two weeks, the Appropriations Subcommittee in each chamber passed its Michigan Department of Health and Human Services budget. Then, earlier this week, the full Appropriations Committee in both the House and Senate finalized their department budgets for the entire chamber’s consideration, which is expected to take place next week.

Senate Proposal

The Senate’s budget proposal includes line items for MAFP’s funding priorities. In addition to $6.4 million for the MIDOCS residency program and $3.5 million for the Michigan State Loan Repayment Program (far shy of the Governor’s proposed $25 million in additional funding for program expansion to include behavioral healthcare professionals as eligible participants), the Senate Appropriations Committee recommends $15 million in general funds to increase Medicaid reimbursement rates for certain primary care services.

The rates would increase at the greater of either the actual rates paid during the previous fiscal year or at least 95% of the Medicare rate received for the services on the date the service is provided. The current procedural terminology (CPT) codes that would be eligible for this reimbursement rate increase are 99202-99205, 99211-99215, 99381-99387, 99391-99397, 99421, 99422, 99423, 99441, 99442, and 99443.

“A Medicaid primary care rate uplift is something the Academy has been advocating for quite some time, and was a priority topic of discussion between family physicians and lawmakers during Michigan Family Medicine Advocacy Day on March 23. It is an essential tool for not only guaranteeing primary care physicians are fairly paid, but also for ensuring family physicians can care for Medicaid beneficiaries, thus increasing access to care for some of the most vulnerable Michiganders,” said Matt Black, MAFP Director of Government Relations.

The Senate committee also proposes $7.6 million for a rural independent primary care pilot that aims to ensure the sustainable operation of physician practices in medically underserved areas of the state. This funding would be awarded through grants and only to practices in counties with a population of less than 40,000. No more than $500,000 could be provided to practices in any one county.

Lastly, $3 million is proposed for establishing a new residency program at Honor Community Health, a federally qualified health center serving under-resourced Oakland County residents.

House Proposal

The House Appropriations Committee’s budget proposal came in a bit higher than the Senate’s but still under Gov. Whitmer’s recommendation. The House line-item for the Michigan State Loan Repayment Program, like the Senate, maintains the same level of funding ($3.5 million) as FY 2022.

The House proposal does not include funding for the Medicaid primary care reimbursement rate increase proposed by the Senate. It does, however, require the Michigan Department of Health and Human Services to assess Medicaid reimbursement rates to associated Medicare reimbursement rates and provide a legislative report.

Revenue Estimating Conference May 20

On May 20, the State Treasurer and directors of the Senate Fiscal Agency and House Fiscal Agency will convene for the Consensus Revenue Estimating Conference. The primary purpose of this conference is to revise previous revenue forecasts for fiscal years 2022, 2023, and 2024. Targets for the House and Senate FY 2023 budget proposals will also be set, teeing up further negotiations between the two chambers and the executive branch.

A conference committee consisting of House and Senate leaders will then be appointed to negotiate differences between the chambers’ budgets. This will result in a final FY 2023 state budget for legislative passage and Gov. Whitmer’s approval. She may veto any line items that she chooses.

Throughout the process, MAFP continues to represent the interests of family physicians through the lens of patient health outcomes and access to care, family medicine practice viability and sustainability, and preserving the physician-patient relationship.