Member Alert: Medicaid Rate Cuts

As the dust settled on the Ohio budget for fiscal year 18/19, there was a potential Medicaid budget shortfall over the next two years of approximately $1.3 billion.  According to the Kasich Administration, this shortfall was a result of House/Senate assumed budget savings from hospital and nursing home rate reductions that ultimately were unrealized.  As a result of this projected shortfall, the Ohio AAP was told this could necessitate a 5- to 7% across–the–board cut in Medicaid provider rates, including the physician fee schedule.

Over the last few months, Medicaid has worked with potentially impacted providers and organizations representing them, including the Ohio AAP, to develop a proposal to close the Medicaid funding gap. We are pleased to report that the Medicaid physician fee schedule will NOT be impacted by the Administration’s proposal to close this funding gap.

Instead, to avoid the shortfall, the Kasich Administration will implement a 5% cut to hospital inpatient/outpatient services, will increase the Medicaid Managed Care Organization (MCO) withhold by 2% and synchronize the Medicaid FFS/MCO payment schedule.  Additionally, nursing homes will not receive their legislatively approved rate increases as Governor Kasich vetoed that language from the budget.

One other item of note, the Administration has proposed to partially continue the Comprehensive Primary Care (CPC) pilot program ($106M over two years).  The program will continue for existing participants and others that meet the initial qualifications (more than 5,000 Medicaid patients and national certification), but, at this point, won’t be expanded to smaller practices. It is our hope that after the pilot phase is complete, the results will be positive and they will be able to expand eligibility to smaller practices.

While the hospital cuts are concerning, the Ohio AAP is appreciative of the Administration’s recognition of the hardship that would have been created had the physician fee schedule been cut. We are also appreciative of the restoring of the CPC program.

We will continue to monitor this issue over the coming months and will keep you apprised of any new developments.  In the meantime, feel free to contact Melissa Wervey Arnold, Ohio AAP CEO, at or 614-846-6258 with any questions or comments.

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