This document discusses recent federal investments in Medicaid primary care and opportunities for states to leverage these investments. It outlines initiatives like the primary care rate increase, health homes, and accountable care organizations that provide funding for services. The document urges working in partnership with Medicaid to help design and implement these initiatives, engage providers, measure returns on investment, and identify physician champions to sustain the investments and strengthen primary care.

1. Medicaid Investments in
Primary Care: Fitting The
Pieces Together
AAFP 2011 State Legislative Conference
November 4, 2011
Dianne Hasselman
Director, Quality and Equality, CHCS
www.chcs.org

2. CHCS Mission
To improve health care quality for low-income children and
adults, people with chronic illnesses and disabilities, frail
elders, and racially and ethnically diverse populations
experiencing disparities in care.
Our Priorities
► Enhancing Access to Coverage and Services
► Improving Quality and Reducing Racial and Ethnic Disparities
► Integrating Care for People with Complex and Special Needs
► Building Medicaid Leadership and Capacity
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3. Medicaid Fast Facts
60 million People in the United States with Medicaid coverage.
$427 billion Projected Medicaid spending for FY 2010.
16 - 20 million Additional Medicaid/CHIP beneficiaries by 2019 due to health reform.
41% Births in the United States covered by Medicaid.
28% Children in the United States covered by Medicaid.
50% Medicaid beneficiaries under 65 who are from diverse racial/ethnic groups.
5% Medicaid beneficiaries accounting for 57% of total Medicaid spending.
49% Medicaid beneficiaries with disabilities diagnosed with mental illness.
27% Total mental health care costs financed by Medicaid.
$4 billion Estimated costs for children in foster care covered by Medicaid.
71% Medicaid recipients who are enrolled in managed care.

4. Challenges Facing Medicaid in 2011
• Overwhelming and dire budget situation
• We’re not through the worst of it
• Loss of leadership and staff through early
retirement, hiring freezes, and furloughs
• Low morale, loss of historical knowledge
• Political conflict around implementation of health
care reform
• Federal mandates, state lawsuits, 2014 approaching
quickly
• In the midst of all this, unprecedented opportunities
and funding for Medicaid transformation
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5. Federal Investments in Medicaid Primary
Care
• Primary care rate increase or “bump”
• Health homes and community health teams
• Medicaid preventive care incentives
• Payment demonstrations (Pediatric ACOs and
bundled payment)
• Health information technology and meaningful
use
• Medicaid adult core measurement set
• Comprehensive Primary Care initiative
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6. Section 1202: PCP “Bump”
• In 2013-2014, Medicaid will reimburse primary
care providers
• Infuses up to $8.3 billion in Medicaid primary
care, funded entirely by the federal government
• Applies to physicians practicing in family
medicine, general internal medicine, and
pediatric medicine
• Covers evaluation & management codes
covered by Medicare and child and adolescent
immunizations
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7. Section 2703: Health Homes
• Six new care management/coordination services for
eligible Medicaid beneficiaries
• State participation is optional
• Timing is flexible
• Funding for services is an enhanced – but time limited
– 90/10 federal-state match
• Chronic conditions and geographic locations can be
targeted, phased in
• Focus on integration of physical and behavioral health
care
• Related to, but not the same as, medical home
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8. Accountable Care Organizations
• Medicare shared savings program for
accountable care organizations regulations
released April 2, 2011
• Medicaid pediatric demonstration scheduled for
2012-2016
• Center for Medicare and Medicaid Innovation
opportunities
► Pioneer ACO model opportunity
► Significant state interest in exploring ACOs
► Utah, New Jersey, Maine, Colorado, etc.
► Dr. Jeffrey Brenner’s “hot spots”

9. Comprehensive Primary Care Initiative
• New and competitive initiative by Center for
Medicare and Medicaid Innovation (CMMI)
• CMS to pay care management fee to
participating practices for Medicare fee-for-
service beneficiaries
• PMPM average: $20 Years 1/2; $15 Years 3/4 with
shared savings opportunity
• CMS will fund 100 percent of additional
reimbursement for new or enhanced primary
care services for Medicaid fee-for-service
beneficiaries
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10. Medicaid Leveraging Federal and State
Investments
• Build capacity for Medicaid expansion in 2014
• Invest in primary care delivery
► Leverage new federal dollars, repurposing existing
funds
► Push accountability out towards the point-of-care
• Maximize impact of opportunities by creating a
coherent strategy for Medicaid transformation
► Link, align or “nest” Medicaid initiatives
► Align activities with other payers
• Create stepping stones to a more effective,
accountable health are system
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11. Primary Care Leveraging Medicaid
Investments
• Work in partnership to help Medicaid design and
implement new primary care initiatives
• Outreach to Medicaid director and medical director in
organized way
• Engage in Medicaid medical home initiatives,
encouraging involvement by smaller practices
• Work with Medicaid to measure the return on
investment of efforts – this is the opportunity to
sustain investments
• Identify physician champions for Medicaid
• Above all, resist the temptation to retreat or withdraw
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12. Visit CHCS.org to …
• Download practical resources to improve the quality and
cost-effectiveness of Medicaid services.
• Subscribe to CHCS eMail Updates to learn about new
programs and resources.
• Learn about cutting-edge efforts to strengthen and
invest in the primary care infrastructure for the Medicaid
program.
www.chcs.org
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