Information provided courtesy of The Medical Society of Virginia's Governmental Affairs Department. www.msv.org

Medicaid Inflation Factor

Issue Background

Physicians treating Medicaid recipients are currently reimbursed well below their cost of providing care,

forcing many to no longer accept Medicaid patients and others to close their practices. Physicians with

specialties in obstetrics, pediatrics and emergency medicine have been particularly hard hit by these

inadequate reimbursement rates.

Health care is a major concern among Virginians. They support increases in funding for health
care programs such as Medicaid that serve children, the elderly and the disabled. The public
realizes that adequate Medicaid reimbursement for physician services ensures the availability of
providers to treat the neediest of our citizens.

Although the Commonwealth has made efforts to increase physician Medicaid rates in specific
areas of service areas, there has never been an effort to achieve a long-term stable solution for
physicians.

Solution

• VACEP, in cooperation with the MSV, will pursue legislation and seek an inflation update

for all physician services starting in fiscal year 2007/2008. The cost to this will be $9.5 million from the state’s
general fund.

• The absence of a Medicaid inflation update for physician services has seriously eroded
  rate adequacy and created a significant and growing access to care challenge for
  Virginians who participate in the Medicaid program.
  
• An inflation factor is not a new concept; Virginia’s hospitals and nursing homes receive a
  Medicaid inflation adjustment annually.
  
• Health care funding must become a priority for state government just like elementary and
  secondary education, transportation and public safety