Gov. Ralph Northam is redirecting $30 million in state funds to pay for a 29% increase in Medicaid rates paid to primary care doctors, pediatricians and other health care providers who are struggling to survive the economic fallout from the coronavirus pandemic.
Northam is making the rate increase retroactive to March 1, using money that had been budgeted for Medicaid managed care organizations to pay for nonelective surgeries and other medical services that were canceled or curtailed because of the spread of COVID-19.
“By taking this action to support these frontline providers, we can ensure access to care for our Medicaid members and preserve the health care network that is so critical for the well-being of families, children, low-income older adults, persons with disabilities, and individuals who have lost their jobs,” said Karen Kimsey, director of the state Medicaid office.
Northam already has used a similar approach to pay for a $20 daily state rate increase for Medicaid patients in nursing homes. He recently increased it by $7 a day per member for a total of $810 per patient each month. The increase was part of a $226 million package of federal and state relief for nursing homes the governor announced on June 19.
The new emergency funding for primary care doctors and other providers will attempt to bolster medical professionals who treat Medicaid patients. State officials estimate more than 450 providers have closed their practices during the crisis, at least temporarily, because patients have delayed routine care.
The Department of Medical Assistance Services, which runs the Medicaid program in Virginia, said office visits for “evaluation and management” of chronic medical conditions and other health care have declined by 35% to 40% during the public health emergency that began in Virginia in early March.
The Centers for Medicare and Medicaid Services, which runs Medicaid nationally, recently gave states permission to keep some unspent Medicaid dollars to direct managed care insurance companies to pay providers to help in the coronavirus crisis.
“This assistance for our providers is a wise investment that allows much needed public dollars to stay in Virginia and support our critical health needs rather than returning those funds to the federal government,” said Deputy Secretary of Health and Human Resources Vanessa Walker Harris in the state announcement of the new funding.
State Medicaid officials had hinted at the initiative during a presentation to the Senate Finance and Appropriations Committee last week.
Northam also has relied on savings on services provided through Medicaid managed care companies to pay for the state rate increase for nursing homes, which have borne the brunt of deaths from COVID-19 during the crisis.
The General Assembly approved the payment of $20 per patient per day on April 22. By June 19, Medicaid had paid about $21 million in higher rates, but $18.3 million came from managed care companies that pay for services on a per capita daily rate.
The governor increased the rate by $7 per patient per day to help pay for weekly testing of nursing home patients as facilities prepare to gradually reopen to outside visitors. Medicare will pay most of the cost of testing, the state said.
Deputy Secretary of Finance Joe Flores said Tuesday that continuing the enhanced nursing home rate in the next four months will cost $92 million, including about $41 million in state and federal Medicaid funds, as well as other sources of federal coronavirus relief.
Northam’s nursing home package also includes a new payment of $80 per patient per day to respond to COVID-19 outbreaks in nursing facilities and $33 million to help pay for weekly testing of staff.
The governor separately included $20 million in emergency relief to assisted living facilities, which also have suffered extensive COVID-19 outbreaks and deaths. Those facilities are licensed and regulated by the Department of Social Services and do not receive funding through Medicaid or Medicare.