Budget and Appropriations

The Academy's FY 2015 budgetary priorities include, but are not limited to:

• Protecting Medicaid rates, eligibility and optional services
• Protecting the Medicaid Primary Care Fee Uplift and making it permanent
• Sustaining current funding levels for Graduate Medical Education (GME)
• Preserving and increasing funding for the Michigan State Loan Repayment Program (MSLRP)
• The Healthy Michigan Plan, which expands Michigan's Medicaid program to adults with at our below 133% of the Federal Poverty Level (FPL)

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The final 2015-16 budget for the Department of Health and Human Services was signed by the Governor on June 18, 2015.

The $19.562 billion budget funding the Department of Health and Human Services included $485.9 million to cover higher than projected enrollment under the Healthy Michigan plan, as well as $65.4 million for higher caseloads under the traditional Medicaid program. Under the budget, the new Department of Health and Human Services is planning to close or consolidate 15 offices around the state, saving the state $3.2 million.

Items of particular interest to MAFP include, level funding for Graduate Medical Education over FY 14-15; continued funding for the Medicaid Primary Care Fee Uplift, which brings Medicaid reimbursements for certain primary care services up to around 78 percent of Medicare; as well as level funding for the Michigan Primary Care Loan Repayment program. The budget also included mandates to assess the current funding structure of GME and opportunities to expand training for future primary care physicians in Michigan.

Medicaid Provider Rate Increase

Under the Affordable Care Act, states increased their Medicaid primary care provider rates to 100 percent of Medicare rates for certain services performed. The uplift, which was targeted toward primary care physicians, including family physicians, was originally implemented on January 1, 2013 and was fully funded by the Federal government through December 31, 2014.

Congress failed to appropriate federal dollars to continue the increase. Michigan was among a small minority of states that is funding an increase with state dollars, appropriating $33 million in FY 15-16 to maintain provider rates at 78 percent of Medicare rates for certain primary care services.

Inadequate reimbursement for physicians trying to sustain their practices lead to barriers to access for Medicaid patients. If we are striving for better access to a family physician and primary care for all patients, financial incentives must be properly aligned, which is the thrust of this policy. It is particularly critical in Michigan, which is ranked 44th in the country for Medicaid reimbursement rates. Prior to the implementation of this policy, and currently for all other services, Medicaid pays around 55 percent of Medicare payment levels, which is extremely low considering that Medicare only pays 85 percent of physician costs.

For more information, on the Medicaid provider rate increase, click here.