The phrase “Medicaid – Medicare Parity” typically draws a blank stare. A recent article by a healthcare attorney, Ericka Adler, described the presumed benefit of Medicaid – Medicare Parity and how one practice got close to going off the edge of a cliff.


The Affordable Care Act contains a provision allowing certain physicians to be paid at Medicare rates for services provided to Medicaid patients in 2013 and 2014.  Those physicians practicing in the areas of family medicine, internal medicine, or pediatrics and who provide at least 60 percent of all their Medicaid services within certain E&M codes are eligible for this so-called “Medicare-Medicaid parity.”

So far, so good. In many parts of the country, Medicaid pays far less than Medicare. So, receiving Medicare rates for Medicaid patients would typically add to the bottom line.

Not so fast. Ms. Adler noted one practice received over $100,000 in increased payments in 2013 based on this parity. This sum was quickly spent on bonuses and expenses. Poof. In April 2014, the practice received a letter letting them know that most of the Medicaid payments subject to the parity payment were ineligible. Poof round two. Apparently, only certain Medicaid programs (those funded under Title XIX) were eligible. Those Medicaid programs funded under Title XXI were not eligible. This state had Medicaid programs funded under both Title XIX and Title XXI. And there was no way to easily determine at the point-of-service which program funded which patient’s plan.

$80,000 had to be returned. And two of the physician-shareholders left the practice year-end 2013 just after receiving their bonuses. The practice had to try to recoup some of that bonus.

What can be learned?

With new programs, be careful about spending all new found cash so quickly. Keep some powder dry.

Further, if bonuses are paid from this pool, make sure there’s a written agreement to “claw back” some or all of the funds that may have been paid out. If doctors leave the group, those doctors remaining should not be penalized further.

There are probably several other lessons to be learned.