After two decades of caring for Medicaid patients, Dr. Aijuan Wang, a pediatrician in Edison, has learned to get creative. She’s found extra funds to cover the cost of vaccines for kids without insurance and partners with a local lab to provide free blood work to undocumented families. When his parent’s divorce threatened to upend care for a boy with chronic asthma, she gave him her cellphone number and called him monthly to make sure he was on track.
“Who gives this kind of service? A provider, a passionate provider,” Wang told members of the Assembly Aging and Human Services Committee Thursday, as she started to cry. “It’s not just paper, data and numbers. It’s a provider,” she said. “And we do have hurdles to deliver this service. It’s not easy.”
For doctors in New Jersey, the largest hurdle may be the relatively low payments they receive for treating patients with Medicaid, the state and federally funded health insurance program, which covers 2.1 million people here including half of the children and roughly one-third of the births. Wang was one of several doctors and policy experts who told the newly formed committee, chaired by Assemblywoman Shanique Speight (D-Essex), how the reimbursements left medical practices that care for Medicaid patients scrambling to keep their doors open.While New Jersey has taken steps to increase the reimbursement rates for maternal health providers, payments for adult primary care here remain lower than in most other states, studies have shown. The state pays half of what Medicare, the federal insurance program for older adults, reimburses doctors for many primary care services, according to a new report from the nonprofit New Jersey Health Care Quality Institute, while the nationwide average is two-thirds. New Jersey also commits less of its health care dollars to primary care than most other states, the report notes, and data collected by physician groups indicates these trends have left doctors here wary of taking on more Medicaid patients.
To strengthen New Jersey’s primary care system, the Quality Institute report calls for the state to embrace advanced primary care, a medical model that puts the patient at the center of an accessible, data-driven team of primary care professionals. This team works to keep patients healthy, manage chronic conditions — including mental health and addiction issues — and reduce visits to urgent care and the emergency room, the report notes.
Lawmakers are being urged to consider legislation to essentially double the state’s rate for many Medicaid primary care services, bringing it on par with the Medicare payments.
“Primary care is the foundation of a high-performing health system,” Tyla Minniear, the Quality Institute’s chief operating officer, told lawmakers Thursday. Effective primary care has been shown to improve health care outcomes, while controlling costs and reducing health inequities, she said, noting that nearly two-thirds of New Jersey’s Medicaid patients identify as people of color.
“Underpaying for health care that covers more racial and ethnic minorities leads to less access, fewer choices, less culturally aligned care and lower quality of care,” Minniear said, adding that boosting the Medicaid rates would help expand the field of primary care providers and, with that, patients’ access to services.
The shortage of primary care providers in New Jersey is not new. A 2019 study found that more than half of the counties were considered primary care “deserts.” But there is limited data on the physician workforce and its diversity.
The Quality Institute’s review of state licensing records found there were roughly 5,300 adult primary care physicians practicing in 2023, including family doctors, general internists and geriatricians. And half of these worked part-time. This count, however, does not include pediatricians or physician’s assistants, nurse practitioners and other primary care providers.
No quick fix
Leaders at the Quality Institute said growing and sustaining the primary care workforce will take time and policy shifts — including the creation of new reimbursement models so that doctors are no longer paid piecemeal for treatment services. But they see increasing New Jersey’s Medicaid rates as an important first step.
The state pays five commercial insurance companies a set amount, per patient, to manage the medical claims for almost all Medicaid patients. These insurers then pay doctors and other providers according to contractual rates that are negotiated based largely on the state-established fee schedule for that service. The fee schedule also dictates what the state pays doctors directly for behavioral health treatments, as well as medical services for the small fraction of Medicaid patients not covered by managed care.While Thursday’s hearing was a listening session devoted to Medicaid, Minniear urged the committee to consider legislation to essentially double the state’s rate for many primary care services, bringing it on par with the Medicare reimbursement. Although new text for the bill (now S-2504) has yet to be made public, a version introduced last year called for primary care, mental health and other providers to be paid at the full Medicare rate for treating all Medicaid patients, regardless of whether they are covered by managed care or not.
Regulatory changes are also needed to create advanced primary care, according to a new report by the New Jersey Health Care Quality Institute.
Josh Bengal, director of government relations for the Medical Society of New Jersey, which represents physicians, told lawmakers the Quality Institute report “hit the nail on the head in how primary care is the best and probably most cost-effective way to ensure that the state’s residents get the care they need and also ensuring that primary care is delivered in the way that it needs to be delivered.” While this would require additional investment up front, he said the value of boosting Medicaid rates is clear over time.
Ward Sanders, president of the New Jersey Association of Health Plans, which represents insurance companies, said his members have not yet taken a position on the latest version of the bill to boost Medicaid rates for primary care. “We don’t oppose and in fact support greater funding to accommodate thoughtful, impactful, and targeted provider rate increases,” he said, in contrast to the highly targeted bills that have recently been enacted to boost rates for specific niche services, like adult medical day care.
The state Department of Human Services, which oversees Medicaid, declined to comment on the current rates. The department is now conducting a study to “address Medicaid rate adequacy related to Medicare and other payers,” according to materials from a stakeholder meeting in January. The department is also testing several alternative, or value-based payment models — which seek to reward providers for good patient outcomes, instead of the number of services they provide — with some of the populations Medicaid serves.
New Jersey is also one of eight states participating in a federal pilot program, Making Care Primary, set to launch this summer. Tom Hester Jr., communications director for the department, said the agency is working with federal officials and the managed care providers to prepare for the program. “Through this model, we aim to support coordinated, comprehensive, high-quality primary care,” he said.The Quality Institute report highlights the Making Care Primary pilot program but notes that more payment-model changes are needed to build a comprehensive system of advanced primary care. This could involve per-patient payments to providers to help them provide holistic care and effective case management, or bonuses to practices that keep their patients healthy. The state also needs to better track primary care spending over time, it notes.
Regulatory changes are also needed to create advanced primary care, according to the report. It calls for streamlining and standardizing metrics, to focus attention on key measures, and better data-sharing with providers, so doctors can find out if a patient fills a prescription or attends a follow-up visit, for example.