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Targeted Rate Increase

As part of the Fiscal Year 14-15 budget the Department requested a 1% provider rate increase that would apply to all eligible providers effective July 1, 2014, pending federal approval. 

The JBC increased this amount, approving a 2% provider increase for all eligible providers, with a 2.5% increase for DIDD providers.  In addition, the Department requested a 0.5% rate increase to be targeted to specific providers, codes and specialties. The JBC has approved this 0.5% increase, which funds a series of targeted rate increases to specific providers, codes and specialties. A Fact Sheet listing the approved increases is available for your review here.

These increases are intended to address large inequities in rates and to demonstrate the Department’s priority to pay for services that provide high value for clients. The Department thanks all providers and other stakeholders who participated in its Request for Input.  This stakeholder process was important not only to inform the increases forwarded for JBC approval this year, but to help the Department identify areas where we can create value and access for our clients in the future.

We acknowledge that 0.5% is not a solution for our providers, but it is another step in a larger process of shifting payments toward paying for value rather than volume.  While we recognize that across-the-board increases are important, they do continue to incentivize volume in a Medicaid system that is shifting to pay for value over volume.  If we spread out the 0.5% increase among all providers in an across-the-board increase, the impact per provider would be very small. The ability to implement targeted increases will have a much greater impact for those affected providers.

We want to ensure we are using our limited resources to accomplish two things:

  • Address serious inequities in rates where they exist, and
  • Promote high quality, cost effective procedures that improve client outcomes and reduce expenditures for the State.

We value the rich and diverse input from our provider partners and their representatives in this year’s Targeted Rate Increase process.  Please review our Fact Sheet for more information.

We value your input as partners and look forward to working with you throughout this process.