Medicare May Raise Pay to Health Clinics by $1.3 Billion

The U.S. Medicare program said it would increase payments to nonprofit community health clinics by as much as $1.3 billion over the next five years under a new reimbursement system ordered by Obamacare.

About 3,830 of the clinics stand to benefit from the change, which may raise their payments from Medicare by about a third, according to a rule published today by the government. The clinics serve mostly low-income patients in communities with few other options for health care and are supported by about $3.6 billion in federal grants.

Elderly and disabled Medicare patients -- who generally can go to any doctor they choose -- were the fastest growing segment of the clinics’ business in 2008, according to the National Association of Community Health Centers, even though they comprise less than 10 percent of patients nationally. The association lobbied the government for increased Medicare reimbursement, arguing the clinics lost at least $51 million a year because of limits on their payments from the program.

The clinics “are essential to countless patients in local communities who depend on them for getting their primary and preventive care,” Marilyn Tavenner, the administrator of the U.S. Centers for Medicare and Medicaid Services, said in a statement.

Under the new system, the clinics will be paid a single daily fee of about $155 per patient for all the services they provide Medicare beneficiaries, Tavenner’s agency said. The fee will vary depending on where the clinics are located and other factors.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net Andrew Pollack

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