Temporary Medicaid Compensation Hike Leaves Industry Baffled

How do you recruit docs based on a sketchy, two-year arrangement?

To recruit more doctors to treat the poor, President Obama's health-care law took a simple approach: temporarily pay doctors more money.

Starting Jan. 1, primary-care doctors when treating patients on Medicaid, the state-federal health insurance program for the poor, will get the same rates they are paid when caring for seniors in the Medicare program. The higher rates will last for two years.

While Medicaid fees vary by state, they are generally far below Medicare and private plans. The change, which will cost $11 billion and will be paid for by the federal government, means a 64 percent average pay increase, according to an Urban Institute analysis of the 2010 rates.

But implementing the raise is not simple.