Maine will spend $7.8 million to cover federal cuts in reimbursements to doctors treating MaineCare patients.

More than 500 physicians won’t face reductions in MaineCare reimbursement rates despite cutbacks in federal funding, LePage administration officials said, because keeping rates at current levels is part of the state’s strategy to invest in primary care.

Maine will spend an extra $7.8 million annually to make up for lost federal funding in two programs, administration officials said.

An extra $2.9 million in state money will keep MaineCare doctor reimbursement rates from being reduced, and another $4.9 million for a separate MaineCare program will boost reimbursement rates for about 200 physician practices. Details will be unveiled when the administration releases its two-year, 2015-17 budget on Friday.

“We believe in, and see the value of, a strong primary care system,” said Mary Mayhew, health and human services commissioner. “We are building this into the budget for the long term.”

That means a doctor who had been receiving $100 for an office visit for a MaineCare patient in 2014 will still be paid that $100 in 2015, despite the federal reduction in reimbursement rates. If Maine had not filled the gap, the doctor’s reimbursement for the same patient visit would have been about $67.

MaineCare is the state’s Medicaid program, which is health insurance for low-income residents that’s funded with a blend of federal and state dollars.

Under the Affordable Care Act, the federal government increased Medicaid reimbursements for doctors, but only for two years, – the higher rates expired Dec. 31.

States are permitted to make up the gap, but so far only Maine and 14 other states have decided to do so, according to a December report by the Washington D.C.-based Urban Institute.

Although Gov. Paul LePage has cut the MaineCare budget by millions and reduced the number of people eligible for MaineCare – from 355,000 in 2011 when he took office to 307,000 in 2015 – Mayhew said the focus is on providing good services to those who have MaineCare.

Mayhew noted that in the 2000s many primary care doctors would not accept or would restrict the number of MaineCare patients because reimbursement rates were so low.

“Just because you had a MaineCare card didn’t mean you could get in to see a doctor,” Mayhew said. “For years, we expanded MaineCare on the backs of primary care providers.”

Mayhew said that if Maine had expanded Medicaid – something Democrats and health advocacy groups have lobbied for over the past two years – the state would not have been able to afford the increased investment in primary care.

Mitchell Stein, an independent health policy analyst who favors MaineCare expansion, said that while maintaining MaineCare reimbursements is a good idea, the state could have afforded to do that and expand MaineCare. He said having more people insured would save the health care system money – including state dollars – in the long term as more people used primary care and avoided expensive emergency room care. Also, he said, the federal government would have paid for the bulk of the MaineCare expansion.

“The administration always set up these false choices, ‘If we did ‘A’ we wouldn’t be able to do ‘B.’ That’s just not the case,” Stein said.

Still, those representing the primary care industry were pleased by the reimbursement boost.

“We’re thrilled the administration is supportive of this,” said Andrew MacLean, deputy executive vice president of the Maine Medical Association, a physician advocacy group.

The move should help ensure that MaineCare patients have access to physicians and help preserve the remaining independent doctors, who make up 10 percent to 20 percent of the total primary care physicians in the state, MacLean said. Stingy MaineCare reimbursements were one factor – the cost of medical malpractice insurance and the administrative costs of maintaining a private practice were others – that have led many of the state’s independent doctors to partner with a hospital network, he said.

The boosted MaineCare reimbursement rate would affect independent primary care physicians, and not those affiliated with a hospital, who are reimbursed under a different system.

Had the rate been slashed, it would have been another incentive to give up independence and join a hospital-affiliated practice, MacLean said, or restrict the number of MaineCare patients seen.

Dr. Lisa Letourneau, executive director of Maine Quality Counts, a health reform advocacy group, said the state “should be applauded” for keeping reimbursements intact.

“This is part of an ongoing effort to help improve primary care, to change the way we pay for primary care,” she said.

The $4.9 million would maintain enhanced reimbursement rates for about 200 practices participating in MaineCare’s “health homes” initiative, which provides extra money for doctors who better manage patient populations with chronic conditions.

A lot of the money will go toward hiring nurse managers or other medical assistants who monitor patients’ chronic conditions, freeing up doctors to treat patients, Letourneau said.

“This allows the doctor to do best what they were trained for, to diagnose and treat patients, not to hunt through charts or track down the results of a test,” she said.

Stephanie Nadeau, the state’s director of MaineCare services, said both primary care investments were easy to make.

“It was a sound and logical step, and all of these decisions are intended to make primary care more accessible,” she said.

In addition, Maine recently landed $30 million over two years from the federal government to pay for similar initiatives for the entire patient population – not just MaineCare patients, Letourneau said.

The initiatives make Maine a leader in moving primary care payments away from the old “fee-for-service” system, which contained incentives for doctors to see as many patients as possible instead of keeping their patients healthy.

“There’s a lot of people who believe we should blow up the whole ‘fee-for-service’ system,” Letourneau said. “We would love to be one of the first states that changes how doctors are paid throughout the entire state.”

Nationally, only about 5 percent of health care system spending goes for primary care, while other nations devote 10 percent to 15 percent of their costs toward primary care, which is less expensive and better for patient health, Letourneau said.

At Martin’s Point Health Care, an independent primary care practice with nine locations in Maine, the decision to maintain reimbursement rates is “really important,” spokeswoman Kate Leahy said.

Dr. Jonathan Harvey, Martin’s Point medical director and a primary care physician, said any investment in preventive care is appreciated.

“Increasing funding of primary care helps improve the overall integration and coordination of care, especially for more vulnerable populations like Medicaid and Medicare beneficiaries,” he said.