Health reform bills now being debated in Congress will likely bring more low-income Hoosiers under the banner of Medicaid – maybe up to 500,000 more. To care for those numbers, the state would need to persuade more physicians to contract with Medicaid. And to accomplish that, program officials realize they’d have to pay doctors more.

While debate continues in Washington, the Indiana Family and Social Services Administration (FSSA) asked the actuarial firm Milliman, Inc. to study the impact of the Patient Protection and Affordable Care Act, the Senate’s bill on health care reform.

Milliman noted in its subsequent report that Indiana Medicaid physicians are now paid at 60 percent of the Medicare rate and have received only one small boost in payment since 1994.

Milliman’s Robert Damler, in a letter to FSSA Secretary Anne Murphy said, “I would anticipate that the minimum increase for physicians would be to 80 percent of the Medicare fee schedule.”

In a subsequent letter to Indiana Sens. Bayh and Lugar, Secretary Murphy explained, “Over the next 10 years, our actuaries estimate the Senate bill will cost Hoosier taxpayers an additional $2.4 billion dollars. This number includes the cost of the Medicaid expansion, as well as provider rate increases for Medicaid that will be necessary to create a delivery network.”

Read the Milliman report to FSSA here.

See the letter from FSSA Secretary Murphy to Indiana’s senators.