Hawaii’s primary care doctors serving Medicaid patients will get a boost in payments Jan. 1 as part of the federal health care reform law.

The U.S. Department of Health and Human Services announced last week the final rules for the Patient Protection and Affordable Care Act, which ensures doctors are paid the same for treating Medicare and Medicaid patients. Currently, Medicaid pays 60 percent to 65 percent of what Medicare pays to providers for the same service, according to the state Department of Human Services.

The Affordable Care Act will require that Medicaid pay physicians practicing in family medicine, general internal medicine, pediatric medicine and related subspecialists at Medicare rates in 2013 and 2014.

The state estimates the change will equate to more than a one-third increase in payments to primary care providers. Specialists, however, are excluded from the rate adjustment.

Finding a primary care doctor willing to accept new patients covered by Medicaid, a public health insurance program for the poor, has proved difficult for a growing number of Hawaii residents. Doctors say reimbursements are significantly lower than private health plans for the same services.

In addition to low reimbursements, doctors complain that the Medicaid system has become increasingly onerous and time-consuming, involving cumbersome paperwork and administrative headaches.

The situation is limiting access to care for the state’s most vulnerable population.

Hawaii has more than 850 primary care providers participating in Medicaid, according to the state Department of Human Services. The Hawaii rate increases will cost the federal government an estimated $45 million in the first year, DHS said.

"We are pleased to have this opportunity to increase reimbursements to primary care providers," said Kenneth Fink, administrator of the DHS Med-Quest division. "We greatly appreciate all providers’ service to Medicaid beneficiaries."

The program will be funded by the federal government for two years; then states must decide whether to uphold the higher reimbursements for primary care physicians without increased federal money.

"At this time we do not know if Hawaii will participate after the pilot project," said DHS spokes­woman Kayla Rosenfeld.

The higher payments to doctors might be delayed since states have little time to ramp up Medicaid programs. The federal government is allowing states to make the adjustments retroactive to Jan. 1.

The higher payments come as the federal government seeks to entice more physicians to participate in Medicaid, as some states choose to expand coverage.

Adjustments to Hawaii’s Medicaid program are expected to significantly expand the rolls by an estimated 30,000 to 40,000 new beneficiaries.

But local physicians are skeptical that the higher payments will actually draw more providers into the Medicaid system, saying government reimbursements still do not cover the costs of care.

"People were quitting Medicare (and Medicaid) before, and if you give them the same amount, it’s still going to be a problem," said Alan Tice, a recently retired internist and infectious diseases specialist. "It’s to the point where a large percentage of doctors no longer accept Medicaid patients because they can’t afford to."

Honolulu psychiatrist Stephen Kemble, president of the Hawaii Medical Association, said the higher fees won’t help many mentally ill Medicaid beneficiaries with better access to specialists such as psychiatrists who have been driven out of Medicaid because of the burdensome managed-care system that requires pre-authorization for treatments and imposes restrictions on drugs doctors can prescribe.

"It’ll probably help the ones still taking existing patients, but it won’t have much effect on doctors who are already avoiding Medicaid because of the managed-care hassle," he said. "It’s not going to help enough because the managed-care system is a deterrent to doctors taking Medicaid patients. There’s widespread problems. This is a devastating situation."

In addition to higher payments, the health care law includes programs designed to strengthen the primary care system, including an expansion of medical residency positions for primary care physicians, investments in training for physician assistants and nurse practitioners, and an expansion of scholarship and loan repayment programs to primary care providers who practice in underserved areas.