Between 2003 and 2008, Medicaid physician fees rose a bit more than Medicare fees, but did not keep up with inflation, according to a study published on the website of the journal Health Affairs. The study was conducted by the Urban Institute in partnership with the Kaiser Commission on Medicaid and the Uninsured and the California HealthCare Foundation. The study examined states' Medicaid physician fee schedules from 2003 to 2008 and compared them to the Medicare fees during the same period. On average, combining all services, Medicaid physician fees rose 15.1 percent during the five-year period, while Medicare fees rose about 9 percent. Neither program kept pace with inflation.
History of payment gaps
Medicaid physician fees in most states have always been lower than both private insurer payments and Medicare for the same services. As a result, physicians have been less willing to accept Medicaid patients. In some areas, Medicaid recipients' access to care has been affected. States' concerns about the effects of fees on access were a primary reason that they increased Medicaid payments during the late 1990s and early 2000s, according to Stephen Zuckerman, a senior fellow at the Urban Institute's Health Policy Center and lead author of the study.
Because the gap between Medicare payments and those of private insurers has been narrower and has been fairly stable since 2003, Medicaid payments may have increased relative to private insurance payments, according to the study. During the period of the study, the Consumer Price Index (CPI) rose 20.3 percent, and the medical component rose 28.1 percent. The average annual increases were 2.6 percent for Medicaid payments, compared with 3.4 percent for the CPI and 4.6 percent for the medical component.
Variations among states, targeted practice areas
Physician fees varied widely across states. The variation among states remained relatively constant. All jurisdictions except Minnesota and New York increased their physician payments between 2003 and 2008. Only six states and the District of Columbia paid rates more than 10 percent below the national average. New Jersey paid the lowest rates, at 58 percent of the national average.
Payments for primary care and obstetrical services accounted for most of the Medicaid increases. Between 2003 and 2008, Medicaid payments to primary care physicians rose from 62 percent to 66 percent of Medicare payments. Medicaid payments for obstetrical services grew from 84 percent to 93 percent of Medicare rates. The gap between Medicaid and Medicare payments for other services was fairly constant, at 73 percent, during this period.
The article is available at: http://content.healthaffairs.org/cgi/content/full/hlthaff.28.3.w510/DC1.
Health Affairs, April 28, 2009.
For more information on this and related topics, consult the CCH® Medicare and Medicaid Guide.
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