The Effects of Medicaid Reimbursement on Access to Care of Medicaid Enrollees: A Community Perspective – Len M. Nichols

Research Objective:

Previous research has found that while higher Medicaid reimbursement levels increase physicians acceptance of Medicaid patients, reimbursement levels have little direct effect on access to care as reported by Medicaid enrollees. This research takes a community perspective, and examines the extent to which Medicaid fee levels and other local factors affect enrollee access indirectly by influencing the supply of physicians in a community who are willing to accept Medicaid patients.

STUDY DESIGN: Data are based on the 2000-01 Community Tracking Study physician and household surveys, both of which are representative of the nation as well as for 60 randomly selected sites. The survey data are supplemented by state-level data on Medicaid reimbursement levels. Using multivariate analysis from the physician survey data, we first examine the effects of varying Medicaid fee levels on whether physicians practices are open to new Medicaid patients. We then examine the effects of fee levels and the relative number of physicians accepting Medicaid patients (measured at the site-level) on measures of access to care for Medicaid enrollees, using the CTS household survey. Measures of access to care include usual source of care, use of outpatient physician and hospital care, and self-reported difficulties in getting needed medical care.

POPULATION STUDIED: U.S. physicians involved in patient care, and Medicaid enrollees.

PRINCIPAL FINDINGS: The relative number of physicians who accept Medicaid patients varies considerably across communities. Multivariate analysis shows that variation in Medicaid reimbursement levels across states contributes to community variations in physicians willingness to accept Medicaid patients, but that many other factors are also important. These include the mix of practice type and specialty in a community, population characteristics, Medicaid managed care penetration, insurance rate in the community, and geographic area. As a consequence, Medicaid reimbursement levels have little direct effect on access to care as reported by Medicaid enrollees. Rather, reimbursement levels have an indirect effect insofar as they influence (but do not determine) the relative number of physicians in a community that accept Medicaid patients. Findings show that Medicaid beneficiaries in communities with a relatively high number of physicians accepting Medicaid patients are more likely to have a usual source of care, less likely to have difficulty getting medical care, and have fewer hospitalizations.

CONCLUSIONS: Medicaid fee levels are just one of many factors that determine the supply of physicians in a community willing to accept Medicaid patients. For Medicaid enrollees, it is the availability of physicians who accept Medicaid patients and not fee levels per se that affect their access to care. Therefore, the effects of Medicaid reimbursement on enrollee access are indirect, and other market factors may outweigh fee levels in determining access to medical providers.

IMPLICATIONS FOR POLICY, DELIVERY OR PRACTICE: Rapidly escalating Medicaid costs are contributing to state budgetary pressures and deficits, which has led most states to adopt a variety of cost-containment strategies for their Medicaid program, including cuts in fees to providers. The results of this study suggest that such cuts are not as cost-free with respect to enrollee access as previous research implies. However, modest provider payment cuts may be less harmful to beneficiary access than other cost-containment strategies, such as a reduction in eligibility or benefits.

“The Effects of Medicaid Reimbursement on Access to Care of Medicaid Enrollees: A Community Perspective,” Medical Care Research and Review v. 62 # 6 (2005) with Peter Cunningham.

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