Trends in Medicaid physician fees, 1993-1998

This study uses data on Medicaid physician fees in 1993 and 1998 to document variation in fees across the country, describe changes in these fees, and contrast how they changed relative to those in Medicare. The results show that 1998 Medicaid fees varied widely. Medicaid fees grew 4.6 percent between 1993 and 1998, lagging behind the general rate of inflation. This growth was greater for primary care services than for other services studied. Relative to Medicare physician fees, Medicaid fees fell by 14.3 percent between 1993 and 1998. Medicaid's low fees and slow growth rates suggest that potential access problems among Medicaid enrollees remain a policy issue that should be monitored.     

Medicaid physician payment reform: using the Medicare Fee Schedule for Medicaid payments.

OBJECTIVES. The purpose of this article is to provide estimates of the costs of basing Medicaid physician payment levels on the new resource-based Medicare Fee Schedule. Two possible policy options are considered: setting all Medicaid physician fees at the Medicare Fee Schedule level and setting only office visit fees at the new Medicare levels. METHODS. Data on Medicaid physician fees, use patterns, and the Medicare Fee Schedule are used to develop state-level estimates of expenditure changes under each option. RESULTS. Setting Medicaid rates at the Medicare Fee Schedule level could increase expenditures by $3.2 to $4.1 billion nationally; the other option would result in substantially lower increases in expenditures. Because of the current variations in Medicaid physician fees and in the breadth of eligibility across states, the cost of adopting the Medicare Fee Schedule varies considerably among states. CONCLUSIONS. Adopting the new Medicare Fee Schedule for Medicaid payments, proposed by policy-makers as a way to increase access to appropriate medical care, could double physician expenditures in some states. Adoption of more limited versions of the fee schedule might achieve some access gains at lower costs.     

Using Medicaid claims data to evaluate a large physician fee increase.

OBJECTIVE. This study demonstrates the use of Medicaid claims data in order to evaluate a threefold fee increase in physician fees for deliveries ($265 to $795), which the Maryland Medicaid program implemented in 1986. DATA SOURCES AND STUDY SETTING. The study used Maryland Medicaid claims data for years of service 1985-1988, and was done at the Maryland Department of Health and Mental Hygiene with the help of a Robert Wood Johnson, Health Care Financing and Organization (HCFO) grant. STUDY DESIGN. Overall, our design is that of a pre-test, post-test with multiple observation points both before and after the fee increase. We measured participation in three ways, corresponding to three different units of analysis. With the county-quarter year as unit of analysis, we followed a panel of providers over 16 quarters for each county in the state to determine changes in the number of delivering providers. With the individual provider as the unit of analysis, we identified effects on their Medicaid caseload between years that may have been influenced by the fee increase. Finally, we looked at continuously enrolled Medicaid women who delivered to determine the effects of the fee increase on site and volume of prenatal care. DATA COLLECTION/EXTRACTION METHODS. Analytic files for each unit of analysis were compiled from previously extracted Medicaid claims files using standard statistical software packages. PRINCIPAL FINDINGS. Using techniques described, we were able to get an in-depth picture of overall responsiveness to the intervention. We found a moderate influence of the fee increase on overall participation, less than what we would have predicted. CONCLUSIONS. Administrative data can be used to construct efficient, yet sophisticated evaluations of major policy changes. Findings from our evaluation suggest a moderate effect of the fee increase on overall participation. However, raising fees to the level of private third party payers does not in itself guarantee equal access to private physician health care for Medicaid mothers.     

State Medicaid fees and access to primary care physicians

Medicaid and uninsured patients are disadvantaged in access to care and are disproportionately Black and Hispanic. Using a national audit of primary care physicians, we examine the relationship between state Medicaid fees for primary care services and access for Medicaid, Medicare, uninsured, and privately insured patients who differ by race/ethnicity and sex. We found that states with higher Medicaid fees had higher probabilities of appointment offers and shorter wait times for Medicaid patients, and lower probabilities of appointment offers and longer wait times for uninsured patients. Appointment offers and wait times for Medicare and privately insured patients were unaffected by Medicaid fees. At mean state Medicaid fees, our analysis predicts a 27‐percentage‐point disadvantage for Medicaid versus Medicare in appointment offers. This decreases to 6 percentage points when Medicaid and Medicare fees are equal, suggesting that permanent fee parity with Medicare could eliminate most of the disparity in appointment offers for Medicaid patients. The predicted decrease in the disparity is smaller for Black and Hispanic patients than for White patients. Our research highlights the importance of considering the effects of policy on nontarget patient groups, and the consequences of seemingly race‐neutral policies on racial/ethnic and sex‐based disparities.     

Do increases in payments for obstetrical deliveries affect prenatal care?

Raising fees is one of the primary means that State Medicaid Programs employ to maintain provider participation. While a number of studies have sought to quantify the extent to which this policy retains or attracts providers, few have looked at the impact of these incentives on patients. In this study, the authors used Medicaid claims data to examine changes in volume and site of prenatal care among women who delivered babies after the Maryland Medicaid Program raised physicians fees for deliveries 200 percent at the end of its 1986 fiscal year. Although the State''s intent was to stabilize the pool of nonhospital providers who were willing to deliver Medicaid babies, it was also hoped that women would benefit through greater access to prenatal care, especially care rendered in a nonhospital setting. The authors'' hypotheses were that (a) the fee increase for obstetrical deliveries would result in an increase in prenatal visits by women on Medicaid, and (b) the fee increase would lead to a shift in prenatal visits from hospital to community based providers. The data for Maryland''s Medicaid claims for the fiscal years 1985 through 1987 were used. Comparisons were made in the average number of prenatal visits and the ratio of hospital to nonhospital prenatal visits before and after the fee increase. Data for continuously enrolled women who delivered in the last 4 months of each fiscal year were analyzed for between and within year differences using Student''s t-test and ANOVA techniques.(ABSTRACT TRUNCATED AT 250 WORDS)     

Medicaid policy and the substitution of hospital outpatient care for physician care.

This article explores the effects of reimbursement and utilization control policies on utilization patterns and spending for physician and hospital outpatient services under state Medicaid programs. The empirical work shows a negative relationship between the level of Medicaid physician fees relative to Medicare and private fees, and the numbers of outpatient care recipients, suggesting that outpatient care substitutes for physician care in states with low fee levels. In addition, it shows a positive relationship between Medicaid physician fees and outpatient spending per recipient, suggesting that in low-fee states outpatient departments are providing some types of care that could be provided in a physician's office. Finally, the analysis demonstrates that reimbursement and utilization control policies have significant effects in the expected directions on aggregate Medicaid spending for physician and outpatient services.     

Effect of Medicaid payment levels on access to obstetrical care.

Across the nation, the number of providers serving pregnant Medicaid clients has dropped precipitously. In an effort to retain providers, in 1986 the Maryland Medicaid program tripled reimbursement fees for deliveries. This raised Medicaid payments for perinatal care to levels roughly comparable to those paid by private insurers. Providers' participation can be measured using two criteria: the total number of participating providers in a given country and the number of deliveries performed by targeted providers. The fee increase was associated with an overall stabilization in the number of providers performing deliveries. Providers performed slightly more deliveries after the fee increase, relative to predictions derived from statistical models. One-quarter of all providers increased their participation on a scale commensurate with the fee increase.     

Physician response to a change in Medicaid fees.

This study examines the effects of a change in Medicaid fees on the volume of physician services provided to beneficiaries. The data set includes price and volume at the procedure-level for Medicaid physician services in Texas in 1991, 1993, and 1995. The empirical analysis compares the volume of services provided to Medicaid participants before and after a 1992 change in reimbursement method. The results indicate that, over the period 1991 to 1993, the change in Texas Medicaid physician fees did not have a statistically significant effect on the volume of services provided. When measured over a longer period of time (1991-1995), however, volume increased significantly when price decreased, but, when price increased, there was no significant effect on volume. The results thus provide empirical support for the behavioural offset assumption underlying the switch to Medicare's Resource-Based Relative Value Scale (RBRVS) method of physician payment. A key policy implication is that reduced fees did not lead to a lower volume of physician services provided to Medicaid patients at least over the period of analysis. However, the new Medicaid fee schedule did not have the desired effect of controlling Medicaid expenditures on physician services.     

Medicaid Primary Care Physician Fees and the Use of Preventive Services among Medicaid Enrollees

Objective

The Patient Protection and Affordable Care Act (ACA) increases Medicaid physician fees for preventive care up to Medicare rates for 2013 and 2014. The purpose of this paper was to model the relationship between Medicaid preventive care payment rates and the use of U.S. Preventive Services Task Force (USPSTF)–recommended preventive care use among Medicaid enrollees.

Data Sources/Study Session

We used data from the 2003 and 2008 Medical Expenditure Panel Survey (MEPS), a national probability sample of the U.S. civilian, noninstitutionalized population, linked to Kaiser state Medicaid benefits data, including the state Medicaid-to-Medicare physician fee ratio in 2003 and 2008.

Study Design

Probit models were used to estimate the probability that eligible individuals received one of five USPSF-recommended preventive services. A difference-in-difference model was used to separate out the effect of changes in the Medicaid payment rate and other factors.

Data Collection/Extraction Methods

Data were linked using state identifiers.

Principal Findings

Although Medicaid enrollees had a lower rate of use of the five preventive services in univariate analysis, neither Medicaid enrollment nor changes in Medicaid payment rates had statistically significant effects on meeting screening recommendations for the five screenings. The results were robust to a number of different sensitivity tests. Individual and state characteristics were significant.

Conclusions

Our results suggest that although temporary changes in primary care provider payments for preventive services for Medicaid enrollees may have other desirable effects, they are unlikely to substantially increase the use of these selected USPSTF-recommended preventive care services among Medicaid enrollees.     

Physician losses from Medicare and Medicaid discounts: how real are they?

Physicians' claims that extensive Medicare and Medicaid fee discounting imposes an inequitable burden on them are examined using survey data from the Health Care Financing Administration on 5,000 primary care physicians. A definite fee hierarchy is documented, with the physician's usual charge at the top and Medicare and Medicaid allowables at the bottom. Under usual, customary, and reasonable methods, physicians can use fees to maximize payment, and insurer attempts to control fees result in both sides participating in a revenue maximization-expenditure control game. Raising Medicare and Medicaid allowables to the physician's usual fee is shown to result in large windfall gains that are unnecessary and unjustified in terms of work effort, human capital investment, or eliciting an adequate supply of practitioners.     

Do Medicaid physician fees for prenatal services affect birth outcomes?

This study exploits a natural experiment to examine the relationship between Medicaid physician fees and birth outcomes among a national sample of pregnant women. Applying a cohort difference-in-differences methodology, I find a significant negative association between these fees and the risk of low birth weight. I estimate that a 10% higher than average relative Medicaid fee is independently associated with a 0.074% lower absolute risk of low birth weight (<2.5 kg) and a 0.035% lower risk of very low birth weight (<1.5kg) among Medicaid-insured women. For low-income women, this association grows significantly. Lastly, I find a moderate association between these fees and use of first trimester prenatal services.     

The impact of Medicaid adoption of the Medicare fee schedule

In this article, the authors simulate the effects on Federal and State Medicaid expenditures of increasing Medicaid fees to Medicare fee schedule (MFS) levels. Strict adoption of the MFS by the States would increase total Medicaid spending by approximately 4 percent, $2.5 to $2.9 billion. Because Medicaid fees vary across States, so does the impact of adopting the MFS. Medicaid spending would increase significantly in some wealthy States with large Medicaid populations and in a few small, relatively poor States. Some States currently pay more than the MFS for obstetrical services. If these fees continued at higher levels for obstetrical care, total Medicaid spending would increase by $3.5 to $4.0 billion.     

The Impact of Medicaid Reform on Children’s Dental Care Utilization in Connecticut,Maryland, and Texas

ObjectiveTo measure the impact of Medicaid reforms, in particular increases in Medicaid dental fees in Connecticut, Maryland, and Texas, on access to dental care among Medicaid-eligible children.Data2007 and 2011–2012 National Survey of Children’s Health.ConclusionsIncreasing Medicaid dental fees closer to private insurance fee levels has a significant impact on dental care utilization and unmet dental need among Medicaid-eligible children.     

Payment generosity and physician acceptance of Medicare and Medicaid patients

Using 2008 physician survey data, we estimate the relationship between the generosity of fees paid to primary care physicians under Medicaid and Medicare and his/her willingness to accept new patients covered by Medicaid, Medicare, or both programs (i.e., dually enrolled patients). Findings reveal physicians are highly responsive to fee generosity under both programs. Also, their willingness to accept patients under either program is affected by the generosity of fees under the other program, i.e., there are significant spillover effects between Medicare and Medicare fee generosity. We also simulate how physicians in 2008 would have likely responded to Medicaid and Medicare payment reforms similar to those embodied in the 2010 Affordable Care Act, had they been permanently in place in 2008. Our findings suggest that “Medicaid Parity” for primary care physicians would have likely dramatically improved physician willingness to accept new Medicaid patients while only slightly reducing their willingness to accept new Medicare patients. Also, many more primary care physicians would have been willing to treat dually enrolled patients.     

In setting doctors' Medicare fees, CMS almost always accepts the relative value update panel's advice on work values

To calculate physicians' fees under Medicare--which in turn influence the physician fee schedules of other public and private payers--one of the essential decisions the Centers for Medicare and Medicaid Services (CMS) must make is how much physician time and effort, or work, is associated with various physician services. To make this determination, CMS relies on the recommendations of an advisory committee representing national physician organizations. Some experts on primary care who are concerned about the income gap between primary and specialty care providers have blamed the committee for increasing that gap. Our analysis of CMS's decisions on updating work values between 1994 and 2010 found that CMS agreed with 87.4 percent of the committee's recommendations, although CMS reduced recommended work values for a limited number of radiology and medical specialty services. If policy makers or physicians want to change the update process but keep the Medicare fee schedule in its current form, CMS's capacity to review changes in relative value units could be strengthened through long-term investment in the agency's ability to undertake research and analysis of issues such as how the effort and time associated with different physician services is determined, and which specialties--if any--receive higher payments than others as a result.     

Financing newborn screening: sources, issues, and future considerations.

Newborn screening (NBS) programs are population-based public health programs and are uniquely financed footline compared with many other public health programs. Since they began more than 45 years ago, the financing issues have become more complex for NBS programs. Today, almost all programs have a portion of their costs paid by fees. The fee amounts vary from program to program, with little standardization in the way they are formulated, collected, or used. We previously surveyed 37 of the 51 dried blood spot screening programs throughout the United States, and confirmed an increasing dependence on NBS fees. In this study, we have collected responses from all 51 programs (100%), including updated responses from the original 37, and updated our fee listings. Comments from those surveyed indicated that the lack of a national standardized procedural coding system for NBS contributes to billing complexities. We suggest one coding possibility for discussion and debate for such a system. Differences in Medicaid interpretations may also contribute to financing inequities across NBS programs and there may be benefit from certain clarifications at the national level. Completed survey responses accounted for few changes in the conclusions of our original survey. We confirmed that 90 percent of all NBS programs have a fee paid by parents or a third party payer. Sixty-one percent reported receiving some funds from the Maternal and Child Health Services Title V block grant, 33 percent reported some funding from state general revenue/general public health appropriations; and 24 percent reported obtaining direct reimbursement from Medicaid (without passing through a third party). A majority of programs (63%) reported budget increases between 2002 and 2005, with increases primarily from fees (72%) and to a lesser extent from Medicaid, the Title V block grant, and state general revenues.     

Do the Medicaid and Medicare programs compete for access to health care services? A longitudinal analysis of physician fees, 1998–2004

As the demand for publicly funded health care continues to rise in the U.S., there is increasing pressure on state governments to ensure patient access through adjustments in provider compensation policies. This paper longitudinally examines the fees that states paid physicians for services covered by the Medicaid program over the period 1998–2004. Controlling for an extensive set of economic and health care industry characteristics, the elasticity of states’ Medicaid fees, with respect to Medicare fees, is estimated to be in the range of 0.2–0.7 depending on the type of physician service examined. The findings indicate a significant degree of price competition between the Medicaid and Medicare programs for physician services that is more pronounced for cardiology and critical care, but not hospital care. The results also suggest several policy levers that work to either increase patient access or reduce total program costs through changes in fees.     

To Retain or Remove User Fees?

Many low- and middle-income countries continue to search for better ways of financing their health systems. Common to many of these systems are problems of inadequate resource mobilisation, as well as inefficient and inequitable use of existing resources. The poor and other vulnerable groups who need healthcare the most are also the most affected by these shortcomings. In particular, these groups have a high reliance on user fees and other out-of-pocket expenditures on health which are both impoverishing and provide a financial barrier to care. It is within this context, and in light of recent policy initiatives on user fee removal, that a debate on the role of user fees in health financing systems has recently returned. This paper provides some reflections on the recent user fees debate, drawing from the evidence presented and subsequent discussions at a recent UNICEF consultation on user fees in the health sector, and relates the debate to the wider issue of access to adequate healthcare. It is argued that, from the wealth of evidence on user fees and other health system reforms, a broad consensus is emerging. First, user fees are an important barrier to accessing health services, especially for poor people. They also negatively impact on adherence to long-term expensive treatments. However, this is offset to some extent by potentially positive impacts on quality. Secondly, user fees are not the only barrier that the poor face. As well as other cost barriers, a number of quality, information and cultural barriers must also be overcome before the poor can access adequate health services. Thirdly, initial evidence on fee abolition in Uganda suggests that this policy has improved access to outpatient services for the poor. For this to be sustainable and effective in reaching the poor, fee removal needs to be part of a broader package of reforms that includes increased budgets to offset lost fee revenue (as was the case in Uganda). Fourthly, implementation matters: if fees are to be abolished, this needs clear communication with a broad stakeholder buy-in, careful monitoring to ensure that official fees are not replaced by informal fees, and appropriate management of the alternative financing mechanisms that are replacing user fees. Fifthly, context is crucial. For instance, immediate fee removal in Cambodia would be inappropriate, given that fees replaced irregular and often high informal fees. In this context, equity funds and eventual expansion of health insurance are perhaps more viable policy options. Conversely, in countries where user fees have had significant adverse effects on access and generated only limited benefits, fee abolition is probably a more attractive policy option. Removing user fees has the potential to improve access to health services, especially for the poor, but it is not appropriate in all contexts. Analysis should move on from broad evaluations of user fees towards exploring how best to dismantle the multiple barriers to access in specific contexts.     

Medicaid fees and the Medicare fee schedule: an update

This study analyzes changes in Medicaid physician fees from 1990 to 1993. Data were collected on maximum allowable Medicaid fees in 1993 and compared with similar 1990 Medicaid data as well as the fully phased-in Medicare Fee Schedule (MFS). The results suggest that, on average, Medicaid fees have grown roughly 14 percent, but considerable variation continues to exist in how well Medicaid programs pay across types of services, States, and census divisions. Medicaid fees remain considerably lower (27 percent for the average Medicaid enrollee) than fees under a fully phased-in MFS. Medicaid fees for primary-care services were, on average, 32 percent lower.