Medicare assignment rates of physicians: their responses to changes in reimbursement policy.

A physician's Medicare assignment rate is one measure of his or her willingness to participate in the Medicare program. The assignment rate reflects the proportion of services provided to Medicare beneficiaries for which the physician accepts the Medicare reasonable fee as payment in full. Generally, Medicare reasonable fees are lower than the payment which a physician receives from providing the same service to a private patient or to a Medicare patient who is not treated on assignment. Because Medicare eligibles not treated on an assigned basis are financially liable for the difference between the physician's charge and the Medicare reasonable fee, the assignment rate is an indication of the out-of-pocket costs borne by Medicare eligibles. One factor which may affect the willingness of physicians to accept patients on assignment is the difference between the reimbursement which he or she may receive in the private market and the fee received from treating Medicare eligibles on assignment; Throughout this paper we assume that the physician's private price or billed charge is equivalent to the level of reimbursement received from treating privately insured patients and Medicare non-assigned patients. Since the level of reimbursement is generally no greater than the billed charge and may be less, this assumption may overstate the actual reimbursement received by the physician. In all instances, reimbursement refers to the aggregate amount received by the physician from all sources for a given service. The lower a physician's Medicare reasonable fee relative to the private market fee the less willing he/she may be to participate in Medicare assignment. This paper examines the effect of changes in Medicare reimbursement on the assignment rates of physicians. It also predicts Medicare assignment rates under a policy option which would increase Medicare reasonable fees to the level of prevailing fees.     

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.     

In 2011 nearly one-third of physicians said they would not accept new medicaid patients, but rising fees may help

When fully implemented, the Affordable Care Act will expand the number of people with health insurance. This raises questions about the capacity of the health care workforce to meet increased demand. I used data on office-based physicians from the 2011 National Ambulatory Medical Care Survey Electronic Medical Records Supplement to summarize the percentage of physicians currently accepting any new patients. Although 96?percent of physicians accepted new patients in 2011, rates varied by payment source: 31?percent of physicians were unwilling to accept any new Medicaid patients; 17?percent would not accept new Medicare patients; and 18?percent of physicians would not accept new privately insured patients. Physicians in smaller practices and those in metropolitan areas were less likely than others to accept new Medicaid patients. Higher state Medicaid-to-Medicare fee ratios were correlated with greater acceptance of new Medicaid patients. The findings serve as a useful baseline from which to measure the anticipated impact of Affordable Care Act provisions that could boost Medicaid payment rates to primary care physicians in some states while increasing the number of people with health care coverage.     

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.     

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.     

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.     

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.     

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.     

Physician participation in Medicaid: evidence from California.

The objective of this paper is to investigate physician participation in the Medicaid program. In particular, how sensitive is the physician''s involvement with Medicaid to variations in Medicaid reimbursements? How important are fee levels in the private market? What is the impact of inflation on the costs of physicians'' inputs, particularly if the Medicaid fee remains relatively constant? These questions are explored through an empirical analysis fo data from the California Medicaid program. Two aspects of physician participation form the focus of the study: 1) the percentage of physicians participating in Medicaid in a given county and 2) the average number of nonaged, Medicaid patients treated by each participating physician. Information on these variables and on Medicaid fees and private charges come from Medicare and Medicaid claims records for more than 3,000 physicians. The most significant result of the study is the reaffirmation of the importance of the amounts of both private charges and Medicaid payments in determining participation rates and average Medicaid case loads per participating physician. Both dependent variables are, as expected, inversely related to physicians'' average billed revenue per patient and are positively related to average Medicaid payments per patient. In addition, it appears that the long-run impact of a change in billed revenue is significantly larger in absolute value than a corresponding change in the amount that Medicaid is willing to pay.     

Medicare and Medicaid physician payment incentives.

The incentives in the Medicare and Medicaid physician payment systems and their effects on six interrelated aspects of health care costs and beneficiary access to care were analyzed. Research results and data presented indicate that Medicare and Medicaid physician payment incentives are inconsistent with current public policy goals of (1) containing inflation in fees and expenditures, (2) encouraging physician participation in public programs, (3) improving the geographic and specialty distributions of physicians, (4) encouraging primary care instead of surgery, and also outpatient rather than inpatient treatment.     

Effects of changes in incomes and practice circumstances on physicians' decisions to treat charity and Medicaid patients

CONTEXT: The decline over the past decade in the percentage of physicians providing care to charity and Medicaid patients has been attributed to both financial pressure and the changing practice environment. Policymakers should be concerned about these trends, since private physicians are a major source of medical care for low-income persons. This study examines how changes in physicians' practice income, ownership, and size affect their decisions to stop or start treating charity care and Medicaid patients. METHODS: This study uses panel data from four rounds of the Community Tracking Study Physician Survey. The dependent variables are the likelihood of physicians' (1) dropping charity care, (2) starting to provide charity care, (3) no longer accepting new Medicaid patients, and (4) starting to accept new Medicaid patients. The primary independent variables are changes in physicians' practice income, ownership, and practice type/size. Multivariate analysis controls for the effects of other physician practice characteristics, health policies, and health care market factors. FINDINGS: A decline in physicians' income increased the likelihood that a physician would stop accepting new Medicaid patients but had no effect on his or her decision to provide charity care. Those physicians who switched from being owners to employees or from small to larger practices were more likely to drop charity care and to start accepting Medicaid patients, and physicians who made the opposite practice changes did the reverse. CONCLUSIONS: Changes in their income and practice arrangements make physicians less willing to accept Medicaid and uninsured patients. Moreover, physicians moving into different practice arrangements treat charity and Medicaid patients as substitutes rather than as similar types of patients. To reverse these trends, policymakers should consider raising Medicaid reimbursement rates and subsidizing organizations that encourage private physicians to provide charity care.     

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.     

Physician use of disease management programs.

This paper examines differences in availability, use, and perceived usefulness of disease management programs as reported by generalist and specialist physicians functioning as primary care providers in health plans. Implications of these differences are discussed in terms of the three types of purchasers: private insurers, Medicare, and Medicaid. The design is a cross-sectional mail and telephone mixed-mode survey. The data come from 23 health plans in five states (Florida, New York, Colorado, Pennsylvania, and Washington), including six metropolitan areas: Seattle, New York City, Miami, Pittsburgh, Philadelphia, and Denver. The study participants are 1,244 generalist and specialist physicians who contracted with health plans as primary care providers. They were drawn from a 2001 mail and telephone survey of 2,105 generalist and 1,693 specialist physicians serving commercial, Medicaid, and Medicare patients. Physician responses about use of disease management for their patients in the health plan and how useful they thought it was were regressed on physician, physician organization, and physician-health plan relationship characteristics. While generalist physicians are likely to report having disease management programs available and using them, specialists vary greatly in their response to the disease management programs. In contrast to physicians associated with commercial plans, implementation of disease management programs among physicians associated with Medicaid plans varied across states. Primary care providers trained in generalist areas of practice are more likely than specialists functioning as primary care providers to report that disease management programs are available and to use them. They also find them more useful than do specialists.     

Reimbursement and access to physicians' services under Medicaid.

Several recent studies have shown that physician participation in state Medicaid programs is directly related to the generosity of their reimbursement levels. The implication is that when states reduce fees, Medicaid eligibles suffer because their access to physicians' services is thereby limited. The results presented in this paper do not support this implication. Multivariate analyses of utilization and site-of-visit patterns among non-elderly Medicaid eligibles indicate that stringent physician reimbursement practices do not impede access to ambulatory care when all sites at which a doctor may be seen are considered.     

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)     

Physician volume response to price controls

The need to contain escalating health care costs is one of the major challenges facing health care systems today. It is often argued that price control is an effective tool for reducing both the level and the rate of growth in health spending. However, experience suggests that these savings may be partially offset by volume increases. These are initiated by providers, particularly physicians, who attempt to provide more health care goods and services in order to recapture lost revenues. This phenomenon is called the behavioral offset or volume response. This paper examines the physician behavioral response to the fee reductions at the practice level using the data from the U.S. Medicare program in 1989 and 1990. This is the most recent data currently available at the practice level for the Medicare program at this writing. This period of time corresponds to the fee reductions mandated by the Omnibus Budget Reconciliation Act of 1989 (OBRA89). The results show that the volume of services whose fees were cut by OBRA89 increased by 3.7% for every 10% fee reduction. This means that, for every dollar cut in their fees, physicians would recoup 37 cents by increasing volume. The presence of a volume response suggests that price control alone is not sufficient to cap rising health care costs. This indicates that additional or other tools must be considered if cost containment is to be attained.     

The myth of the lone physician: toward a collaborative alternative

Cultural values and beliefs about the primary care physician bolster the myth of the lone physician: a competent professional who is esteemed by colleagues and patients for his or her willingness to sacrifice self, accept complete responsibility for care, maintain continuity and accessibility, and assume the role of lone decision maker in clinical care. Yet the reality of current primary care models is often fragmented, impersonal care for patients and isolation and burnout for many primary care physicians. An alternative to the mythological lone physician would require a paradigm shift that places the primary care physician within the context of a highly functioning health care team. This new mythology better fulfills the collaborative, interprofessional, patient-centered needs of new models of care, and might help to ensure that the work of primary care physicians remains compassionate, gratifying, and meaningful.     

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.     

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.     

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.