Medicaid Reimbursement Levels and Behavioral Health Outcomes

By July 23, 2018Commentary

Doctors like to get paid, and paid what they view as an appropriate amount, for their work, just like we all do.  Medicaid has traditionally been the lowest payer so it is not surprising that the program often sees more physicians not participating.  The reform law raised reimbursement rates, temporarily, in an attempt to ensure there was adequate capacity for the Medicaid expansion.  (We are going to review other research tomorrow that indicates that the increase in payments did not in fact affect physician participation rates.)  A new paper examines whether that expansion of coverage and improved reimbursement had an impact on behavioral health outcomes among Medicaid recipients.   (NBER Paper)   Over 75 million people are covered by Medicaid, which is a huge number, but as many as 30% of doctors don’t take new Medicaid patients and many won’t see them at all.  The Medicaid population has high levels of mental illness and other behavioral health problems.  There is a scarcity of behavioral health providers, and an even greater lack for Medicaid.  This means that primary care providers often fill the gap and spend a fair amount of time addressing these behavioral health issues.

The authors used survey data on mental illness and substance abuse and linked it to variations in the pre and post federal pay bump to see increasing reimbursement affected outcomes.  Note the usual caveats about using self-reported survey data.  The researchers found no evidence that the Medicaid expansion and reimbursement increase led to a rise in utilization of behavioral health services, although primary care visit rates did increase.  This may be due to lack of behavioral health capacity or that the reimbursement rise wasn’t sufficient to induce behavioral health specialists to see more Medicaid patients.  Notwithstanding this, behavioral health outcomes appeared to improve, as measured by rates of mental illness outpatient treatment, substance abuse treatment or tobacco use.  Prior to the federal reimbursement bump, rates of mental illness were 31% in the Medicaid population, substance abuse affected 12% and tobacco use 42%.  (A separate question is why people get to keep their Medicaid coverage if they keep smoking and abusing drugs or alcohol.)  Treatment rates were only 23% for mental illness and 4.5% for substance abuse.  Prior to the bump, Medicaid reimbursement averaged 71% of Medicare payments; afterword it averaged 101%.  According to the researchers this pay bump led to a 3% decline in mental illness rates, a 1.75 decline in substance abuse and 2.4% less tobacco use.  Since there was no greater use of behavioral health services, the hypothesis is that primary care providers were doing a more effective job of addressing behavioral health issues.  I am skeptical, but if true, it is good news and suggests that we can rely on primary care providers to help provide more behavioral health care.

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