Physician Participation in Medicaid

By July 24, 2018 Commentary

One aspect of the massive federal reform law known as the Affordable Care Act, which hasn’t done a thing to live up to its name, was a substantial expansion of Medicaid, paid for initially by the federal government, and including a temporary fee increase for physicians, to try to ensure that there was sufficient capacity to handle the growth in enrollment.  Due to a Supreme Court decision, states could decide if they wanted to participate in the expansion, which creates lots of opportunities for natural experiments.  One question of interest is whether the expansion itself or the fee bump increased Medicaid participation among doctors, a questions examined in two studies published in Health Affairs.   (HA Article)  (HA Article)  The answer appears to be no.  The expansion occurred in 2014.  In 2013, Medicaid enrollees were about 7.8% of a typical primary care physicians patient pool and by 2015 that had grown to 9.4%.  All of this growth occurred in expansion states.  In 2013, about 90% of primary care physicians had at least one adult Medicaid patient and for about 10%, Medicaid patients were more than 20% of their total patient panel.  In terms of changes in relative percent of patients who were paid for by Medicare, they was little overall change.  But in expansion states, there was a trend toward treating more Medicaid patients, while in non-expansion states, there was slight tendency to decrease the proportion of Medicaid patients.  There was no change in the concentration of Medicaid patients, with about 60% of these treated by 20% of the doctors participating in Medicaid, both before and after expansion.

Given that there was an attempt to increase the financial incentive to treat Medicaid patients, this might be viewed as surprising, but the increase was temporary and may not have been sufficient to overcome the perceived administrative and other burdens of dealing with Medicaid.   It was, however, a very large increase, an average of 73% for primary care physicians, raising payments from 59% of Medicare reimbursement to 100%.  The second Health Affairs study focussed on the effect of the payment increase on Medicaid participation rates.  It used self-reported data to determine those rates.  The study period was 2011 to 2015.  About two-thirds of primary care doctors said they took new Medicaid patients at the start of the study period, and that remained unchanged to the end of it.  Multiple statistical analyses showed no association between the fee increase and participation rates.  Doctors are far less likely to take new Medicaid patients than Medicare ones or ones with private insurance.  So far there does not appear to be a crisis in physician capacity for Medicaid patients, probably because many are in managed care plans, but the situation needs careful monitoring.

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