While some states have increased their Medicaid reimbursement rates for primary-care and obstetric services, in general, rate increases did not keep up with the rate of inflation between 2003 and 2008, according to a recent report from the Washington-based Urban Institute and published on the Web site of the journal Health Affairs.
On average, Medicaid fees increased 15.1% or an average of 2.6% a year. In comparison, the Consumer Price Index grew 20.3% between 2003 and 2008, at an annual average of 3.4%. Researchers collected information supplied by individual states on reimbursement rates for primary care, obstetrics, hospital visits, radiology, psychotherapy, laboratory tests and surgeries.
Statewide averages were used in Alabama, Utah and Wisconsin, where rural providers are reimbursed at a higher rate.
During the study period, reimbursement for primary care grew 20%, while obstetrics grew 8.8% and all other services increased 8.7%, the report said. New Jersey, whose reimbursement rate is only 58% of the national average, had the lowest rates, while Alaska had the highest, with 205% of the national average.
Minnesota and New York were the only states that did not increase their rates during the study period, while increases of less than 5% were reported in Alabama, Alaska, Arkansas, California, Florida, Hawaii, West Virginia and Wisconsin. For all services nationwide, providers are paid 72 cents for the same services that earn them a dollar from Medicare. For primary care, the average is 66 cents; for obstetrics, its 93 cents.
Because states entered the study period at widely divergent starting points, comparing rate increases is of limited value. However, the researchers specifically noted that Oklahomawhose rates increased 58.9% (including 79.9% for primary-care services)was paying Medicaid providers 28% of what Medicare paid them, but had achieved parity with Medicare by 2008. During the study period, Idaho, Montana, Nebraska, New Mexico and North Dakota all increased their Medicaid rates above those paid by Medicare.
The report cites another study that said Medicaid reimbursement can affect whether a patient gets care in a doctors office as opposed to a hospital, and concluded that low rates seem to have contributed to the access problems faced by many enrollees.
The study was done in partnership with the Kaiser Commission on Medicaid and the Uninsured and the California HealthCare Foundation.Submit a letter to the Modern Physician Reader Blog. Please include your name, title, company and hometown. Modern Physician reserves the right to edit all submissions.