Medicaid Acceptance by Healthcare Providers Drops to 1-out-of-3

By Kev Coleman
HealthPocket, February 26, 2015

When HealthPocket first investigated Medicaid acceptance in 2013, it found that only 43% of the healthcare providers examined were formally listed as accepting Medicaid. Since the original 2013 study, Medicaid enrollment has continued to rise as the Affordable Care Act has led many states to increase the income eligibility range for the program. Medicaid, along with the Child Health Insurance Program (CHIP), currently covers approximately 1-in-5 people in the United States. This year, the temporary increase in Medicaid payments to primary care physicians discontinues with only 15 states indicating that they intend to maintain the payment increase (fully or partially). The reduction in Medicaid reimbursement to primary care physicians has brought with it a concern that Medicaid acceptance, already low among healthcare providers, will drop further.

HealthPocket found that in 2015 only 34% of the healthcare providers examined were listed as accepting Medicaid insurance. This represents a 21% decrease from the listings of Medicaid acceptance found in the 2013 data for the same categories of healthcare providers.

Since both the 2013 analysis and 2015 analysis relied upon the same government data source and provider record parameters, the marked decline in Medicaid acceptance is significant. In particular, the data calls into question whether the temporary increase in Medicaid payments to primary care physicians effected any lasting improvements to Medicaid acceptance.

Why Do Some Healthcare Providers Avoid Medicaid?

A common explanation given for Medicaid lower acceptance is the program’s reimbursement rate to healthcare providers. Medicaid typically pays 61% of what Medicare pays for the same outpatient physician services. To make matters worse, the Medicare payment benchmark is already lower than payments for the same services from private insurers. It is estimated that Medicare typically pays 80% of what commercial health insurers pay. Consequently, in comparison to commercial health insurance from private insurance companies, Medicaid payments represent a reduction on a reduction.

One of state governments’ responses to the problem is the use of managed care organizations to serve some portion of a state’s Medicaid population. However, as a 2014 Health & Human Services study noted, state standards regarding the ratio of primary care physicians to Medicaid managed care enrollees can vary widely (1-to-100 to 1-to-2,500) as do their methods for determining compliance with these standards. Consequently, Medicaid enrollees can face the prospect of long distances and/or long waits to access care under the program.

From the Conclusion

HealthPocket’s comparison of Medicaid acceptance listings from 2013 to 2015 illuminates an alarming trend for those dependent on Medicaid for their healthcare: a reduction in Medicaid acceptance occurring during a period of Medicaid enrollee expansion. How federal and state governments will reverse this trend remains to be seen. The temporary increase in Medicaid payments to primary care physicians from 2013 to 2014 does not appear to have produced a lasting increase in Medicaid acceptance and the expiration of this increase may contribute to further healthcare provider attrition from the Medicaid program.…


Guest Comment:

By Richard Gottfried, Chair, Committee on Health, New York State Assembly, and sponsor of A05062 (S03525), “The New York Health Act”

If the Medicaid recipient’s doctor were paid the same as my doctor, this wouldn’t be a problem.  And if we were all in the same health plan, the wealthy and well-connected would see to it that their doctors were paid fairly, and the rest of us (and our doctors) would share the benefit.  If we’re all in the same boat, we’ll all do better.