Medicaid fees and the Medicare fee schedule: an update

Area of Science:

• Health Economics
• Public Health Policy
• Healthcare Payment Systems

Background:

• Medicaid physician fees are critical for provider participation and patient access to care.
• Understanding fee trends is essential for evaluating healthcare access and equity.
• Previous analyses have not comprehensively tracked Medicaid fee changes relative to Medicare.

Purpose of the Study:

• To analyze the changes in maximum allowable Medicaid physician fees from 1990 to 1993.
• To compare Medicaid fees with the Medicare Fee Schedule (MFS).
• To identify variations in Medicaid fee levels across services, states, and regions.

Main Methods:

• Collected data on maximum allowable Medicaid physician fees for 1993.
• Compared 1993 Medicaid fees with 1990 Medicaid data.
• Benchmarked Medicaid fees against the fully phased-in Medicare Fee Schedule (MFS).

Main Results:

• Medicaid physician fees demonstrated an average growth of approximately 14% between 1990 and 1993.
• Significant variations in Medicaid payment levels persist across different service types, states, and census divisions.
• On average, Medicaid fees remained substantially lower than MFS rates, with a 27% deficit for the average Medicaid enrollee.
• Primary care services experienced particularly low reimbursement, averaging 32% less than MFS rates.

Conclusions:

• Despite nominal increases, Medicaid physician fees lag significantly behind Medicare, potentially impacting provider availability.
• Considerable geographic and service-based disparities in Medicaid reimbursement necessitate further policy attention.
• The findings highlight the need for policies aimed at aligning Medicaid fees more closely with Medicare to ensure equitable access to care.