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Medicaid mills: fact or fiction
Health Care Financing Review
|February 5, 1981
Summary
Most large Medicaid practices (LMPs) do not appear to be "Medicaid mills" providing low-quality care. However, a credentials gap exists, with LMP physicians often being less qualified than their peers.
Area of Science:
- Health Services Research
- Medical Economics
- Public Health Policy
Background:
- Physician nonparticipation in Medicaid programs limits access to care for low-income populations.
- This nonparticipation may lead to the rise of Large Medicaid Practices (LMPs), raising concerns about potential "Medicaid mills" and substandard care.
- Understanding the characteristics of LMPs is crucial for evaluating the quality of care within these settings.
Purpose of the Study:
- To examine the characteristics of Large Medicaid Practices (LMPs).
- To determine if LMPs function as "Medicaid mills" characterized by low-quality care.
- To identify physician demographics and practice patterns within LMPs.
Main Methods:
- Utilized Health Care Financing Administration (HCFA) survey data.
- Defined LMPs as practices with at least 30% of patients eligible for Medicaid.
- Analyzed practice characteristics, physician earnings, ancillary service use, staffing, cost markups, visit lengths, and physician qualifications.
Main Results:
- Nearly 60% of Medicaid patients in private practices are seen in LMPs, which constitute 14.5% of all practices.
- Most LMPs did not exhibit characteristics of "Medicaid mills" (e.g., widespread abuse of ancillary services, skimping on staff, excessive cost markups).
- A significant "credentials gap" was observed: LMP physicians were more likely to be older, non-board certified, and foreign medical graduates, indicating a disparity in qualifications.
Conclusions:
- LMPs, while serving a significant portion of Medicaid patients, generally do not appear to be "Medicaid mills" in terms of operational quality.
- Physician earnings and operational efficiencies in LMPs are comparable to or less than other practices.
- A notable disparity exists in physician qualifications within the Medicaid market, with a concentration of less credentialed physicians in LMPs.