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The adequacy of physician reimbursement for pediatric care under Medicaid
Insights
Medicaid physician reimbursement for pediatric care in 1989 was often inadequate, paying significantly less than private insurance and Medicare. This study analyzed state policies and found wide regional variations, particularly low rates in the Northeast.
Area of Science:
- Health Services Research
- Pediatric Health Policy
- Healthcare Economics
Background:
- Medicaid physician reimbursement is critical for pediatric care access.
- Previous analyses of 1989 Medicaid physician payment adequacy were limited.
- Understanding payment disparities is essential for improving care delivery.
Purpose of the Study:
- To examine 1989 Medicaid physician reimbursement for pediatric care across 47 states and D.C.
- To assess the adequacy of Medicaid payment rates compared to private and Medicare fees.
- To identify state and regional patterns in Medicaid physician reimbursement.
Main Methods:
- Analysis of state Medicaid reimbursement policies (payment methods, update frequency, fee schedules).
- Evaluation of fee data for common evaluation and management codes and screening visits.
- Comparison of Medicaid rates with regional private market fees and national Medicare fees.
Main Results:
- Most states used fixed fee schedules; many rates were not updated since 1985.
- Medicaid payments for established patients averaged less than two-thirds of market rates.
- Northeastern states generally had the lowest reimbursement rates, while Western states paid the highest.
Conclusions:
- Medicaid reimbursement rates require significant increases to approach private and Medicare levels.
- Addressing reimbursement disparities, especially in the Northeast, is crucial for pediatric provider participation.
- Improving access to pediatric care necessitates enhanced reimbursement and efforts to mitigate physician maldistribution.
Abstract:
This article examines 1989 Medicaid physician reimbursement for pediatric care in 47 states and the District of Columbia. To assess the adequacy of payment, several state reimbursement policies were analyzed, including physician payment methods, frequency of payment updates, and fee data for five common evaluation and management codes and two Early and Periodic Screening, Diagnosis, and Treatment visit categories. Physician payment rates were evaluated to determine overall state and regional patterns of Medicaid reimbursement. They were also compared with regional private market fee data and average national Medicare fees to assess their adequacy. The majority of state Medicaid programs used fixed fee schedules as their physician reimbursement method. Nearly one fourth of states that update their fees overall by physician specialty have not adjusted their rates since 1985 or before. Medicaid reimbursement rates for five commonly used evaluation and management Physicians' Current Procedural Terminology (4th ed) office visit codes and Early and Periodic Screening, Diagnosis, and Treatment screening and follow-up examinations varied substantially across states and among regions. States in the West paid the highest rates for most office visits, while Northeastern states generally paid the least. A comparison of Medicaid payment rates with private market fee data revealed that Medicaid payments for established patients averaged less than two thirds of market rates for pediatricians, family physicians, and general practitioners. New patient care is reimbursed somewhat better. Regional variations are substantial. In addition, a comparison of Medicaid payment rates with 1988 Medicare fee data showed that average Medicaid reimbursement rates were less than four fifths of average allowed Medicare charges. Policy implications include the need to increase Medicaid rates so that they are much closer to private insurance and Medicare rates, particularly in the Northeast and in selected states, in order to increase participation by pediatric providers in Medicaid. In addition, efforts to re-evaluate reimbursement relative to level of service, as used in Medicare's resource-based relative value scales, deserve further research. Finally, comparable access to comprehensive pediatric care especially in underserved urban areas will require not only improvements in physician reimbursement but also more deliberate efforts to affect the maldistribution of mainstream medical care. Approaches to measure the impact of enhanced reimbursement on access to care by Medicaid-eligible children are discussed.