Study Finds Doctor Pay Raise Boosted Medicaid Access

Most states refused to keep funding a pay raise for Medicaid doctors this year, but the first national study of the policy shows it increased low-income patients' access to primary care.
by | January 21, 2015

As a federally funded pay raise for Medicaid doctors expired at the end of 2014, a common refrain among states that decided not to continue with their own money was a lack of evidence that it worked. A study released Wednesday by the New England Journal of Medicine is the first national effort to quantify the impact of the policy -- and it shows the pay bump provided a boost in patient access to doctors.

The 10-state study found that appointments to see primary doctors increased 7.7 percent on average when compared with a period before the launch of the pay raise.  Those results were weighed against a control group of privately insured patients, and they also showed that the most dramatic results were in states where pay was initially lower.

“The extent of the increase tracked with the extent of the Medicaid fee increase across the 10 states,” said Genevieve Kenny, one of the study’s authors and a senior healthy policy fellow at the Urban Institute, a think tank focused on economic and social policy.

The Medicaid payment increase, part of the Affordable Care Act, ran from 2013 through 2014 and included more money for primary-care doctors and some specialists. The goal was to encourage more doctors to see Medicaid patients as the program started its expansion. Medicaid pays less than Medicare -- about 60 percent -- and private insurance, and low pay routinely appears among the top reasons why doctors don’t take Medicaid patients.

The initiative raised pay to Medicare levels, which resulted in a 73-percent increase on average, according to the Urban Institute. But states set different payment rates, so the level of the boost after the initiative took effect ranged widely.

The states with the lowest initial pay in the study were Illinois, New Jersey, Pennsylvania and Texas -- all of which saw big increases in appointment availability, more than 10 percent. In Illinois, the increase was 18 percent. That group of states also helped researchers determine whether Medicaid expansion reduced patient access to doctors -- New Jersey and Illinois had already expanded, Texas and Pennsylvania had not -- and they found little to suggest it did.

“It’s certainly encouraging that the system was not demonstrating signs of having trouble serving new enrollees, but I think it’s something that needs to be watched over time,” Kenney said, noting that New Jersey and Illinois already had more generous eligibility before expansion took effect in 2014.

The concern among many policymakers and doctors is whether the expiration of the pay increase will hurt access this year as Medicaid rolls continue to swell but doctors potentially refuse new patients. Fifteen states, only one of which -- Iowa -- was included in the study, have reported that they’ll maintain the pay increase with their own funding. Another 12 reported that they’re undecided, but many have since reported that they won’t continue it.

Many have blamed an uneven rollout and flawed structure for the lack of data and questionable effectiveness of the program. For one, doctors are hard pressed to admit new patients when the payment increase is temporary, said Matt Salo, who heads the National Association of Medicaid Directors. But they also had to adapt the payments from a Medicare format, which caused administrative headaches and contributed to an uneven implementation, he said.

The study is welcome news, Salo said, but he argues more will need to be done in the coming years to prove the Medicaid pay raise a success. “I think one study that says ‘yes,’ that’s great, but we need more information to be able to decide declaratively,” he said.

Kenney and the study’s authors acknowledge that more needs to be done, particularly because they weren’t able to study whether the policy resulted in more doctors participating. The study examined existing doctors. Figuring out how many doctors entered Medicaid from the private market will take follow-up studies using various federal surveys and other data, she said.

“I would want to know whether the provider base changed in a meaningful way,” she said. “If it persisted over time, would it mean providers serving commercial and Medicaid really overlap to a much greater extent?”