Health Policy$ense

Bumped-up Medicaid Fees for Primary Care Linked to Improved Appointment Availability

Did the two-year Medicaid “fee bump,” fully financed by the federal government, succeed in its goal of improving primary care availability for growing numbers of Medicaid patients? Most states, facing the decision of whether to use state funds to continue to pay for Medicaid primary care services at Medicare levels, were unconvinced, and Medicaid fees returned to previous levels in 34 states as of January 1, 2015. In a paper published today in the New England Journal of Medicine, LDI Executive Director Dan Polsky and co-authors at Penn and the Urban Institute provide the first evidence that the fee bump had its intended effect.

In a 10-state study before and after the pay bump, primary care appointment availability improved 7.7 percentage points for Medicaid patients, while remaining unchanged for privately insured patients. Wait times for appointments remained remarkably stable, at about one week for each group, indicating that increases in Medicaid appointment availability did not come at a cost of delaying time to care.

Polsky and colleagues analyzed two waves of data (one prior to the pay bump, one after) from their “secret shopper” study that involved calls to primary care offices in ten states. Trained field staff posed as Medicaid and privately-insured patients seeking new-patient primary care appointments. The availability of appointments for the Medicaid callers increased from 58.7% to 66.4% between the two waves, while it remained unchanged at 86% for the privately insured patients. Further, states with the highest fee increases tended to have the biggest increases in appointment availability, as shown below:

Medicaid Appointment Availability Difference and Medicaid Fee Bump

Note: Slope of the trend line is 0.125 (p value = 0.032)

Polsky explains:

“The positive Medicaid slope (above) implies that a 10% increase in Medicaid fees relative to Medicare is associated with an increase in appointment availability of approximately 1.25 percentage points (the effect of a 10% change in the fee ratio is derived by multiplying the estimated 0.125 change in appointment availability for a 1% change in fees by 10.)”

Dollars and cents of the Medicaid pay increase

Prior to the Affordable Care Act, Medicaid paid just 58% of Medicare fees, on average, for primary care services. This percentage varied significantly from state to state, ranging from 34%-137%. Since the fee bump brought Medicaid payments to Medicare levels from different starting points, the increases in payments varied dramatically by state. The table below lists the actual dollar amounts of the increase in the study states (from the authors’ supplementary appendix):

State decisions: an update

The Medicaid pay bump expired Dec. 31, 2014, and Congress did not extend it in its FY 2015 CRomnibus spending bill. States could continue the policy, but doing so required state funding (with regular federal Medicaid matching fund rates). The Kaiser Family Foundation reported in the fall that 15 states planned to continue the bump (at least in part), 24 states had decided not to continue, and 12 states were undecided. The Urban Institute found that states that chose not to extend the fee bump would have, on average, been responsible for greater payment increases than those that decided to continue it.

We recently contacted the remaining undecided states for an update. All told, 16 states and Washington D.C. have decided to continue while 34 states have declined, returning Medicaid reimbursements back to pre-2013 levels. Budgetary concerns seem to have played a role: the average pay increase in the states continuing the policy is 41%, compared to 62% in the states not continuing the policy. Interestingly, the decision to continue the pay bump is not correlated with the state’s decision to expand its Medicaid program, as shown below:

Of our ten study states, just two -- Iowa and Montana -- are continuing the fee bump.

Just a piece of the puzzle

A few words of caution: this new study is far from the final word on the pay bump, or on access to care for Medicaid patients. First, the study included only those offices that participated in Medicaid in both waves. Therefore, the results provide evidence that providers already accepting Medicaid patients were willing to offer appointments at a higher rate. However, the study was not designed to examine changes in the number of providers participating in Medicaid networks, an important component of the overall impact of the fee bump. More rigorous research on this effect is needed.

Second, “secret shopper” studies may yield different results about access than alternative methods. Austin Frakt discusses differences between measuring access at the provider level and assessing actual patients’ direct experiences. Patients report greater access to care when surveyed directly.

With these caveats in mind, the study’s results suggest that, despite significant challenges in implementation, the fee bump succeeded in improving access to primary care appointments for Medicaid beneficiaries, especially in states with previously low levels of Medicaid reimbursement. Going forward, however, many of the states with the lowest reimbursements are among the 34 that have declined to continue the payment increase. The study’s findings suggest that access to new patient primary care appointments for Medicaid beneficiaries in those states may suffer.

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Authors on the NEJM paper include Daniel Polsky, Michael Richards, Simon Basseyn, Douglas Wissoker, Genevieve M. Kenney, Stephen Zuckerman, and Karin V. Rhodes.