The
NEW ENGLA ND JOURNAL
of
MEDICINE
Perspective december 18, 2014
Medicaid Payments and Access to Care Sara Rosenbaum, J.D.
W
ith more than 66 million beneficiaries, Med icaid is the United States’ largest insurer, and its impact on health insurance coverage,1 access to care,2 and the health of the poor has been substantial. But historically, Medicaid has faced a major challenge — a relatively low rate of physician participation. In its March 2011 report to Congress, the Medicaid and CHIP (Children’s Health Insurance Program) Payment and Access Commission (MACPAC, Congress’s Medicaid advisory panel) pointed out that the Medicaid population disproportionately resides in medically underserved communities with serious shortages of primary care providers3 and that the problem of isolation is confounded by low physician-participation rates. According to MACPAC, in 2009, when 88% of office-based physicians indicated that they would accept new privately insured patients, only 65% were accepting new Medicaid patients.
Extensive research suggests that many factors contribute to low physician participation: complex program requirements, payment delays, and concerns about managing the care of patients with high levels of health and social risk. But research also shows that low fees play a key role and that substantial payment increases may be needed to alter physicians’ behavior. In a study conducted for the Kaiser Family Foundation, the Urban Institute estimated that in 2012, Medicaid physician fees averaged about 66% of Medicare payments and that the Medicaid–Medicare pay disparity was widening. When only primary care services were considered, researchers found that the Medicaid–Medicare ratio dipped to 58% and ranged from
37% in Rhode Island to 140% in North Dakota (see map).4 The findings show that though a few state Medicaid programs may be willing to pay Medicare rates or higher to encourage access, state payment norms are well below that level. The physician-participation problem appears to affect certain beneficiaries more than others. Studies show that Medicaid- enrolled children have access to care at rates similar to those among privately insured children. But the Kaiser Family Foundation also reports that although Medicaid improves primary care access among working-age adult beneficiaries to levels similar to those seen among privately insured adults, Medicaid-enrolled adults tend to face greater access barriers to care overall. Although the causes go beyond payment alone, low payment rates play a key role, as evidenced in studies of access to specialty care. Low payments can also affect the sur-
n engl j med 371;25 nejm.org december 18, 2014
The New England Journal of Medicine Downloaded from nejm.org on December 28, 2014. For personal use only. No other uses without permission. Copyright © 2014 Massachusetts Medical Society. All rights reserved.
2345
PERS PE C T IV E
Medicaid Payments and Access to Care
New Hampshire
Washington
Maine
Vermont
Montana
North Dakota
Minnesota
Oregon
Massachusetts Idaho
Wisconsin
South Dakota
New York
Michigan
Wyoming Iowa Nebraska
Nevada
Illinois
Utah
Indiana
Kansas
New Jersey
Ohio
Delaware West Virginia Virginia
Colorado
California
Rhode Island Connecticut
Pennsylvania
Kentucky
Missouri
Maryland Washington, D.C.
North Carolina Arizona
Tennessee Oklahoma
New Mexico
South Carolina
Arkansas Mississippi
Georgia Alabama
Texas Louisiana
Florida
Hawaii
1.00 (3 states) No Medicaid FSS program (1 state)
Alaska
States’ Ratios of Medicaid Physician Fees to Medicare Physician Fees, for All Services, 2012. Data are from the Kaiser Family Foundation and the Urban Institute.
vival and capacity of specialized providers, such as long-term care programs that depend predominantly on Medicaid. For good reason, primary care tends to be the first area of focus in any discussion of access in Medicaid. With a pronounced and growing shortage of primary care professionals — a shortage that’s estimated to reach 30,000 by 2015 — depressed Medicaid participation among available physicians is a major cause for concern. In the case of primary care, mitigation strategies exist. Safety-net providers such as community health centers play a vital role in 2346
reducing the access gap in the communities they serve. But health centers face their own staffing problems. Furthermore, they can be established only in communities designated as medically underserved, and despite major growth over the past 25 years, such health centers currently reach only about one third of the medically underserved U.S. population. Specialty care arguably presents the more serious Medicaid access problem, especially since there is no obvious mitigation strategy for it comparable to that offered by community health centers. Pub-
n engl j med 371;25
nejm.org
lic, teaching, and mission-driven hospitals play a critical role in access to specialty care, but their numbers and geographic reach are limited. The Commonwealth Fund reports that low payment rates are the principal cause of reduced specialist participation,5 and though it has identified innovations that could mitigate the problem — such as use of telehealth and specialized midlevel professionals, as well as an expanded role for primary care with specialist backup — such workarounds can go only so far. Where is federal policy in all this? Among the hot-button issues
december 18, 2014
The New England Journal of Medicine Downloaded from nejm.org on December 28, 2014. For personal use only. No other uses without permission. Copyright © 2014 Massachusetts Medical Society. All rights reserved.
PE R S PE C T IV E
Medicaid Payments and Access to Care
that define the tense federal– state Medicaid relationship, no issue has historically been hotter than access to care, because of fierce state resistance to federal oversight of provider payment. This tension has led Congress to gradually strip most providerpayment provisions out of the Medicaid statute. But one basic legal principle remains: the socalled equal-access provision, which specifies that as a condition of federal funding, states’ Medicaid provider payments must be “sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.” The Department of Health and Human Services (HHS), however, has never implemented this provision through regulations. In 2011, the agency issued proposed rules that did not address the payment issue head on but instead would have made states responsible for periodically measuring beneficiaries’ access to covered services and would have barred rate reductions absent such access studies. Even this initial implementation step never happened; the proposed rule simply vanished. Under the Affordable Care Act, Congress funded a 2-year pay increase for Medicaid primary care services in order to boost primary care payment rates to Medicare levels. In its Kaiser study, the Urban Institute estimated that the pay An audio interview with Dr. Rosenbaum bump would inis available at NEJM.org crease fees by 73%. But the increase, which took effect in 2013, expires at the end of 2014, with no renewal in sight. News reports suggest that nearly all states plan to roll back pri-
mary care payments to 2012 levels, despite anecdotal evidence reported by some states of increases in provider participation. Faced with payment rates that in some cases may be dangerously low, beneficiaries and providers have turned to litigation. A fundamental question, however, is whether providers and beneficiaries can go to court when provider payments may be too low to ensure appropriate access to care. In 2012, in Douglas v. Independent Living Center of Southern California, which involved a challenge to deep rate cuts enacted by California’s legislature, the Supreme Court deflected this question. Now, however, the issue is back; this term, the Court will hear Armstrong v. Exceptional Child Center, Inc., which again raises the question of whether beneficiaries and providers can protest low Medicaid payments in court. Douglas involved a rate cut; Armstrong, in contrast, involves a state’s refusal to pay properly. The situation here is one of a state’s failure to pay a provider an HHS-approved rate, with no HHS effort to enforce its own requirements. Even if HHS could be persuaded to act in a situation in which a state might not be following the law despite claiming millions of dollars in federal support, beneficiaries have no right under Medicaid law to seek the agency’s help. Observers do not expect another deflection; in his Douglas dissent, Chief Justice John Roberts made clear his objection to court involvement in Medicaidaccess cases, arguing that HHS — not the courts — should be the sole enforcement authority. Should the Court rule against the plaintiffs, they will be left with no remedy, other than to implore the Idaho legislature to reconsider. The Armstrong situation may be
more serious than that in Douglas. Douglas involved an ongoing and active federal review, however slow it may have been. In Armstrong, the federal government has chosen to play no affirmative role whatsoever. To deny access to the courts in a case like this runs contrary to long-standing Supreme Court precedent, which has permitted private parties to go to court when facing a threat of unlawful state action. There is a deeper issue here, of course: getting the federal government to do what it is supposed to do. That means issuing the long-delayed access regulations, providing technical assistance to states, and maintaining active and ongoing oversight of state program management. Medicaid beneficiaries deserve no less. Disclosure forms provided by the author are available with the full text of this article at NEJM.org. From the Department of Health Policy, George Washington University School of Public Health and Health Services, Washington, DC. 1. Sommers BD, Musco T, Finegold K, Gunja MZ, Burke A, McDowell AM. Health reform and changes in health insurance coverage in 2014. N Engl J Med 2014;371:867-74. 2. Sommers BD, Baicker K, Epstein AM. Mortality and access to care among adults after state Medicaid expansions. N Engl J Med 2012;367:1025-34. 3. Examining access to care in Medicaid and CHIP. In: Medicaid and CHIP Payment and Access Commission. Report to the Congress on Medicaid and CHIP. March 2011: 124-54 (http://www.macpac.gov/reports). 4. Zuckerman S, Goin D. How much will Medicaid physician fees for primary care rise in 2013? Evidence from a 2012 survey of physician fees. Washington, DC: Kaiser Family Foundation, December 2012 (http:// kaiserfamilyfoundation.files.wordpress.com/ 2013/01/8398.pdf). 5. Felland LE, Lechner A, Sommers A. Improving access to specialty care for Medicaid patients: policy issues and options. New York: The Commonwealth Fund, 2013 (http:// www.commonwealthfund.org/~/media/files/ publications/fund-report/2013/jun/1691_ felland_improving_access_specialty_care_ medicaid_v2.pdf). DOI: 10.1056/NEJMp1412488 Copyright © 2014 Massachusetts Medical Society.
n engl j med 371;25 nejm.org december 18, 2014
The New England Journal of Medicine Downloaded from nejm.org on December 28, 2014. For personal use only. No other uses without permission. Copyright © 2014 Massachusetts Medical Society. All rights reserved.
2347
NEW ENGLA ND JOURNAL
of
MEDICINE
Perspective december 18, 2014
Medicaid Payments and Access to Care Sara Rosenbaum, J.D.
W
ith more than 66 million beneficiaries, Med icaid is the United States’ largest insurer, and its impact on health insurance coverage,1 access to care,2 and the health of the poor has been substantial. But historically, Medicaid has faced a major challenge — a relatively low rate of physician participation. In its March 2011 report to Congress, the Medicaid and CHIP (Children’s Health Insurance Program) Payment and Access Commission (MACPAC, Congress’s Medicaid advisory panel) pointed out that the Medicaid population disproportionately resides in medically underserved communities with serious shortages of primary care providers3 and that the problem of isolation is confounded by low physician-participation rates. According to MACPAC, in 2009, when 88% of office-based physicians indicated that they would accept new privately insured patients, only 65% were accepting new Medicaid patients.
Extensive research suggests that many factors contribute to low physician participation: complex program requirements, payment delays, and concerns about managing the care of patients with high levels of health and social risk. But research also shows that low fees play a key role and that substantial payment increases may be needed to alter physicians’ behavior. In a study conducted for the Kaiser Family Foundation, the Urban Institute estimated that in 2012, Medicaid physician fees averaged about 66% of Medicare payments and that the Medicaid–Medicare pay disparity was widening. When only primary care services were considered, researchers found that the Medicaid–Medicare ratio dipped to 58% and ranged from
37% in Rhode Island to 140% in North Dakota (see map).4 The findings show that though a few state Medicaid programs may be willing to pay Medicare rates or higher to encourage access, state payment norms are well below that level. The physician-participation problem appears to affect certain beneficiaries more than others. Studies show that Medicaid- enrolled children have access to care at rates similar to those among privately insured children. But the Kaiser Family Foundation also reports that although Medicaid improves primary care access among working-age adult beneficiaries to levels similar to those seen among privately insured adults, Medicaid-enrolled adults tend to face greater access barriers to care overall. Although the causes go beyond payment alone, low payment rates play a key role, as evidenced in studies of access to specialty care. Low payments can also affect the sur-
n engl j med 371;25 nejm.org december 18, 2014
The New England Journal of Medicine Downloaded from nejm.org on December 28, 2014. For personal use only. No other uses without permission. Copyright © 2014 Massachusetts Medical Society. All rights reserved.
2345
PERS PE C T IV E
Medicaid Payments and Access to Care
New Hampshire
Washington
Maine
Vermont
Montana
North Dakota
Minnesota
Oregon
Massachusetts Idaho
Wisconsin
South Dakota
New York
Michigan
Wyoming Iowa Nebraska
Nevada
Illinois
Utah
Indiana
Kansas
New Jersey
Ohio
Delaware West Virginia Virginia
Colorado
California
Rhode Island Connecticut
Pennsylvania
Kentucky
Missouri
Maryland Washington, D.C.
North Carolina Arizona
Tennessee Oklahoma
New Mexico
South Carolina
Arkansas Mississippi
Georgia Alabama
Texas Louisiana
Florida
Hawaii
1.00 (3 states) No Medicaid FSS program (1 state)
Alaska
States’ Ratios of Medicaid Physician Fees to Medicare Physician Fees, for All Services, 2012. Data are from the Kaiser Family Foundation and the Urban Institute.
vival and capacity of specialized providers, such as long-term care programs that depend predominantly on Medicaid. For good reason, primary care tends to be the first area of focus in any discussion of access in Medicaid. With a pronounced and growing shortage of primary care professionals — a shortage that’s estimated to reach 30,000 by 2015 — depressed Medicaid participation among available physicians is a major cause for concern. In the case of primary care, mitigation strategies exist. Safety-net providers such as community health centers play a vital role in 2346
reducing the access gap in the communities they serve. But health centers face their own staffing problems. Furthermore, they can be established only in communities designated as medically underserved, and despite major growth over the past 25 years, such health centers currently reach only about one third of the medically underserved U.S. population. Specialty care arguably presents the more serious Medicaid access problem, especially since there is no obvious mitigation strategy for it comparable to that offered by community health centers. Pub-
n engl j med 371;25
nejm.org
lic, teaching, and mission-driven hospitals play a critical role in access to specialty care, but their numbers and geographic reach are limited. The Commonwealth Fund reports that low payment rates are the principal cause of reduced specialist participation,5 and though it has identified innovations that could mitigate the problem — such as use of telehealth and specialized midlevel professionals, as well as an expanded role for primary care with specialist backup — such workarounds can go only so far. Where is federal policy in all this? Among the hot-button issues
december 18, 2014
The New England Journal of Medicine Downloaded from nejm.org on December 28, 2014. For personal use only. No other uses without permission. Copyright © 2014 Massachusetts Medical Society. All rights reserved.
PE R S PE C T IV E
Medicaid Payments and Access to Care
that define the tense federal– state Medicaid relationship, no issue has historically been hotter than access to care, because of fierce state resistance to federal oversight of provider payment. This tension has led Congress to gradually strip most providerpayment provisions out of the Medicaid statute. But one basic legal principle remains: the socalled equal-access provision, which specifies that as a condition of federal funding, states’ Medicaid provider payments must be “sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.” The Department of Health and Human Services (HHS), however, has never implemented this provision through regulations. In 2011, the agency issued proposed rules that did not address the payment issue head on but instead would have made states responsible for periodically measuring beneficiaries’ access to covered services and would have barred rate reductions absent such access studies. Even this initial implementation step never happened; the proposed rule simply vanished. Under the Affordable Care Act, Congress funded a 2-year pay increase for Medicaid primary care services in order to boost primary care payment rates to Medicare levels. In its Kaiser study, the Urban Institute estimated that the pay An audio interview with Dr. Rosenbaum bump would inis available at NEJM.org crease fees by 73%. But the increase, which took effect in 2013, expires at the end of 2014, with no renewal in sight. News reports suggest that nearly all states plan to roll back pri-
mary care payments to 2012 levels, despite anecdotal evidence reported by some states of increases in provider participation. Faced with payment rates that in some cases may be dangerously low, beneficiaries and providers have turned to litigation. A fundamental question, however, is whether providers and beneficiaries can go to court when provider payments may be too low to ensure appropriate access to care. In 2012, in Douglas v. Independent Living Center of Southern California, which involved a challenge to deep rate cuts enacted by California’s legislature, the Supreme Court deflected this question. Now, however, the issue is back; this term, the Court will hear Armstrong v. Exceptional Child Center, Inc., which again raises the question of whether beneficiaries and providers can protest low Medicaid payments in court. Douglas involved a rate cut; Armstrong, in contrast, involves a state’s refusal to pay properly. The situation here is one of a state’s failure to pay a provider an HHS-approved rate, with no HHS effort to enforce its own requirements. Even if HHS could be persuaded to act in a situation in which a state might not be following the law despite claiming millions of dollars in federal support, beneficiaries have no right under Medicaid law to seek the agency’s help. Observers do not expect another deflection; in his Douglas dissent, Chief Justice John Roberts made clear his objection to court involvement in Medicaidaccess cases, arguing that HHS — not the courts — should be the sole enforcement authority. Should the Court rule against the plaintiffs, they will be left with no remedy, other than to implore the Idaho legislature to reconsider. The Armstrong situation may be
more serious than that in Douglas. Douglas involved an ongoing and active federal review, however slow it may have been. In Armstrong, the federal government has chosen to play no affirmative role whatsoever. To deny access to the courts in a case like this runs contrary to long-standing Supreme Court precedent, which has permitted private parties to go to court when facing a threat of unlawful state action. There is a deeper issue here, of course: getting the federal government to do what it is supposed to do. That means issuing the long-delayed access regulations, providing technical assistance to states, and maintaining active and ongoing oversight of state program management. Medicaid beneficiaries deserve no less. Disclosure forms provided by the author are available with the full text of this article at NEJM.org. From the Department of Health Policy, George Washington University School of Public Health and Health Services, Washington, DC. 1. Sommers BD, Musco T, Finegold K, Gunja MZ, Burke A, McDowell AM. Health reform and changes in health insurance coverage in 2014. N Engl J Med 2014;371:867-74. 2. Sommers BD, Baicker K, Epstein AM. Mortality and access to care among adults after state Medicaid expansions. N Engl J Med 2012;367:1025-34. 3. Examining access to care in Medicaid and CHIP. In: Medicaid and CHIP Payment and Access Commission. Report to the Congress on Medicaid and CHIP. March 2011: 124-54 (http://www.macpac.gov/reports). 4. Zuckerman S, Goin D. How much will Medicaid physician fees for primary care rise in 2013? Evidence from a 2012 survey of physician fees. Washington, DC: Kaiser Family Foundation, December 2012 (http:// kaiserfamilyfoundation.files.wordpress.com/ 2013/01/8398.pdf). 5. Felland LE, Lechner A, Sommers A. Improving access to specialty care for Medicaid patients: policy issues and options. New York: The Commonwealth Fund, 2013 (http:// www.commonwealthfund.org/~/media/files/ publications/fund-report/2013/jun/1691_ felland_improving_access_specialty_care_ medicaid_v2.pdf). DOI: 10.1056/NEJMp1412488 Copyright © 2014 Massachusetts Medical Society.
n engl j med 371;25 nejm.org december 18, 2014
The New England Journal of Medicine Downloaded from nejm.org on December 28, 2014. For personal use only. No other uses without permission. Copyright © 2014 Massachusetts Medical Society. All rights reserved.
2347
