The Medicaid Primary Care Fee Bump and Participation in Medicaid by Primary Care Physicians

In 2012, most state Medicaid programs paid physicians significantly less for providing primary care compared to Medicare.  One Affordable Care Act (ACA) provision mandated that Medicaid payment rates equal Medicare for many primary care services provided by primary care physicians in 2013 and 2014 leading to a 50% increase in Medicaid-to-Medicare fee ratios on average across states, with some states experiencing substantially larger increases.  This fee bump was expected to be important since fewer physicians have accepted Medicaid patients in the past compared to patients with other insurance sources.  Past increases in Medicaid payment rates by states have also been associated with increased acceptance of Medicaid patients.  However, this is the first study of the effects of the national ACA fee bump using nationally-representative data, from the 2011-2014 National Electronic Health Records Survey (NEHRS), a survey supplement to the National Ambulatory Medicare Care Survey conducted by the National Center for Health Statistics.     

Mean differences in acceptance of new Medicaid patients among primary care physicians (defined as those in general/family practice, internal medicine and pediatrics) were calculated by year.  Comparisons were made between acceptance of new Medicaid patients as well as those with other sources of insurance, particularly between early 2013, before most states had implemented the fee bump, and mid-2014.   Multivariable analyses then predicted physician acceptance of new Medicaid patients controlling for physician age and gender, number of physicians in the office, physician specialty category,  county-year level  physicians per capita and the percent of the  population under the poverty level, and state and year fixed effects.  The independent variable of interest was an interaction between a variable identifying 2014 and a continuous variable measuring the magnitude of the fee bump by state measured as the percentage point increase in the primary care Medicaid-to-Medicare fee ratio. Models were estimated using linear probability using sample weights and standard errors were clustered by state. 

No overall increase in acceptance of new Medicaid patients was found during the sample period.  For example, about 65% of primary care physicians accepted new Medicaid patients in 2013 compared to 67% in 2014, though this difference was not statistically significant and did not differ significantly by the magnitude of the Medicaid fee bump by state.  No significant changes were found for other measures of participation in Medicaid, such as the probability that a physician had at least one Medicaid patient or the percent of Medicaid patients in his or her practice.   Although sample sizes were smaller in the NEHRS than in some other analyses using non nationally-representative data, the sample size in the NEHRS appears sufficient to rule out large effects in the dependent variables examined in response to the sizeable changes in fee ratios.  Although future analysis is likely to be fruitful, it is possible that the temporary nature of the fee increase limited physician response.