Reduced Physician Payments Associated with Less Use of Physician Office Care and more Use of Emergency Rooms by Dual-eligibles
We expand on prior work by estimating difference-in-difference models with administrative data from 1999-2012 in order to analyze how policy changes over time have affected access to care for QMBs compared to Medicare-only enrollees. We compiled information about “lesser of” policies and Medicaid fees from the Kaiser Family Foundation, MACPAC, and the Urban Institute, supplemented with primary research on the timing of state policy changes. We also explored the effect of Medicaid payment rates for primary care services relative to Medicare. Those specifications were limited to a subset of years because of the availability of Medicaid fee data, but produced broadly similar results. In addition, we estimated the effects of policies on subsets of beneficiaries with diagnoses of diabetes, hypertension, chronic obstructive pulmonary disease, or congestive heart failure.
During our study period, duals experienced an increase in emergency room (ER) visits and a decrease in primary care visits relative to Medicare-only enrollees. We found that “lesser of” policies were associated with both of those changes. While magnitudes were similar across specifications, statistical significance varied. The adoption of a “lesser of” policy increased the probability of having any ER visit by 7 percent for duals relative to Medicare-only enrollees in the full sample, from a baseline of 23.1 percent in 1999. The effect on primary care visits was smaller—a 2 percent decline relative to a baseline of 3.3 visits in 1999—perhaps suggesting that our measures of preventive care use are noisy. Results were similar for our chronic condition subsets. Together, our results suggest that state adoption of “lesser of” policies—and the attendant reduction in physician payment rates—is associated with reduced access to primary care and more emergency events for duals over time.