We simulated the effect of a 10 percent increase in the state-level Medicaid-to-Medicare fee indices (for all services) from their 2008 level on the proportion of US office-based physicians accepting new Medicaid patients in each state.59 A detailed description of the simulation methodology used to predict the proportion of office-based physicians accepting Medicaid patients is presented in Appendix D. The simulation exercise is based on the empirical findings of Decker (2012) and the data on the proportion of US office-based physicians accepting new Medicaid patients for each state reported in the same study.
Exhibit 25 summarizes the predicted proportion of US office-based physicians accepting new Medicaid patients by state. For example, in California the Medicaid-to-Medicare fee ratio in 2008 was substantially lower than the national average. Subsequently, only 57.1 percent of the office-based physicians in California were accepting new Medicaid patients. Based on the simulation we find that a 10 percent increase in the Medicaid-to-Medicare fee index in California (from 0.56 to 0.62) would increase the proportion of office-based physicians accepting new Medicaid patients in California from 57.1 percent to 59.7 percent (about 4.6 percent increase).
Exhibit 25: Proportion of US Office-based Physicians Accepting New Medicaid Patients
|States||Medicaid-to-Medicare Fee Index, All Services 2008||% of US office-based physicians accepting new Medicaid patients 2011||Predicted acceptance rate under 10% rise in Medicaid-to-Medicare Fee Index (Based on Decker, 2012) (Non-Linear Projection)|
Note: The predicted proportions are based on the estimated logit model in Decker (2012).
Next we analyzed the implication of our findings from the Medicare PCIP policy analysis in the context of the Medicaid-Medicare payment parity. We have already discussed that, based on our analysis, the number of Medicare primary care providers accepting new Medicare patients increased by almost 10 percent in response to the Medicare 10 percent PCIP policy (Exhibit 14). According to Zuckerman et al (2012) the US average Medicaid-to-Medicare fee ratio for primary care services in 2012 was about 0.59. Thus, Medicaid-Medicare payment parity would imply almost a 70 percent increase in Medicaid fees over the 2012 US average. Further, the findings by Decker (2012) suggest that in 2011 almost 66.2 percent office-based primary care physicians accepted new Medicaid patients.
Given the magnitude of the impact of the Medicare PCIP policy, if the Medicaid-Medicare payment parity policy at least triggers a 10 percent increase in Medicaid-to-Medicare fee ratio, then we would expect the US average of office-based primary care physicians accepting new Medicaid patients to go up to at least 72.8 percent. However, considering the 2012 US average, Medicaid-Medicare payment parity would imply a much bigger percentage increase in payments than 10 percent payment increase under the Medicare PCIP policy. It is challenging to use the estimated impact of PCIP program to extrapolate the impact of Medicaid-to-Medicare parity. This is because (1) in general parity would require a much bigger change in Medicaid-to-Medicare fee ratio (compared to the 10 percent PCIP payment); and (2) our PCIP analysis is limited in the sense that it is not capturing continuous variation in the incentive payment due to the nature of the program. Finally, the actual increase in the absolute value of payment under the Medicare and Medicaid payment policies would depend on the volume of primary care services and the current state Medicaid-Medicare fee index.
59 At this point state-level Medicaid-to-Medicare fee index are not available for 2011 and the proportion of physicians accepting new Medicaid patients are not readily available to Lewin by state in any year other than 2011. In future Lewin Group will explore the availability of such data to strengthen the analysis.