Paid more, doctors saw more Medicaid patients, Penn study finds

For two years, the Obama administration dramatically raised Medicaid reimbursements for primary-care physicians in the hope that they would see more poor patients. The idea was that states would jump in to continue at least part of the payments.

Few did, and the experiment ended Dec. 31, before researchers could report evidence of an impact.

Now they have.

Significantly more appointments for eligible patients were available during the higher-pay period than before, according to a study published online Wednesday in the New England Journal of Medicine. Trained workers posing as patients in calls to physicians who accepted Medicaid in 10 states were able to schedule appointments 66.4 percent of the time during the "Medicaid bump" vs. 58.7 percent before.

"I think it's a big finding. Especially when you look at states that had large changes in the amount they paid providers," said lead author Daniel Polsky, a University of Pennsylvania health economist.

New Jersey and Pennsylvania, both of which reimburse Medicaid doctors at some of the lowest rates in the country, were prime examples. While appointment availability was up by nearly eight percentage points among the 10 states studied, it increased by close to 11 points in New Jersey and 13 percentage points in Pennsylvania.

Another finding seems to defy widespread speculation last year that various aspects of Obamacare would overwhelm the nation's health system with new patients.

Waiting times for Medicaid appointments (four days in New Jersey, eight days in Pennsylvania, and six days among all the states) barely budged. The researchers also sought appointments for privately insured patients - they made up the control group - with similar results.

Polsky had expected to find longer waiting times, especially in states like New Jersey that expanded Medicaid last year, adding nearly 400,000 enrollees. He speculated that doctors extended their hours, brought in additional staff, or improved work flow.

"One thing it suggests is that there isn't [excessive] pressure" on doctors, said Polsky, executive director of Penn's Leonard Davis Institute of Health Economics.

Enticing more physicians to accept Medicaid is a nationwide challenge, especially with the expansion to lower and middle incomes in more than half of the states. (Pennsylvania began on Jan. 1, a year after most of them.)

Other researchers estimated two years ago that nearly one-third of physicians nationwide were not accepting new Medicaid patients, a rate that varied widely by specialty. Pennsylvania was not significantly different from the average. New Jersey had the highest rate of doctors not accepting Medicaid, 54 percent.

New Jersey also paid the second-lowest reimbursement to physicians in 2012, according to a survey by the Kaiser Commission on Medicaid and the Uninsured. Pennsylvania was 13th lowest.

In the hope of persuading more doctors to accept Medicaid, the Affordable Care Act used federal money to bring state Medicaid payment levels for primary-care providers up to federal Medicare payment levels for 2013 and 2014.

Because Medicaid rates vary by state, the raises differed widely. In New Jersey and Pennsylvania, physicians' pay rates doubled, on average. On Jan. 1, 2015, they fell again by half.

Polsky said he expected that the increase in available doctor appointments his team found would now drop again - and expressed hope that state officials would find his research compelling enough to consider raising rates.

Larry Downs, CEO of the Medical Society of New Jersey, said he believed that the issue, at least in his state, was not how much money is available but how it is allocated to other health sectors.

Medicaid also reimburses hospitals less than Medicare, for example, but the difference is less extreme. In New Jersey, Medicaid pays hospitals 72 percent of what it costs them to care for Medicaid patients, compared with 93 percent for Medicare, according to the state hospital association. The gap is similar in Pennsylvania.

"I think doctors would take 70 cents on the dollar. I would suggest that physicians are getting 20 to 25 cents on the dollar," Downs said. Rates are so low that sometimes specialists treat poor patients free rather than signing up for Medicaid reimbursement, he said.

Patients often report having a harder time finding specialists who accept Medicaid in either state than primary-care doctors, who were the only beneficiaries of the two-year raise.

The new study looked only at primary-care physicians who already accepted Medicaid. But Downs and his counterparts in Pennsylvania think that few doctors were persuaded to start accepting new patients.

Lucy Hornstein certainly wasn't.

"I would take them in a heartbeat. I feel terrible about it," said Hornstein, a solo family practitioner in Phoenixville. "But $35 for a visit" - the amount that Pennsylvania Medicaid reimburses for a typical appointment - "is simply not reasonable," she said. (New Jersey would pay about $21 for that same visit.)

After 25 years, Hornstein loves her work and said she is seeking not to get rich, but to get by.

"Over the last couple of years, I've only averaged about $80,000 a year," she said. Medicare pays her $77 for that same $35 office visit. Private insurance pays a little less. About 5 percent of her patients are uninsured, Hornstein said, and she accepts whatever they can afford.

Medicaid would cost her too much - not just in low pay but a time-consuming bureaucracy that abhors transparency.

"If Medicare is a bright, shiny, clear picture window," she said, "Medicaid is a basement brick wall with mud floors."

Medicaid physician reimbursement rates for the most common primary-care office visit:

                         2015*       2014**

South Jersey                              $20.60    $80.54

Southeastern Pennsylvania       $35.00    $77.43

* Medicaid reimbursement is set by states for coverage of poor and disabled.

** The federal government raised primary-care Medicaid rates for two years to the level it paid for Medicare coverage of elderly; they dropped back Jan. 1.

SOURCES: Pennsylvania Medical Society; Medical Society of New JerseyEndText