Assessing the New Federalism is a multiyear Urban Institute project designed to analyze the devolution of responsibility for social programs from the federal government to the states, focusing primarily on health care, income security, employment and training programs, and social services. Alan Weil is the project director. Researchers monitor program changes and fiscal developments. In collaboration with Child Trends, the project studies changes in family well-being. The project aims to provide timely, nonpartisan information to inform public debate and to help state and local decisionmakers carry out their new responsibilities more effectively.
Key components of the project include a household survey, studies of policies in 13 states, and a database with information on all states and the District of Columbia, available at the Urban Institute's Web site. This paper is one in a series of discussion papers analyzing information from these and other sources.
The project has received funding from the Annie E. Casey Foundation, the W.K. Kellogg Foundation, the Robert Wood Johnson Foundation, the Henry J. Kaiser Family Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation, the Charles Stewart Mott Foundation, the David and Lucile Packard Foundation, the McKnight Foundation, the Commonwealth Fund, the Stuart Foundation, the Weingart Foundation, the Fund for New Jersey, the Lynde and Harry Bradley Foundation, the Joyce Foundation, and the Rockerfeller Foundation.
The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
Contents
Background
Data Collection
Results
Medicaid Fees in 1998
Changes in Medicaid Fees: 1993-98
Medicaid Fee Levels Relative to Medicare, 1998
Changes in Medicaid Fee Levels Relative to Medicare, 1993-98
Discussion
References
Appendix
About the Author
Background
During the past decade, states have expanded the role of managed care within the Medicaid program as a means of expanding access and decreasing costs (Holahan et al. 1998). Between 1991 and 1997, Medicaid managed care (MMC) enrollment grew from less than 10 percent to almost 50 percent of Medicaid beneficiaries. This change has sparked interest in research on Medicaid payments to capitated health plans (Holahan et al. 1999). However, few states have extended MMC to disabled and elderly populations, which account for a disproportionate share of Medicaid spending relative to their numbers. In addition, many states that have moved to MMC have not chosen capitation. Instead, they are relying on primary care case managers (PCCMs) that often continue to be paid on a fee-for-service basis.1 In 1997, over 70 percent of Medicaid enrollees in the United States received services in a fee-for-service (FFS) or PCCM system (Zuckerman 1997).
Given the continued reliance on fee-for-service payment within Medicaid, understanding the FFS component of Medicaid is still important to understanding the Medicaid program as a whole. In fact, significant expansions in Medicaid coverage in recent years may only translate into increased access if physician fees are high enough to ensure that physicians participate in the program. Research continues to suggest that physician fee levels affect both access and outcomes for Medicaid patients. A number of qualitative and quantitative studies show that physicians' decisions to provide care to Medicaid-enrolled patients are related both to Medicaid fee levels and to such fee levels relative to other insurance programs (Sloan, Cromwell, and Mitchell 1978; Mitchell 1991; Perloff, Kletke, and Necherman 1987; Showalter 1997; Wiener et al. 1998). These studies show that, as Medicaid fee levels increase, physicians are more likely to participate in the program, and those participating may treat more Medicaid patients. Other work suggests that Medicaid fees affect the coordination of care for Medicaid patients (Fox and Phua 1995) or the site at which a Medicaid patient is treated (Gruber, Adams, and Newhouse 1997; Cohen and Cunningham 1995).
This study uses data on Medicaid fees in 1993 and 1998 and information on Medicare fees to provide policymakers and analysts with more recent documentation of trends in Medicaid fees. Updating work by Holahan (1991) and Norton (1995), this article provides new information on the variation in physician fees across the country, describes changes in Medicaid fees from 1993 to 1998, and evaluates Medicaid physician fees relative to Medicare physician fees in 1998 as well as changes in Medicaid physician fees relative to Medicare physician fees from 1993 to 1998.
See the PDF for complete report.
Notes
1. Two states with major PCCM programs in 1998—Florida and Michigan—reported that the fees reflected in their surveys applied to both the PCCM and fee-for-service components of their Medicaid programs.
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Disclaimer: The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
