Slow Payment Drives Physicians from Medicaid

By Neil Versel

November 18, 2008 | Slow payment—a condition that health-IT can fix—rather than low reimbursement rates may be driving thousands of physicians away from state Medicaid programs, a new study says.

The study, published Tuesday in the online edition of Health Affairs challenges the conventional wisdom that half of U.S. doctors are refusing to accept new Medicaid patients simply because the federally funded, state-administered programs often pay far less than commercial insurers.

“Medicaid payment rates matter, but the hassle factor also matters, and this study strongly suggests that higher Medicaid fees won't have the desired effect of increasing access if physicians have to wait months to get paid,” Center for Studying Health System Change (HSC) senior fellow Peter Cunningham says in a written statement. Cunningham co-authored the study with HSC senior researcher Ann O’Malley.

“If the fees are high, participation is low if it’s too much of a hassle to get paid,” adds John Hallock, director of corporate communications for athenahealth. The Watertown, Mass.-based health-IT firm crunched the numbers for HSC based on the voluminous data the company collects in processing billing and payments for medical practices.

Athenahealth actually approached HSC nearly two years ago after the Washington-based organization put out a survey showing that physicians increasingly were opting out of Medicaid, anecdotally because of falling reimbursement rates, Hallock tells Digital HealthCare & Productivity. But Todd Park, then chief operating officer of athenahealth, thought that there might be more to the story.

“We have the claims data to see if there’s a correlation [between slow reimbursement and Medicaid participation], and there is,” Hallock says. “You make it so hard for them to get paid… that they opt out,” he adds.

With funding from the Robert Wood Johnson Foundation, athenahealth analyzed information from HSC’s 2004-05 Community Tracking Study Physician Survey on physician willingness to treat Medicaid patients, and compared this to 2006 Medicaid claims data on average reimbursement times in 21 states.

Hallock says the findings are significant because 55 million people are on Medicaid rolls nationwide, more than the estimated 45 million to 47 million Americans who lack health insurance, and the Medicaid number may swell as job losses mount.

“This has got to be injected into the national debate on health care reform,” Hallock says. “There’s a massive access-to-care issue brewing here.”


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