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Primary Care Physician (PCP) Supply and Health Reform Medicaid Expansions

Mismatch Between States with Largest Expected Medicaid Enrollment Growth and Supply of PCPs to Treat Medicaid Patients; Temporary Increase in Medicaid Reimbursement Unlikely to Help Much

News Release
March 17, 2011

FURTHER INFORMATION, CONTACT:
Alwyn Cassil (202) 264-3484 or [email protected]

WASHINGTON , DC—In much of the country, growth in Medicaid enrollment under health reform will greatly outpace growth in the number of primary care physicians willing to treat new Medicaid patients, according to a national study released today by the Center for Studying Health System Change (HSC).

And, temporary increases in Medicaid reimbursement meant to entice more primary care physicians into accepting Medicaid patients are unlikely to make much of a difference in the states facing the biggest enrollment jumps, according to the study funded by the Robert Wood Johnson Foundation (RWJF).

Under federal health reform, Medicaid eligibility will expand to cover as many as 16 million more poor and low-income adults by 2019. Nationally, 42 percent of primary care physicians  in 2008 were accepting all or most new Medicaid patients, compared with 61 percent of PCPs accepting all or most new Medicare patients and 84 percent accepting all or most privately insured patients. Given the unwillingness of many PCPs to treat new Medicaid patients, policy makers and others are concerned about adequate primary care capacity to meet the increased demand from new Medicaid patients.

The study found that states with the smallest number of primary care physicians per capita overall—generally in the South and Mountain West—potentially will see the largest percentage increases in Medicaid enrollment. In contrast, states with the largest number of PCPs per capita—primarily in the Northeast—will see more modest increases in Medicaid enrollment.

The law also increases Medicaid reimbursement rates for certain services provided by primary care physicians to 100 percent of Medicare rates in 2013 and 2014. The reimbursement increases will have much less impact in states with a relatively small number of PCPs accepting Medicaid patients now because many of these states already reimburse primary care at rates close to or exceeding 100 percent of Medicare.

“The study’s bottom line is that growth in Medicaid enrollment in much of the country will greatly outpace growth in the number of primary care physicians willing to treat new Medicaid patients resulting from increased reimbursement,” said HSC Senior Fellow Peter J. Cunningham, Ph.D., the study’s author.

The study also found that geographic differences in PCP acceptance of new Medicaid patients reflect differences in overall PCP supply, not geographic differences in PCPs’ willingness to treat Medicaid patients.

Based on information from HSC’s nationally representative 2008 Health Tracking Physician Survey, the study’s findings are detailed in a new HSC Research Brief—State Variation in Primary Care Physician Supply: Implications for Health Reform Medicaid Expansions—available online at www.hschange.org. Funded by RWJF, the survey includes responses from more than 4,700 physicians, and the response rate was 62 percent. The study sample was restricted 1,748 physicians who identified their primary specialty as general internal medicine, family practice or general pediatrics—the specialties eligible for increased Medicaid reimbursement.

The study classified states into three groups—low-, medium-, and high-PCP states—based on the ratio of PCPs to the nonelderly U.S. population in 2008, using the Health Resources and Services Administration  Area Resource File. Low-, medium-, and high-PCP states were determined based on the distribution of the U.S. population into these groups—25 percent of the U.S. population is in low-PCP states, 50 percent in medium-PCP states and 25 percent in high-PCP states.

Primary care physician supply varies considerably by region of the country. States with the highest levels of PCP supply—relative to the population—are concentrated almost entirely in the Mid-Atlantic and Northeast, while states with the lowest PCP supply are concentrated largely in the South and Mountain West.
     
Low- and high-PCP states also vary by state Medicaid program characteristics. Importantly, Medicaid reimbursement rates for primary care—as a percentage of Medicare rates—are much higher on average in low-PCP states (81.6%) compared to high-PCP states (54.8%) Low-PCP states also tend to have more restrictive Medicaid eligibility, as exemplified by the fact that only one—Arizona—currently allows Medicaid eligibility for at least some parents or childless adults with incomes above 100 percent of poverty.

 Accounting for differences in physician practice, patient and health care market characteristics, the study found that higher Medicaid reimbursement rates are associated with a greater probability of PCPs accepting all or most new Medicaid patients, although the effects are relatively modest. For PCPs, a 10-percentage point increase in the Medicaid/Medicare fee ratio for primary care was associated with only a 2.1-percentage-point increase in PCP Medicaid patient acceptance. Excluding pediatricians, the effects of reimbursement on Medicaid acceptance is slightly higher.

In other words, if PCPs in low-supply states were similar to PCPs in high-supply states on all measured factors other than level of reimbursement, Medicaid acceptance would be 5.7 percentage points higher in low-PCP states compared to high-PCP states.

One limitation of the study is that it treats the temporary Medicaid reimbursement increase as permanent, so estimates of the impact of the increases on primary care physicians’ willingness to accept new Medicaid patients are likely overstated.

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is affiliated with Mathematica Policy Research.

 

 

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