Paperwork, low pay driving physicians from Medicaid

Fewer physicians are accepting Medicaid patients, and those who do are becoming increasingly concentrated, according to a new national study. Low and slow reimbursement and the heavy paperwork burden are largely to blame.

The study, conducted by the Center for Studying Health System Change, found that in 2004-05, almost 15% of physicians reported receiving no Medicaid revenue, up from 13% in 1996-97. About 21% reported accepting no new Medicaid patients in 2004-05 -- a rate six times higher than for Medicare patients and five times that for privately insured patients.

Gary Floyd, MD, a pediatrician who serves as the medical director of urgent care and public policy for the Cook Children's Health Care System in Forth Worth, Texas, is no stranger to the forces driving the trend. About 38% of physicians in his state accept new Medicaid patients, down from 67% in 2000-01, a Texas Medical Assn. survey found.

"We're seeing more and more physicians dropping out," Dr. Floyd said. Conversely, the state's total Medicaid case load grew by 54% from fiscal year 2000 to 2005, according to the state's health and human services commission.

The burden then tends to fall on emergency departments, Dr. Floyd said. "That's where we see [Medicaid patients] the most, and when we ask about their primary care physician or a medical home, they don't have one."

Dr. Floyd cites two main factors for the shrinking number of physicians accepting Medicaid -- high administrative burden and low reimbursement rates, which cover about half the cost of a patient visit.

"Many physicians are deciding it's not worth the time and heartache to deal with that," he said.

The American Medical Association voiced concern over the report's findings. "This study highlights an access-to-care problem for millions of Americans," said J. Edward Hill, MD, AMA immediate past president. "America's Medicaid patients deserve access to health care, but government cuts to the program make this increasingly difficult."

Physician participation shifting

According to the study by the Center for Studying Health System Change (HSC), care for Medicaid patients is becoming increasingly concentrated among the minority of doctors who derive a big chunk of their revenue from the program. This is because physicians with lower levels of participation are becoming more reluctant to take on new Medicaid patients, the study explained.

In addition, Medicaid patients are more likely to receive care from physicians who practice in large groups, hospitals, academic medical centers and community health centers. That's because hospitals and larger groups, Dr Floyd said, can better tackle the paperwork and reimbursement issues, a view supported by the HSC study.

Among physicians accepting no new Medicaid patients in 2004-05, about 84% reported inadequate reimbursement as a moderate or very important reason for the decision. Billing requirements and paperwork were cited as reasons for not accepting new patients by 70% of physicians, while nearly 65% cited delayed pay. A smaller percentage of physicians reported having a full practice or expressed concerns about the high clinical burden of Medicaid patients.

Physicians in solo and small practices were more likely to cite these factors than were physicians in larger and institutional practices, the study found. About 35% of physicians in solo and two-physician practices were not accepting new Medicaid patients in 2004-05, up from 29% in 1996-97.

"It isn't clear whether the increasing concentration is harmful to Medicaid patients' access to care, since many large Medicaid providers are in areas where enrollees tend to live, such as inner cities and medically underserved areas," said Peter J. Cunningham, PhD, a senior fellow at HSC, a nonpartisan policy research organization funded principally by the Robert Wood Johnson Foundation.

"But if large Medicaid providers face increased financial pressures and rising patient demand, quality of care and access to some services could be negatively affected," said Dr. Cunningham, a co-author of the study.

Kids with disabilities feel the pinch in New York

Anne B. Francis, MD, a pediatrician with the 12-member Elmwood Pediatric Group in Rochester, N.Y., said children with multiple disabilities are hardest hit by limited access for Medicaid patients.

In Monroe County where she practices, some patients receive Medicaid managed care, which is funded for the most part through county taxes. Reimbursement rates for these patients are on par with those who have private insurance, she said.

But patients who have traditional Medicaid, and who tend to be the sickest or have the most complex conditions, often can't find a medical home or receive care from specialists because of low reimbursement. This, in turn, places undue strain on children's hospitals that are committed to caring for these patients, she said.

Dr. Francis' practice cannot afford to see new traditional Medicaid patients.

"It's a huge concern in New York state because of the burden on the counties," she said. "For people in counties that don't have Medicaid managed care and are on Medicaid, they have to travel long distances for care."

Meanwhile, the number of Medicaid patients continues to grow nationally. According to the Centers for Medicare & Medicaid Services, enrollment increased about 8% overall between 2000 and 2003. HSC also reports that Medicaid payment rates increased modestly relative to Medicare rates. In 1998, Medicaid reimbursement for physicians was 64% of Medicare rates, rising to 69% in 2003, according to a study conducted by HSC along with the Urban Institute.

"I think in some respects that [the increase] is due to the fact that Medicare fees were flat during that period," Dr. Cunningham said. "This modest increase isn't going to be enough to convince most physicians that Medicaid patients are profitable. It wasn't big enough to offset the pressures physicians are facing."

General internists and family physicians were the most likely to report that their practices are closed to new Medicaid patients, while pediatricians and specialists were the least likely to have stopped participating, the study said.

But the percentage of surgical specialists accepting no new program participants increased significantly, to almost 19% in 2004-05 from about 14% in 1996-97. The growth of outpatient surgery is seen as one factor. "More surgeons are getting away from that relationship with the hospital and have more discretion over whether they see Medicaid patients," Dr. Cunningham said.

Geography also makes a difference. Physicians in cities with populations greater than 200,000 were less likely to accept new Medicaid patients than were doctors in smaller towns or rural areas.

"If you're in a large urban area, there are a lot of other physicians where patients can go, so you may not feel the same community obligation that a rural physician does because [he or she is] the only one in a 10-mile radius," Dr. Cunningham said.