Medicaid pay delays found to squeeze access

Washington -- Physician participation rates in Medicaid aren't just about the money, they're also about the time.

A recent analysis concluded that while pay is the primary factor in whether doctors see Medicaid patients, slow paychecks from states can negate some of the positive effects of higher fees. The analysis examined Medicaid participation, pay rates and payment speed for nearly 5,000 physicians in 21 states. Health Affairs published the study online Nov. 18.

Although the speed of Medicaid pay has no independent effect on participation, it can dampen the participation boost that otherwise would come by combining high pay and quick turnaround, the study concluded. Sixty-four percent of physicians in states with above-average pay were estimated to have accepted all new Medicaid patients in 2004-2005. But that percentage declined to 51% for doctors who received better-than-average pay at a below-average pace.

"This study strongly suggests that higher Medicaid fees won't have the desired effect of increasing patient access if physicians have to wait months to get paid," said Peter J. Cunningham, PhD, study co-author and senior fellow at the Center for Studying Health System Change, a health care research organization.

This conclusion is important because Medicaid is under enormous pressure from the slowing economy, said AMA Board of Trustees Chair Joseph M. Heyman, MD. "Eliminating administrative hurdles and ensuring adequate and timely Medicaid payments to physicians is vital to improve the viability of the program."

The pace of pay was based on 2006 statistics from Athenahealth, a billing services provider, and fee rates were based on a 2003 state survey, the most recent available. Participation levels came from the 2004-2005 Community Tracking Study Physician Survey.

The analysis was limited by the available information, the study acknowledged. However, the authors are confident that closing data gaps would not have affected the conclusion, said co-author Ann S. O'Malley, MD, MPH, senior health researcher for the Center for Studying Health System Change.

The study found a wide variation in pay timeliness for the 21 states in the survey. The slowest state in 2006 was Pennsylvania, which averaged 114.6 days per claim. Kansas was the fastest at 36.9 days per claim.

Medicaid pay in Pennsylvania has quickened in the past few years, according to Bernard Lynch, senior director of payer relations for the Pennsylvania Medical Society. Lingering implementation problems with a new online billing system in 2003-2004 may have contributed to the state's poor showing in the survey, he said.

Pennsylvania also has started paying more for evaluation and management services in the last two years, Lynch said. "There has been recognition that physician fees are relatively low compared to commercial payers."

The second slowest state was New York, at 111.5 days per claim. Doctors there are required to file a request to submit a claim, said Andrew Merritt, MD, a family physician and chair of the Medical Society of the State of New York's Health Care Services and Medicaid Committee. The state uses these controls mainly to prevent fraud and abuse, but it puts increased administrative work on all physicians, he said. "The hassle factor in dealing with them is way too high."

South Carolina is the second-fastest paying state for Medicaid, with an average of 37.3 days per claim, the study found. Gregory Tarasidis, MD, board chair of the South Carolina Medical Assn., agreed that doctors are paid in "a pretty timely fashion."

But the state's pay rate still causes issues, Dr. Tarasidis said. South Carolina recently rolled back a physician pay increase and may implement an additional pay cut to address its budget problems, which could lead some doctors to restrict the number of Medicaid patients they see, he said.