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The Effect of Medicaid Physician Fee Increases on Health Care Access, Utilization, and Expenditures

Objective: To evaluate the effect of Medicaid fee changes on health care access, utilization, and spending for Medicaid beneficiaries.

Data Source: We use the 2008 and 2012 waves of the Medical Expenditure Panel Survey linked to statelevel MedicaidtoMedicare primary care reimbursement ratios obtained through surveys conducted by the Urban Institute. We also incorporate data from the Current Population Survey and the Area Resource Files.

Study Design: Using a control group made up of the lowincome privately insured, we conduct a differenceindifferences analysis to assess the relationship between Medicaid fee changes and access to care, utilization of health care services, and outofpocket medical expenditures for Medicaid enrollees.

Principal Findings: We find that an increase in the MedicaidtoMedicare payment ratio for primary care services results in an increase in outpatient physician visits, emergency department utilization, and prescription fills, but only minor improvements in access to care. In addition, we report an increase in total annual outofpocket expenditures and spending on prescription medications.

Conclusions: Compared to the lowincome privately insured, increased primary care reimbursement for Medicaid beneficiaries leads to higher utilization and outofpocket spending for Medicaid enrollees.

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