New evidence of state variation in Medicaid payment policies for dual Medicare-Medicaid enrollees

Abstract

Objective: To develop the first longitudinal database of state Medicaid policies for paying the cost sharing in Medicare Part B for services provided to dual Medicare-Medicaid enrollees ("duals") and an index summarizing the impact of these policies on payments for physician office services.

Data sources: Medicaid policy data collected from electronic sources and inquiries with states.

Study design: We constructed a national database of Medicaid payment policies for the period 2004-2018, consolidating information from online Medicaid policy documents, state laws, and policy data reported to us by state Medicaid programs. Using this database and state Medicaid fee schedules, we constructed a Medicaid payment index for duals. This index represented the proportion of the Medicare allowed amount that physicians would expect to be paid from Medicare and Medicaid for a subset of physician office services (evaluation and management services) based on annual state payment policies and Medicaid fee schedules.

Principal findings: In 2018, 42 states had policies to limit Medicaid payments of Medicare cost sharing when Medicaid's fee schedule was lower than Medicare's-an increase from 36 such states in 2004. In the preponderance of states with these policies, combined Medicare and Medicaid payments for evaluation and management services provided to duals averaged 78 percent of the Medicare allowed amount for these services, reflecting relatively low Medicaid fee schedules in these states. In 2013 and 2014, physicians who qualified for the Affordable Care Act's Medicaid "fee bump" were paid 100 percent of the Medicare allowed amount for these services.

Conclusions: Medicaid programs vary across states and over time in their payments of cost sharing for physician office services provided to duals. Our database and index can facilitate monitoring of these policies and research on the consequences of policy changes for duals.

Keywords: dual eligibles; state Medicaid policies.

FIGURE 1

Illustration of Medicare and Medicaid payments to physicians under different state Medicaid payment policies [Color figure can be viewed at wileyonlinelibrary.com] Note: The Medicare Part B deductible is $198 in 2020. After a beneficiary reaches the deductible, Medicare pays 80% of allowed Part B charges for the remainder of the benefit period, termed the “coinsurance phase.” Source: Authors’ illustration of Medicare and Medicaid payments to physicians under different state Medicaid payment policies assuming a hypothetical physician office service with a Medicare allowed amount (ie, price) of $100.

FIGURE 2

State Medicaid policies for paying Part B cost sharing amounts for physician office visits in 2004 and 2018 [Color figure can be viewed at wileyonlinelibrary.com] Source: Authors’ analyses of state Medicaid payment policies. See the notes to Table 1 for a description of other payment policies utilized in specific states. In 2004, we were unable to determine Medicaid payment policies in South Dakota and New Hampshire. The net impact of these policy changes on Medicaid payments to physicians depends on Medicaid's fee schedule for relative to Medicare's. These net impacts are summarized in our payment index for duals, results of which are reported in Table 1.