Supreme Court considers Medicaid payment rate adequacy
Just weeks after Medicaid payment rates dropped for many primary care physicians, the Supreme Court of the United States is looking at this important aspect of ensuring vulnerable patients have access to care before their health deteriorates.
The nation’s high court will hear oral arguments Jan. 20 in Armstrong v. Exceptional Child Center, weighing in on whether states must comply with the federal Medicaid Act’s “equal access” provision that is intended to make sure physicians and other health care providers receive sufficient payment to provide care to low-income and disabled patients.
The Medicaid Act specifically requires states accepting federal funding for Medicaid to set payment rates that are “sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.”
But as the AMA and six other medical and dental associations pointed out in a friend-of-the-court brief (log in) filed Dec. 23., “because States often cut rates for purely budgetary reasons, they often do so without even considering the impact they will have on access to care.”
In many states, Medicaid rates don’t cover the average practice costs, so physicians are left to “pay out of pocket to treat Medicaid patients,” the brief notes. Without the two-year bump in payment rates mandated by the Affordable Care Act, the average Medicaid payment was just 66 percent of the Medicare rates, according to the Kaiser Family Foundation Medicaid-to-Medicare fee index. Inadequate payments prevent physicians from taking on greater numbers of Medicaid patients.
The Government Accountability Office found in 2011 that about 80 percent of physicians accepted privately insured children as new patients, while less than 50 percent accepted children enrolled in Medicaid and the Children's Health Insurance Program. These numbers were only slightly better when looking at primary care in 2012 and 2013—84.7 percent for privately insured patients and 57.9 percent for Medicaid patients—as reported in a JAMA Internal Medicine study published in June.
“The nation’s most vulnerable patients deserve the same access to high-quality medical care as patients with private insurance,” AMA President Robert M. Wah, MD, said in a news release. “The sad fact is that Medicaid’s guarantee of equal access has become an illusion in many states that have cut Medicaid funding and driven physicians and other health professionals from the program.”
In a 2005 case that the Litigation Center of the AMA and State Medical Societies supported, Oklahoma Chapter of the American Academy of Pediatrics v. Fogarty, the court found that Medicaid rates in Oklahoma so restricted access to care that many children could not get the medical care they needed and were placed at risk of harm and death. In the early 2000s, Oklahoma’s Medicaid program served the smallest percentage of low income children in the country.
From 1995 to 2003, Medicaid rates in that state never exceeded 72 percent of Medicare, while private insurance paid at 130-180 percent of Medicare. As a result of the court ruling, the state increased Medicaid rates to 100 percent of Medicare, which resulted in more children receiving needed medical and dental care.
In addition to its role in the current Supreme Court case, the AMA continues to urge the federal government to extend the Medicaid payment increase that had been in effect during 2013 and 2014.
Read more about this case and related cases in which the AMA Litigation Center has been involved.