How States Fail Medicaid Patients

The doctor may, or may not, see you now.

Source: Getty Images

It's no secret that Medicaid struggles to attract as many doctors as other health-care plans do. Less clear is what makes that so hard. Everyone assumes it's all because of Medicaid's low payment rates. But a government watchdog suggests it may have more to do with the way states run the program.

Medicaid covered almost 70 million Americans at some point last year, and Obamacare will continue to swell the rolls, adding as many as 15 million people by 2020. It's important to make sure those people are able to get care. Yet more than one in 10 Medicaid beneficiaries have trouble finding a doctor, according to one study; they're also more likely to suffer delays in care than people with private health insurance.   

Low pay is at least part of the problem. Doctors got two-thirds as much for seeing a Medicaid patient in 2012 as for seeing somebody on Medicare, the program for older Americans. But a report this week, from the inspector general for the U.S. Department of Health and Human Services, points to another reason for Medicaid's doctor shortage: Insurance companies don't always live up to their commitments.

The report looked at 32 states that pay private insurance companies to run their programs, an arrangement called Medicaid managed care. Those insurers get a fee for each beneficiary; in return, they commit to offering networks of doctors that are big enough to serve the Medicaid population, without making beneficiaries wait too long or travel too far.

But that's not happening. The inspector general found that only half of the doctors listed as participating in Medicaid were actually taking appointments. The rest weren't accepting new patients, weren't participating or couldn't be located.

Part of the rationale for Medicaid managed care is that it prevents doctor shortages, by giving insurers the responsibility to ensure there's an adequate network -- and by giving states the power to penalize insurers if they don't. The inspector general's report rightly faults states for not using that power, and HHS for not exercising its authority to make sure they do.

It makes little sense for state Medicaid agencies to pay insurers for a network of health-care providers that exists only on paper. Medicaid's doctor shortage might be largely alleviated if federal and state governments would just insist on getting what they pay for.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.