Updated Medicaid-To-Medicare Fee Index: Medicaid Physician Fees Still Lag Behind Medicare Physician Fees.

Abstract

Medicaid plays a critical role in the US health insurance system, but a history of low physician fees has limited physicians' participation in the program. Recent Centers for Medicare and Medicaid Services rules have sought to encourage states to increase their Medicaid physician fees to at least 80 percent of Medicare fees, based on the methods used in the Urban Institute's periodic surveys of Medicaid physician fees. In this article, we show that between 2019 and 2024, Medicaid fees increased slightly, from 72 percent of Medicare fees to 75 percent of Medicare fees for a basket of twenty-seven common physician services. In addition, because the current Medicaid population includes far more nonelderly, nondisabled adults than when the original basket of services was chosen, we present an updated index that better reflects current patterns of spending and service use. We found that, based on this updated index, Medicaid physician fees were approximately 71 percent of Medicare physician fees in 2024, including 69 percent for office visits, 68 percent for hospital and emergency department visits, 87 percent for obstetric care, and 79 percent for other services under our updated approach.