Recent Trends in Medicaid Physician Fees, 1993-1998

This study uses data on Medicaid physician fees in 1993 and 1998 to document variation in Medicaid fees across the country, describe changes in Medicaid fees, and contrast how Medicaid physician fees have changed relative to those in Medicare between 1993 and 1998. The results show that 1998 Medicaid fees vary widely, as has been documented in earlier studies, but that states with low average fees may pay more generously for selected services (e.g., obstetrics and preventive services). The growth in Medicaid fees between 1993 and 1998 was 4.6 percent nationwide, lagging behind the general rate of inflation. Medicaid fee growth was greater for primary care services than for other services studied. Relative to Medicare physician fees, Medicaid fees fell by 14.3 percent between 1983 and 1988. Medicaid’s low fees and slow growth rates suggest that potential access problems among Medicaid enrollees remain a policy issue that should be monitored.