Medicaid physician fees rose 15.1 percent between 2003 and 2008, representing an average annual growth rate of 2.6 percent, according to a study by researchers from the Urban Institute published on the Health Affairs web site. Over the same period, the Consumer Price Index (CPI) increased 20.3 percent (3.4 percent annually) and the medical care services component of the CPI--which includes physician services--increased 28.1 percent (4.6 percent annually). Among all categories of Medicaid physician fees, only fees for primary care services kept pace with inflation.
The gap between Medicare and Medicaid physician fees closed slightly between 2003 and 2008, as Medicare physician fees fell even more in real-dollar terms than did Medicaid fees. In 2008, Medicaid physician fees were 72 percent of Medicare fees, up from 69 percent in 2003. The ratio of Medicare physician payments to payments from private health plans has remained fairly stable since 2003, which suggests that Medicaid physician fees may have also increased relative to physician fees from private payers.
The increase in Medicaid fees relative to Medicare fees resulted from changes in reimbursement for primary care and obstetrics. Medicaid payments to physicians for primary care services increased from 62 percent of Medicare fees in 2003 to 66 percent of Medicare fees in 2008, while Medicaid fees for obstetrical services increased from 84 percent of Medicare fees in 2003 to 93 percent of Medicare fees. Medicaid physician fees for all other types of physician services remained at about 73 percent of Medicare levels over the 2003-2008 period.
