GAO: State Medicaid payments vary for identical services

To help policymakers ensure the adequacy of Medicaid provider payments, the U.S. Government Accountability Office assessed Medicaid fee schedules against claims data and released the results Monday. The GAO study focused on how widely state Medicaid payments vary for the same services, and how closely Medicaid provider payment rates calculated from claims data match rates reported in states' Medicaid fee schedules.

The GAO pulled 2010 claims data on 35 services including evaluation and management, imaging, pathology and maternity care. The agency analyzed patterns from nine states representing different regions serving a large percentage of beneficiaries through fee-for-service arrangements. Selected states included Alabama, Iowa, Illinois, Louisiana, Nebraska, Pennsylvania, South Carolina and Texas, according to an agency announcement.

Among states and services analyzed, the GAO's found a common thread: All states varied Medicaid payments for at least some services. However, states differed in the number of services for which they varied payments as a result of provider type, service site and/or beneficiary age. Some states also varied payments based on provider specialty or geographic region. 

Further, the GAO found most median Medicaid payment rates derived from claims data matched rates published in prior studies even though some published fee schedule rates were rarely used in clinical practice.

Overall, the study concluded "Medicaid FFS claims data is a valid source of information on Medicare provider payments, which have the potential to provide a more complete representation of provider payments than do fee schedules, as claims data can capture both the distribution and frequency of actual payments to providers."

Interstate payment consistency and reimbursement alignment with fee schedules are only two pieces of a complex Medicaid payment equitability puzzle. For example, hospitals nationwide have been burdened by prolonged Medicaid payment delays, as FierceHealthcare reported. And hospitals in states forgoing Medicaid expansion could face unintended cuts to disproportionate share hospital payments along with higher uncompensated care costs.

For more:
- read the GAO announcement and full report (.pdf)

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