Payment Generosity and Physician Acceptance of Medicare and Medicaid Patients

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International Journal of Health Care Finance and Economics




Using 2008 physician survey data, we estimate the relationship between the generosity of fees paid to primary care physicians under Medicaid and Medicare and his/her willingness to accept new patients covered by Medicaid, Medicare, or both programs (i.e., dually enrolled patients). Findings reveal physicians are highly responsive to fee generosity under both programs. Also, their willingness to accept patients under either program is affected by the generosity of fees under the other program, i.e., there are significant spillover effects between Medicare and Medicare fee generosity. We also simulate how physicians in 2008 would have likely responded to Medicaid and Medicare payment reforms similar to those embodied in the 2010 Affordable Care Act, had they been permanently in place in 2008. Our findings suggest that “Medicaid Parity” for primary care physicians would have likely dramatically improved physician willingness to accept new Medicaid patients while only slightly reducing their willingness to accept new Medicare patients. Also, many more primary care physicians would have been willing to treat dually enrolled patients.