Access to Office-Based Physicians Under Capitation Reimbursement and Medicaid Case Management

This study reports the effects of a voluntary Medicaid case-management demonstration on the primary care provided to young children by office-based physicians. The MDs who participated were reimbursed at rates higher than the regular Medicaid fee schedule, either through augmented fees for specific services or through monthly capitation payments. Using the Medicaid Management Information System (MMIS) claims data, we compared the rates at which children in the experimental program and children in the regular Medicaid program were seen by a physician during a one-year period. The majority of experimental children received regular and frequent care from primary care physicians during the demonstration. After controlling for race and prior utilization differences, we found that augmented fee-for-service children received more primary care from office-based physicians than children in the regular Medicaid program. Capitation children received at least the same amount of primary care as children in the regular Medicaid program. We interpret our data to mean that capitation payment, untied to the delivery of services, does not necessarily reduce access to primary care and that higher fees for physicians who treat children may, in fact, increase access.