Medicaid’s importance as a health payer can’t be overstated. Last year, more than 77 million adults and children were enrolled in Medicaid and CHIP. Primary care physicians cared for a disproportionately high share of the care those patients received.
According to research published in 2022, among primary care physicians who treated at least one Medicaid beneficiary in the surveyed year, 25% of physicians accounted for 86.2% of claims, with 29.9% of core primary care physicians (those who treated at least 150 Medicaid patients) responsible for 88.1% of outpatient care.
Physicians cite low reimbursement rates as a reason they are unable to accept more Medicaid patients, particularly in underserved or rural areas. The AAFP believes that this wide gap in payment is eroding the nation's health care infrastructure.
The factors undermining Medicaid payment for primary care services include:
The majority of Medicaid payers use Medicare's values to set their own rates, which is part of the reason the Academy advocates for CMS to overhaul Medicare physician payment.
The 2025 budget reconciliation bill, H.R. 1, dramatically reduced states' Medicaid funding and coverage. Most of these cuts are not yet in effect, but some states have already started cutting Medicaid spending, potentially exacerbating issues with patient access and primary care reimbursement.
The Academy advocates for policies that would make Medicaid payment for primary care services at least equal to Medicare's payment rate for those services. The AAFP has strongly supported proposals to increase the transparency of Medicaid FFS rates for physician services and require comparative payment rate analysis and disclosure by states.
Such policy improvements would ensure that clinicians have the resources they need to care for Medicaid patients and would help alleviate barriers to care for the enrollees most in need.
More on Medicaid payment for primary care
Read more about Medicaid payment, as well as increasing access and health equity in this exclusive member resource.