Like most things Medicaid, reimbursement rates vary from state to state. This is because, according to the official Medicaid website, “states can establish their own Medicaid provider payment rates within federal requirements.” However, despite having the freedom to determine their own reimbursement rates, a large majority of states consistently set low Medicaid reimbursement rates.
Remember how a large majority of medical practices reported that Medicare didn’t cover the cost of care in 2019? Well, Medicaid providers are braving even worse financial straits. According to a nationwide study conducted by the Urban Institute in 2016, “Medicaid programs paid physicians fees at 72 percent of Medicare rates.” Additionally, Medicaid providers can’t seek additional compensation from patients, as they are typically barred from accepting out-of-pocket payments. These unavoidable rock-bottom rates discourage providers from participating in the Medicaid program, arguably undermining it completely.