Some Medicaid Plans May Overstate Provider Network Adequacy

Posted by Joe Stefansky on October 28, 2022 in Medicaid,

Medicaid patient access to care has been a challenge for years. Many providers have historically opted to not participate in Medicaid because of the low reimbursement rates and the increased administrative requirements that Medicaid plans entail.

A recent study found that provider acceptance of Medicaid patients is lower than for Medicare or commercial plan members. In 2019, a CMS MACPAC study reviewed physician acceptance of new Medicaid patients and found a striking disparity. The study made the following findings:

  • Providers less likely to accept new patients insured by Medicaid (70.8%) than those with Medicare (85.3%) or private insurance (90%)
  • Physicians in general/family practice were markedly less likely to accept new Medicaid patients (68.2%) than Medicare (89.8%) or private insurance (91%)
  • Psychiatrists also accepted new Medicaid patients at a much lower rate (35.7%) than Medicare (62.1%) or private insurance (62.2%)
  • Pediatricians accepted new Medicaid patients at a lower rate (78%) than privately insured patients (91.3%)

To address provider access concerns, Medicaid state programs include specific access standards in their Medicaid plan agreements with contracting insurers. Under federal regulations, states are required to demonstrate the adequacy of their managed care networks, but they have latitude on how to meet this expectation. State to state, requirements vary widely in their network adequacy standards, oversight of those standards, and penalties for misrepresenting the size and breadth of provider networks. Many states have network adequacy standards that set minimum provider-to-enrollee ratios for each managed care plan and others also require adequacy based on distances that beneficiaries must travel to the closest primary care provider. This is further complicated by differing distances set for rural versus urban settings.In some very underserved rural areas where there are few providers, some states (such as Utah) may even seek a waiver to allow the use of providers technically excluded by the OIG.

Notwithstanding states’ efforts to require access to care for its Medicaid populations, a recent study indicates that some health plans offering managed care services to Medicaid enrollees may be finding ways to meet network adequacy standards that do not reflect true patient access opportunities. The  Health Affairs study published in the May 2022 issue found that 17% of primary care practices receive no Medicaid revenue. The study almost 16% of adult primary care physicians within Medicaid managed care networks did not file any Medicaid claims in a year, which raised concerns that private insurers may be “padding” the Medicaid managed care networks with physicians irrespective of their willingness to treat Medicaid beneficiaries.

Below is a brief overview of the study and findings.

The study was limited to Medicaid managed care plans in four states: Kansas, Louisiana, Michigan and Tennessee for the years of 2015-2017. The primary data sources were medical claims, state Medicaid enrollment files and plan provider directories. Analysis was limited to four types of providers (primary care physicians, pediatricians, cardiologists and psychiatrists) because of their importance to both care access and specialty services that are frequently underserved for Medicaid populations.

The primary goal was to measure of physicians’ participation in managed care networks and the number of individual Medicaid beneficiaries treated by a physician per year. The study defined four categories of physician participation:

  • “Ghost” physicians treated 0 Medicaid beneficiaries
  • “Peripheral” physicians treated 1–10 beneficiaries
  • “Standard” physicians treated 11–150 beneficiaries, and
  • “Core” physicians treated more than 150 beneficiaries

Medicaid participation rates using these categories were as follows: 16.3% of physicians listed in the Medicaid managed care plan provider network directories qualified as ghost physicians, meaning they saw zero Medicaid beneficiaries.  Approximately 17% of physicians were classified as peripheral physicians, 43% were classified as standard physicians, and 23.7%   were classified as core physicians.

The distribution of care was also examined in the study. Among primary care physicians (both pediatric and adult) who treated at least one Medicaid beneficiary per year, 25% of physicians accounted for 86.2% of claims. Among specialist physicians who treated at least one Medicaid beneficiary per year, 25%of cardiologists accounted for 69.2% of claims, and 25% of psychiatrists accounted for 86.5% of claims. Core physicians accounted for an even higher percentage of care.

Exclusion of the ghost and peripheral providers from the insurers’ providers directories significantly changed the apparent access to care. The provider directory data reviewed showed on average that there was one primary care physician for every 440 Medicaid beneficiaries, one cardiologist for every 4,543 Medicaid beneficiaries, and one psychiatrist for every 5,382 Medicaid beneficiaries in the four states.  When ghost and peripheral physicians were excluded, the average ratios rose to one primary care physician for every 654 beneficiaries, one cardiologist for every 4,777 beneficiaries, and one psychiatrist for every 8,834 beneficiaries.

In summary, the study found that more than a third of the physicians listed in Medicaid plan provider network directories treated ten or fewer Medicaid beneficiaries in a year, with little variation across states. The study also found that there was a concentrated small core of contracted physicians who saw Medicaid beneficiaries. The findings suggested that provider network directories may overstate the availability of physicians in the Medicaid program and that relying on the provider directories to ensure network adequacy may be insufficient.


The study recommended that states invest in increased audit resources to evaluation managed care networks, as well as enhanced claims analytics to determine actual provider participation in treating Medicaid patients to identify and address ghost and ancillary provider situations.

The increased scrutiny of managed care plans and the reliability of their data appears to also be on the CMS radar.  In August of 2022, CMS issued a Request for Information (RFI) asking Medicare Advantage plans how they can make the program more equitable, accessible, innovative, affordable, and collaborative. Specific and detailed requests throughout the RFI focus on what plans and CMS can do to better leverage data for better outcomes. In this new RFI, CMS specifically sought access to the plans’ algorithms related to predicting utilization and costs, how in-need members are identified, as well as algorithm testing and bias related to differential outcomes in patient care. This RFI presages the direction of CMS in testing the quality and effectiveness of health care services provided to Medicare enrollees by contracted managed care by better understanding the analytics used by plans. By understanding the algorithms used in by health plans to manage their Medicare plans, CMS may gain greater insight into the care provided.

About Joe Stefansky

About Joe Stefansky

Joe Stefansky has a keen sense of business opportunities in complex problems, using technology to transform difficulty into efficiency. The CEO and founder of Streamline Verify specializes in solving compliance, legal and administrative issues through intuitively designed software that reduces costs and saves time.

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