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Psychiatrist Reimbursement Lower With Medicaid Than Medicare

State-to-national Medicaid indices for psychiatrists’ mental health services varied from 0.46 to 2.34 in Pennsylvania and Nebraska, respectively

By Elana Gotkine HealthDay Reporter

TUESDAY, April 4, 2023 (HealthDay News) — Medicaid reimbursement for psychiatrists providing mental health services is lower than that of Medicare, according to a study published in the April issue of Health Affairs.

Jane M. Zhu, M.D., M.P.P., from Oregon Health & Science University in Portland, and colleagues examined the extent to which Medicaid reimbursement for mental health services varies across states. Publicly available Medicaid fee-for-service schedules from state Medicaid agency websites in 2022 were used to construct two indices for a common set of mental health services: a Medicaid-to-Medicare index to benchmark Medicaid reimbursement with that of Medicare for the same set of services for each state, and a state-to-national Medicaid index comparing Medicaid reimbursement for each state with an enrollment-weighted national average.

The researchers found that Medicaid paid psychiatrists at 81.0 percent of the Medicaid rates, on average, and most states had a Medicaid-to-Medicare index below 1 (median, 0.76). For psychiatrists’ mental health services, the state-to-national Medicaid indices varied from 0.46 to 2.34 in Pennsylvania and Nebraska, respectively, but were not associated with the supply of Medicaid-participating psychiatrists.

“We know there are significant barriers in accessing mental health care,” Zhu said in a statement. “States that are chronically underfunding or underpaying their psychiatrists should take note of where they stand. For those states, raising the reimbursement rate may be one tool to increase recruitment and retention of mental health professionals.”

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