Physicians may choose not to accept Medicaid patients due to lower reimbursement rates compared to Medicare or commercial insurance. However, a significant factor often overlooked is the high rate of reimbursement denials by Medicaid. A study by Dunn et al. (2024) titled “A Denial a Day Keeps the Doctor Away” reveals that Medicaid denial rates are significantly higher than those for Medicare or commercial insurance.
Research shows that physicians bear the brunt of administrative complexities in healthcare billing, leading to economic costs and consequences for both doctors and patients. The study estimates that physicians lose 18% of revenue due to billing issues with Medicaid, compared to 4.7% for Medicare and 2.4% for commercial insurers. These billing challenges influence physicians’ decisions to decline Medicaid patients, impacting access to healthcare. The study suggests that reducing administrative frictions could lead to substantial economic gains and improved access to care.
The right column shows the mean CIP as a share of visit value by state and payer.“
For more insight on this issue, Economist Writing Every Day provides a detailed analysis.
