Commonwealth Fund: Medicaid Reimbursement Rates Are a Racial Justice Issue

A recent Commonwealth Fund blog, Medicaid Reimbursement Rates Are a Racial Justice Issue, explores Medicaid reimbursement rates in the country, and ties the low rates to more limited access to care and worse outcomes for Medicaid beneficiaries, who are disproportionately people of color.

The blog notes the following points for policymakers to consider:

• 2020 hospitals received only 88 cents for every dollar spent caring for Medicaid patients. This amounted to a $24.8 billion underpayment.
• Research suggests that increasing Medicaid primary care rates by $45 per service would reduce access-to-care inequities by at least 70 percent.
• Eight of the 10 most populous U.S. states are ranked in the bottom half of reimbursement rates nationally. Many of these states have considerably higher nonwhite populations enrolled in Medicaid and relatively lower reimbursement rates.
• In contrast, many of the states with the highest reimbursement rates have proportionally fewer residents of color (Vermont, Wyoming, Iowa, Idaho, Nebraska).

The Center for Medicare Advocacy recognizes the serious equity concerns raised by the blog. It is important that policies aimed at addressing these inequities reach the intended populations. For example, we support direct care ratios and other efforts to ensure that Medicaid payments to nursing homes are used to provide care for residents and not diverted to profits, management fees, and inflated related party transactions that do not lead to improved care for beneficiaries.  Transparency and accountability for nursing home reimbursement, both Medicaid and Medicare, are key components of President Biden’s nursing home reform agenda.