New Jersey’s Medicaid program serves 2.1 million residents in our state, including half of all our children. Yet Medicaid recipients still struggle with access to care, including primary care. This lack of access can have dire consequences.
At an event held by first lady Tammy Murphy a few years ago, a young woman shared her experience of enrolling in Medicaid and having to switch from her familiar and trusted provider near her home because he did not accept Medicaid. She tragically lost her pregnancy because her new provider disregarded her health concerns.
Unlike commercial insurance and Medicare, too few physicians and other health care providers in New Jersey accept Medicaid. A main reason is reimbursement. For primary care, including general pediatrics, the state’s Medicaid program pays providers about half the rate that Medicare pays. The same is true for obstetrics. The policy of paying half the rate — for the same service — is inequitable and unacceptable.
It also contributes to racial disparities in health care access, quality, and outcomes. Medicaid serves a racially diverse population, with 66.6% of non-elderly Medicaid enrollees identifying as Black, Latino, Asian, or mixed race. Underpaying for health care that covers more racial minorities is not equitable — and leads to less access, fewer choices, less culturally aligned care, and lower quality. It drives people to the emergency department for primary care, the most expensive, and often the worst, place for primary care.
It would improve access
Establishing a foundation of primary care, with access for everyone in our state, is essential to creating a healthy population. During the height of the pandemic, we saw how valuable it was for patients to be able to connect with trusted health care providers to discuss possible COVID-19 symptoms and answer questions about vaccinations or other health issues.
Strengthening patient access and connection to high quality primary care was one of 24 recommendations in an action plan for emerging from COVID-19 released by the Quality Institute last year. Increasing Medicaid’s investment in primary care is one critical step we can take this year to make our state a healthy place for everyone. The evidence continues to show that health systems with a foundation of comprehensive primary care achieve better, more equitable health outcomes, and are less costly.
People insured by Medicaid live throughout our state. Yet the state’s Medicaid program does not invest in primary care at anywhere near the level that would encourage sufficient primary care participation in Medicaid to meet the statewide demand. The state already increased the rates for Federally Qualified Healthcare Centers to Medicare levels. Now the state must raise the rates for private primary care practices as well to encourage greater participation in the Medicaid program, especially in areas where other barriers such as transportation can impact access.
Right the wrongs
To right these wrongs, the Quality Institute is asking our state Legislature and governor to increase Medicaid primary care rates to 80% of Medicare, starting in fiscal year 2023. In fiscal year 2024, the rates should be raised to the Medicare level and indexed to Medicare increases going forward.
The increases would go to primary care, family medicine, general internal medicine, and general pediatric practices throughout the state. The payments, like all health care reimbursement, should be linked to uniform quality performance measures to encourage and reward quality improvement.
Based on prior state budget information, we estimate that this proposal would cost about $200 million, with a state cost of $90 million. If the state were to include a similar rate increase for obstetricians and midwives, the state cost would be an additional $40 million. These timely and fair adjustments would lead to improved access to high quality care, increased health equity, and improved population health — all having long-term benefits, including cost savings, to the state.
We need a permanent commitment to equitably fund primary care as the foundation of our Medicaid program. Otherwise, New Jersey will continue to perpetuate a structurally inequitable health care system where people enrolled in Medicaid, more of whom identify as minorities, have less access to high quality care.