Prepayment with office-based physicians in publicly funded programs: results from the Children's Medicaid Program.

This paper is a report of the results of a demonstration designed to provide empirical evidence regarding the effects of alternative approaches to paying physicians for serving children in the Medicaid program: (1) visit fees set at twice regular Medicaid fees in return for physician agreement to manage utilization and (2) capitation and financial risk-sharing along with the same physician agreement to manage utilization. Participating physicians were assigned randomly to either of the two payment groups. Comparisons of utilization and expenditures were made between these two plans and the regular Medicaid program (fee-for-service, low fees). Results showed no adverse effect of capitation payments on primary care visits to office-based physicians. Capitation physician referrals to specialists decreased relative to all other groups studied, consistent with the theory that the financial incentives in capitation will lead primary care physicians to reduce referrals to specialists.

Access to office-based physicians under capitation reimbursement and Medicaid case management. Findings from the Children's Medicaid Program.

This study reports the effects of a voluntary Medicaid case-management demonstration on the primary care provided to young children by office-based physicians. The MDs who participated were reimbursed at rates higher than the regular Medicaid fee schedule, either through augmented fees for specific services or through monthly capitation payments. Using the Medicaid Management Information System (MMIS) claims data, we compared the rates at which children in the experimental program and children in the regular Medicaid program were seen by a physician during a one-year period. The majority of experimental children received regular and frequent care from primary care physicians during the demonstration. After controlling for race and prior utilization differences, we found that augmented fee-for-service children received more primary care from office-based physicians than children in the regular Medicaid program. Capitation children received at least the same amount of primary care as children in the regular Medicaid program. We interpret our data to mean that capitation payment, untied to the delivery of services, does not necessarily reduce access to primary care and that higher fees for physicians who treat children may, in fact, increase access.