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Does Raising Rates Increase Dentists’ Participation in Medicaid?
The Experience of Three States
By Renalyn Cuadro and Anna Scanlon
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Executive Summary
Although dental benefits are available for children enrolled in Medicaid, few receive them. State Medicaid programs are plagued by low rates of participation among dentists, so enrollment in Medicaid does not ensure access to services. Indeed, states report that fewer than half of states’ dentists saw at least one Medicaid patient in a one-year period. Furthermore, most states report that fewer than 25 percent of the states’ dentists have seen at least 100 Medicaid patients in a one-year period.
The problem of low dentist participation in Medicaid programs is compounded by the overall shortage of dentists. Since the early 1990s, a steady decline has occurred in the proportion of dentists to the general population. The current dental work force is aging as fewer dentists enter practice. Dentists are retiring faster than new ones are entering practice: the average annual rate of growth of retirees is predicted to be 2.1 percent while the corresponding estimate of dentists entering practice is about 1 percent. Some states report both an overall shortage of dentists and a geographic maldistribution, making it difficult to find dentists who will treat Medicaid patients. Consequently, most dentists are busy with insured and self-pay patients, so it is difficult for Medicaid recipients to set appointments.
Dentist Participation. The shortage of dentists, however, is not the only reason low-income patients have trouble finding providers. Many states have an adequate supply of dentists but an insufficient number who treat Medicaid eligibles. Although dentists do not participate in state Medicaid programs for many reasons, the primary reason is low Medicaid reimbursement rates. High dental practice overhead costs—facility, equipment, personnel and administrative—that comprise 65 percent to 70 percent of dentists’ earnings. The General Accounting Office (GAO) found that most state Medicaid programs reimburse significantly less than dentists’ normal fees. Typically, Medicaid reimbursement rates do not cover the actual cost of providing services, so dentists lose money on each patient served. The more Medicaid patients dentists treat, the more difficult it is to operate their practices.
A second reason for low dentist participation is the administrative complexity associated with being a Medicaid provider. Medicaid programs have administrative requirements that differ from those of commercial health insurers; these requirements demand additional time and attention from dentists and their staffs. The requirements include state-specific claim forms, prior authorization requirements and cumbersome eligibility verification. Dentists are frustrated by the complex Medicaid claims process, arbitrary denials, slow payment, and prior authorization requirements for routine services.
Problem of Access. Patient issues or conflicts in cultural behavior and expectations between dental providers and Medicaid patients also serve as a barrier to dental care. Dentists believe that Medicaid patients may be less informed about the importance of preventive dental care and proper hygiene and that, overall, oral health may be a low priority. Dentists find that Medicaid families are more likely than others to break appointments or not to keep appointments at all. Because fixed costs represent a significant portion of dentists’ fees, missed appointments are expensive for dentists; this contributes to their unwillingness to serve as Medicaid providers. In California, nonparticipating dentists reported that broken appointments were the second most important problem (after low payment) with the state Medicaid program and were a factor in their decision about whether to accept Medicaid patients. In Texas, 83 percent of surveyed dentists who participate in Medicaid stated they would see more Medicaid patients if this group had fewer broken and canceled appointments.
All these factors combined—low reimbursement rates, the complicated nature of being a Medicaid provider and client behavior—have resulted in low dentist participation in state Medicaid programs and have compromised beneficiary access to dental services.
State Actions States have engaged in a variety of efforts to increase provider participation and use of dental services, concentrating primarily on reimbursement rates and administrative aspects. A survey conducted by the National Conference of State Legislatures (NCSL) in 2000 found that 23 states had increased Medicaid reimbursement rates for dental services. Five states—Alabama, Delaware, Georgia, Michigan and South Carolina—have increased their Medicaid dental reimbursement rates to a level that 70 percent to 85 percent of dentists consider to be the same as their usual fees. This report looks at the experience of three states—Alabama, Ohio and Michigan—that saw increased dentist participation and access to care when they coupled significantly increased reimbursement rates with outreach and administrative simplification.
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In 2000, Alabama increased Medicaid dental reimbursement rates to 100 percent of usual, customary and reasonable (UCR) fees, simplified prior authorization requirements and increased provider and patient outreach. As a result of these efforts, provider participation increased from 23.6 percent of dentists in 1999 to 30.6 percent in 2002; and the proportion of participating dentists who were serving a significant number of Medicaid-eligibles increased by 39 percent. In addition, the number of Medicaid-insured children using dental services increased by 58 percent.
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Also in 2000, Ohio increased dental reimbursement rates to 75 percent of UCR fees in the state and increased provider outreach. After implementation of these efforts, provider participation went from 30 percent in 1999 to 32 percent in 2000, but the proportion of participating dentists who were serving a significant number of Medicaid-eligibles remained constant. With the increase in participation, the number of Medicaid-insured children using dental services increased by 11 percent.
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Michigan enrolled Medicaid-eligible children in a private insurance plan that offered reimbursement rates identical to commercial rates. After only one year, the number of children who were receiving treatment in the program increased by 35.2 percent.
States can do a number of things to make Medicaid participation more attractive for dentists. However, these efforts are not likely to increase provider participation without adequate reimbursement rates. The experiences of Alabama, Ohio and Michigan demonstrate that, when states couple their efforts with an increase in dental reimbursement rates, dentists respond and patient access is improved.
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