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State Medicaid Programs Throughout the Nation Are Extremely Deficient, Public Citizen Analysis Reveals

April 18, 2007

State Medicaid Programs Throughout the Nation Are Extremely Deficient, Public Citizen Analysis Reveals

New Report Ranks State Programs and Highlights Disparities in Services and Eligibility

WASHINGTON, D.C. – State Medicaid programs have severe deficiencies and suffer from a great disparity of coverage and eligibility from state to state, according to report released today by Public Citizen. The report concludes that the federal Medicaid program, which provides health care coverage to 55 million mostly low-income Americans, is failing to deliver adequate services to millions of people because of differing state eligibility requirements, benefits and performance.

The report, “Unsettling Scores,” ranks the state-operated Medicaid programs and points out where each state is performing well or lagging with respect to the rest of the nation and accepted benchmarks for care. The report is available here, as is an online database that allows users to compare states for each of the categories studied. The highest-ranking state earned only 64.6 percent of the maximum points, and 30 states – including a number of large states – ranked in the bottom 10 in at least one category.

“As it enters its fifth decade, the Medicaid program is going through a mid-life crisis. Federal standards are so inadequate that no state has a truly excellent Medicaid program,” said Dr. Sidney Wolfe, director of the Health Research Group at Public Citizen and co-author of the report. “Our scoring will give states a better idea of how they compare with others and in what areas they need to improve.”

The 10 most deficient state programs have overall scores between 317.8 and 379.1 of the possible total of 1,000 points. The worst, in order from 50 to 41, are: Mississippi, Idaho, Texas, Oklahoma, South Dakota, Indiana, South Carolina, Colorado, Alabama and Missouri.

Five of the top-ranking states are in the Northeast, with three in the Midwest and two in the Northwest. The top 10 states, from 1 to 10, are: Massachusetts, Nebraska, Vermont, Alaska, Wisconsin, Rhode Island, Minnesota, New York, Washington and New Hampshire.

Public Citizen ranked the states on the extent to which they surpass the already low federal mandates and divided the scores into four categories: eligibility, scope of services, quality of care and provider reimbursement. The organization, working with independent Medicaid experts in academia and the private sector, assigned numerical values to score the states’ performance in the categories and weights to yield their overall score. The report updates a previous analysis conducted by Public Citizen in 1987, and uses 2004 and 2005 Medicaid data compiled by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured, as well as independent data gathered by Public Citizen, to determine state-by-state rankings. This is the only study that has evaluated the overall performance of state Medicaid programs and ranked them accordingly.  

The states varied widely in how they determine eligibility. One of the questions posed by the study – “If I were a Medicaid enrollee, where would I be most likely to obtain the best and most comprehensive care?” – can be answered only in terms of the needs and characteristics of the enrollee. For example, a pregnant woman in a family of three must have an income lower than $22,128 a year to be covered in Wyoming, while her Minnesota counterpart would be covered with an income of up to $45,650. Standards of eligibility and service are not consistent or portable across state lines.

“Where you happen to live can make all the difference,” said report co-author Annette Ramirez de Arellano, a public health expert with the Health Research Group at Public Citizen. “Most people on Medicaid face hurdles to eligibility and an uneven patchwork of services because practically all states have deficiencies in one or more of these areas.”   

To be covered, individuals must meet financial requirements regarding income, assets and expenses, as well as categorical requirements regarding age, family circumstances, employment status, blindness, disability and other factors, all of which can vary from state to state.

States also have different priorities in deciding the scope of services they offer their Medicaid populations. Public Citizen ranked states by the optional health care services that states provide and did not give credit for providing legally mandated services. Even if a state offers a given service, it can limit the population to whom it is offered, as well as the frequency and the duration of coverage. For example, if a patient requires 25 sessions of physical therapy, but Medicaid covers only three, that patient is left without federal help in paying for the rest of his or her required services.

States earned the lowest scores in the category measuring quality of care, perhaps because they have not been required to measure quality in their Medicaid programs. Public Citizen compensated for this lack of information by looking at indicators that suggest quality care is being delivered to Medicaid patients, such as nursing home data about the number of nurses per resident on duty and childhood immunization rates for children.

“Medicaid desperately needs nationwide uniform standards of quality of care and an effective means of monitoring and upholding those standards,” said Ramirez de Arellano.

Finally, to determine the ranking for the provider reimbursement category, Public Citizen looked at the fees Medicaid pays compared to the fees paid by Medicare, as well as the amount the program spends per enrollee. States try to keep their Medicaid costs low by paying physicians the lowest possible fees, sometimes paying less than other health care assistance programs for the same services. For instance, Medicaid pays physicians on average only $69 for every $100 that Medicare pays for the same services. This causes some physicians to limit the number of Medicaid patients they will treat and in effect creates a doctor shortage for Medicaid patients in some areas.