Are Surgeons Being Paid Fairly by Medicaid? A National Comparison of Typical Payments for General Surgeons.

Background: Both the Medicare (MCR) and Medicaid (MCD) programs turn 50 this year. Medicare has developed a national resource-based payment methodology for physicians' services, with broad input by specialty societies, and MCD payments are set by individual states by various means.

Study Design: We have conducted the first national comparison of payment methodology of MCD vs MCR for procedures commonly delivered by general surgeons. Using the most recent Centers for Medicare and Medicaid Services' Medicare data for frequency of allowed charges for general surgeons, we selected the most frequently billed procedures and gathered data from the 50 states for MCD and MCR payments. We determined the "Medicaid discount" (MCD payment minus MCR payment) expressed as dollars and percent, as well as dollars paid per relative value of work.

Results: We have discovered wide variations in MCD payments among states for the same procedures, demonstrating unexplained "discounts" of MCD payments in relationship to MCR. We found that MCD payments show wide variations across the states, with many states paying far less than MCR for common, essential procedures.

Conclusions: These findings call into question the fairness of MCD reimbursement for general surgery services in the United States. This discount to MCR could act as a disincentive for surgeons to care for some patients, based on the state of residence. These unexplained discounts could have considerable long-term effects for patients dependent on the MCD program. Our study should act as a stimulus for states to examine their payment methodologies to provide more uniform and fairer payments for surgical procedures.