States with higher Medicaid reimbursement rates for psychiatrists had 24% lower overall healthcare costs and 19% lower psychiatric-specific costs among Medicaid patients with serious mental illness, according to a study published in The American Journal of Managed Care.
The study was published June 12 and spearheaded by researchers from City University of New York in New York City and Bogazici University in Turkey. They conducted a retrospective cohort study using 2021-2023 Kythera Labs Medicaid data, which included 44,470,509 patients and 901,136,733 claims. They identified the 20 most frequently billed psychiatric procedures and compared states in the top 20% and bottom 20% of psychiatrist reimbursement rates.
The analysis included adults with at least one serious mental illness claim in 2022 and continuous Medicaid enrollment for one year before and after diagnosis. Researchers adjusted for patient demographics, comorbidities and multiple state-level policy factors.
Here are four things to know:
- Higher-paying states had lower utilization. After adjustment, patients in high-reimbursement states were 5% less likely to have psychiatric-specific inpatient visits, 4% less likely to have psychiatric-specific outpatient visits and 23% less likely to have psychiatric-specific emergency department visits.
- Overall costs were significantly lower. High-reimbursement states saw 24% lower total healthcare costs, 12% lower inpatient costs and 29% lower outpatient costs annually compared with low-reimbursement states.
- One of the largest differences was in emergency department use. Patients in high-reimbursement states were 23% less likely to have psychiatric-specific emergency department visits and 6% less likely to have all-cause emergency department visits.
- Researchers cautioned against inferring causation. The researchers said the findings may reflect factors such as improved provider participation and care continuity, but differences in Medicaid delivery systems and unmeasured confounding factors could also influence the results.
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