Employer-sponsored insurance paid Virginia doctors an average of 28 percent more than Medicaid managed care plans for the same routine preventive visit, according to a study published this week in JAMA Health Forum that held the billing code constant across five types of coverage.
That design is what makes the comparison unusual. Most published work on Medicaid payment has examined traditional fee-for-service programs, even though about 85 percent of Medicaid members nationwide are enrolled in managed care plans run by private insurers under state contracts. Until now, the rates those plans actually pay have been difficult to observe.
For a family on Medicaid, the finding does not change what a visit costs at the front desk. It bears on something less visible and often more frustrating, which is how many practices in a given area accept the coverage at all.
The Numbers and How They Were Measured
Alison Cuellar, a professor of health administration at George Mason University, led the analysis using Virginia claims data from 2023 combined with federal Transparency in Coverage data, which insurers must now publish. The team compared Medicaid fee-for-service, Medicaid managed care, employer-sponsored insurance, marketplace plans, and Medicare Advantage using the same Current Procedural Terminology codes.
Cuellar told WTOP News that the commercial employer-sponsored average rate was 28 percent higher than the Medicaid managed care rate for the same service, and 35 percent higher than Medicaid's fee-for-service rate.
A summary of the findings reports the comparison from the other direction as well. Medicaid managed care plans paid 25 percent less than Medicare plans and more than 40 percent less than marketplace plans, even though they generally paid more than Virginia's traditional Medicaid program.
The absolute figures are modest. For a routine preventive visit for an established patient aged 40 to 64, Medicaid managed care plans paid a median of $96.22, against Virginia's traditional Medicaid rate of $90.86. The researchers found similar patterns for the other preventive visits studied.
A note on how the gap is expressed. Saying employer coverage paid 28 percent more is not the same as saying Medicaid paid 28 percent less. Those describe the same gap from opposite baselines, and the second framing overstates it.
Payment Rates Reach Patients as Wait Times
The mechanism runs through physician participation rather than through a bill. "Lower payment rates can make doctors less likely to participate in Medicaid," Cuellar said, which in turn can make it harder for patients to find care.
A practice deciding how many Medicaid patients to accept weighs the payment against the same overhead it pays for every patient. When the same visit generates less revenue meaningfully, some practices cap their Medicaid panel, close it, or decline new patients on that coverage. The patient does not receive a denial. They receive a longer wait for an appointment, a narrower list of practices taking new patients, or a drive to a different part of the metro area.
That falls hardest on people with the least capacity to absorb it. A parent working an hourly job who must take an afternoon off to reach a practice two counties away faces a real cost that does not appear in any claims database.
The study also found that Virginia's state-set traditional Medicaid rates appear to anchor what managed care plans pay. That is a policy-relevant finding, because it suggests state rate decisions influence payments across the whole program rather than only the shrinking fee-for-service portion.
The Limits of a Single State Snapshot
Several limits belong up front rather than at the end. This is a cross-sectional analysis of one state in one year. Virginia's rates are not necessarily representative of California's, Texas's, or New York's, and the study does not claim they are.
It examined preventive visits specifically. Payment gaps for specialty care, mental health services, obstetric care, or procedures may be larger or smaller, and this analysis does not measure them.
It also measured payment, not access. The study did not count how many Virginia practices accept Medicaid, measure appointment wait times, or track whether patients got the preventive care they needed. The connection between low rates and reduced participation is well documented in prior research, but this study did not test it directly.
The research was supported by the Robert Wood Johnson Foundation's Health Data for Action program, according to the study announcement. Cuellar conducted the work with Meredith Young of the Virginia Center for Health Innovation and Jennifer Mellor of William and Mary.
Practical Steps for People on Medicaid Coverage
Nobody should read this as a reason to skip a preventive visit. Virginia's Medicaid agency states that adult members have no copay obligation for covered preventive services, whether they are in fee-for-service or a managed care plan. The payment gap described here is between the plan and the practice, not between the plan and the patient.
Someone struggling to find a participating physician has several concrete options. Every Medicaid managed care plan maintains a member services line and a provider directory, and plans are required to help members obtain covered care when the network cannot provide it. Federally qualified health centers accept Medicaid by design and are reimbursed under a separate formula, which makes them a reliable option in areas where private practices have closed their panels.
State Medicaid agencies also operate member ombudsman or enrollment broker lines that can help when a plan's network appears inadequate. Documenting the attempts strengthens a request for help or an out-of-network exception.
The most likely next development is legislative rather than clinical. State budget cycles set Medicaid rates, and the study's authors framed their work as giving states a clearer benchmark. Whether Virginia or any other state adjusts rates in response is unknown.
The newest confirmed fact is a measured 28 percent gap between employer coverage and Medicaid managed care for identical preventive visits in Virginia. The people most affected are Medicaid enrollees in areas where practices have limited participation. The reasonable action is using plan member services and community health centers when a practice will not take the coverage. The central uncertainty is whether this pattern holds in other states and for other kinds of care.
Key Questions Answered
What did the study measure? It compared what five types of insurance paid Virginia doctors for the same routine preventive visits, using state claims data and federal Transparency in Coverage data.
How large was the gap? The lead author said employer-sponsored insurance paid 28 percent more than Medicaid managed care and 35 percent more than Medicaid fee-for-service for the same service. Medicaid managed care paid 25 percent less than Medicare plans and more than 40 percent less than marketplace plans.
What were the actual dollar amounts? For a routine preventive visit for an established patient aged 40 to 64, Medicaid managed care plans paid a median of $96.22 and Virginia's traditional Medicaid program paid $90.86.
Does this change what patients pay? No. The gap is between insurance plans and physician practices. Virginia Medicaid members have no copay obligation for covered preventive services.
Why should patients care about payment rates? Lower rates can make practices less willing to accept Medicaid, which shows up for patients as longer waits, fewer practices taking new patients, and longer travel.
Does this apply outside Virginia? The study examined one state in one year and does not claim national representativeness. About 85 percent of Medicaid members nationwide are in managed care, so the question it raises is broadly relevant even though the numbers are Virginia-specific.
Where can someone go if practices will not accept their coverage? Call the plan's member services line for help finding an in-network provider, try a federally qualified health center, and contact the state Medicaid member ombudsman or enrollment broker if the network appears inadequate.
