One problem with low reimbursements

Medicaid -- the government's health plan for the indigent -- is known for its access issues: patients frequently cannot find physicians who are willing to accept Medicaid reimbursement. KFF Health News profiled a woman who experienced this effect firsthand. While regulations exist stipulating that patients are entitled to see a specialist within fifteen business days ("unless a longer waiting time would not harm the patient's health"), the profiled patient was unable to do so -- despite severe pain. The insurance company administering the patient's health plan appears to have simply decided that the patient's condition was not urgent and was reported to be unresponsive when pressed.

Without any real repercussions for failing to comply with regulations, it is not difficult to imagine some companies choosing the route that costs less. However, if the government were to impose consequences (e.g. fines), it is unclear what might happen. Some companies might comply, whereas some other companies might stop offering the service. After all, if complying with regulation would cause the health plans to be unprofitable (e.g. because they need to pay more in order to ensure access), some plans would likely exit the market, making the government's job more difficult. An actual longer term solution likely involves paying providers substantially more than current rates for treating Medicaid patients -- something that the government is likely trying to avoid.