Medicaid backlog creates payment hassles for physicians

Though 6 million new patients have enrolled for Medicaid coverage due to expansion of the program, media reports say that nearly half of those enrollment applications have yet to be processed.

Though 6 million new patients have enrolled for Medicaid coverage due to expansion of the program, media reports say that nearly half of those enrollment applications have yet to be processed.

Because of the bureaucratic backlog, physicians might get stuck waiting even longer on Medicaid reimbursements for patients who have yet to receive authorization. In addition, practices may incur costs from patients who signed up for but were denied Medicaid coverage.

“It is a concern. The purpose and intent of Medicaid expansion and the Affordable Care Act (ACA) was to create access and remove barriers,” says Robert L. Wergin, MD, FAAFP, president-elect of the American Academy of Family Physicians (AAFP). “We encourage our members to see patients as they need care, but the business model is set up to pay practitioners less than their overhead.”

According to, 2.9 million Medicaid applications have yet to be processed. California has more than 900,000 unprocessed applications, Illinois has 330,000 and North Carolina has yet to process 286,000 applications, with an additional 13,000 that could include more than one person. State agencies blame technology glitches between the federal website and state-run websites, coupled with a high volume of enrollees for the delay.

Kathleen Nolan, director of state policy and programs for the National Association of Medicaid Directors, says that many states encouraged people to enroll in Medicaid in person and through other processes after realizing that applying online was causing difficulties. “We don’t know how many people have come into the system in a different process. Our estimation is that there is already a significant number of people in the pipeline who signed up somewhere else,” Nolan says, adding that there’s no timeframe for when states will be caught up authorizing Medicaid enrollees. “We also have states manually going through applications and verifying missing information.”

Next: Medicaid/Medicare parity


Medicaid benefits are retroactive up to 90 days, though some states require that patients must request retroactive payments. Medicaid applications are supposed to be processed with 45 days, according to the Centers for Medicaid and Medicare Systems.

Because of the possibility that unverified Medicaid patients could be ineligible for coverage, physicians could be responsible for any services rendered before the patient is verified. “In essence, the physician will have to treat [unverified Medicaid patients] as uninsured,” Nolan says.

Primary care physicians already have complaints about Medicaid reimbursement, as the program pays up to two-thirds less than Medicare. The ACA includes funding for increased Medicaid payments for some primary care services to match Medicare payments until the end of 2014, and the AAFP says that the increased reimbursement should be extended. Though the payment adjustment began in 2013, many states have yet to increase their payments to medical practices.

“A lot of practices can’t implement a business model where they can’t take Medicaid patients. Where else will they [the patients] go?” Wergin says. “Most practices will take Medicaid patients. But we also have a financial obligation to meet.”

Medicaid patients already have a harder time scheduling appointments with primary care physicians, according to a Journal of the American Medical Association study. Only 58% of Medicaid patients were able to make an appointment with a primary care physician during the period covered by the study, compared with 85% of patients with private insurance and 79% who paid with cash.

One in five, or 65 million people currently receive health insurance through Medicaid, according to federal data released through April.