Private Payers News

Pediatric Data Reveals Private Payer, Medicaid Spending Gaps

An analysis of payment data for pediatric services reveals significant spending gaps between private payer and Medicaid coverage.

Pediatric data analysis reveals payer spending gaps

Source: Thinkstock

By Thomas Beaton

- Private payers spend close to twice as much on pediatric services as Medicaid, according to a statistical brief from AHRQ, highlighting significant disparities in cost related to visit type and geographical region.

Data from the 2015 Household Component of the Medical Expenditure Panel Survey (MEPS-HC) revealed that the mean total payments for private payer services was $88 higher than reimbursements made through Medicaid ($214 for private payers versus $126 for Medicaid).

“However, the magnitude of the difference in median total payments of $44 was notably smaller ($126 for private insurance versus $82 for Medicaid-covered visits),” AHRQ explained.

“The larger gap in mean than median total payments is attributable to a greater preponderance of very expensive privately covered visits. For example, in 2015, the average total payments for the 10 percent most costly privately insured child visits were $406 or more but were only $215 or more for the most expensive 10 percent of Medicaid covered child visits.”

Geographically, the proportion of visits by children in the South was higher for the Medicaid than the privately insured group, where child care visits to providers consisted of 42.2 percent Medicaid visits and 33.6 percent of privately-insured visits.

Based on US regions, the largest differences in private payer and Medicaid child service payments were in the Midwest followed by the Northeast, West, and the South. 

Geographic gaps in child healthcare service payments by payer type

Source: AHRQ

“In 2014-2015, mean total payments per child visit to office-based physicians were higher for privately insured than Medicaid covered visits in each of the four Census regions and there was also no significant variation across regions in the magnitude of the Private/Medicaid payment gaps”

The type of provider visits including child visits to providers in primary care, pediatrics and ophthalmology did not vary significantly by payer category, but did vary based on specialty visit.

Psychiatrist child visits were a higher proportion in Medicaid covered visits compared to privately insured visits, consisting of 8.9 percent and 4.7 percent of all provider visits, respectively.

“Conversely, higher proportions of privately insured than Medicaid visits were to orthopedists (4.0 percent versus 2.2 percent) and to the range of other specialties combined that were not shown separately (14.7 percent versus 11.0 percent),” AHRQ said.

Average total payments per child visit by provider type were higher for privately insured than Medicaid-covered visits within each physician specialty category.

“The joint federal-state Medicaid program, which covers certain types of low-income persons including children and their eligible parents, typically pays physicians less than private insurers,” AHRQ said.

“Given these generally lower reimbursement rates, children enrolled in Medicaid may have more difficulty gaining access to physicians, obtaining timely appointments or getting referrals to specialists than their privately insured counterparts.”

When comparing private payer and Medicaid payment differences in average payments per visit across physician specialty categories, the largest difference was the $261 higher payments for privately-insured orthopedist visits ($423 vs. $162).

Other large differences in specialty provider visit payments between private payers and Medicaid included ophthalmology visits ($275 vs. $176), psychiatry ($184 vs.$111), and pediatrics ($190 vs. $115).

A continued analysis of child care visit data may help private payers in the future towards reducing the cost of expensive child care visits and expand visit affordability for families.