How Does Medicaid Reimbursements Work In 2023?

If you have Medicaid or are planning on applying for Medicaid in the future, you might be wondering how physicians and other medical professionals get reimbursed. It can be reassuring to know how your care is going to be covered. 

This article will be giving a detailed overview of the Medicaid reimbursement process, so if you have been wanting to learn more about how these benefits are paid for, then you have come to the right place! I will be going over the process of two different ways that medical care can be reimbursed by Medicaid.

Read on to learn more about Medicaid reimbursements so that you can select the best providers for your benefits!

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• Medicaid Reimbursement Models
  • Fee For Service Model
  • Managed Care Model
• Further Resources

Medicaid Reimbursement Models

Since each state has its own Medicaid program, that means there can be some variation in how each state implements Medicaid benefits and distributes Medicaid reimbursements. 

While there are differences between every state’s Medicaid program, all of the states will distribute reimbursements one of two ways depending on the type of care in that state. All states have either a “fee for service” model or a “managed care model.” 

Depending on which of these your state of residence uses, the reimbursement will go through a certain process. 

Fee For Service Model

If your state uses the fee-for-service model, then each service will be itemized on a receipt for reimbursement. The reimbursement will be the sum total of each individual charge for each individual treatment. 

For example, if you go in to see a doctor for a sprained wrist and also get a flu shot, then the itemized receipt might list the examination of the wrist, medicine such as cortisol, a splint, and the inoculation. The following reimbursement would equal precisely the cost of each of these items. 

If your state is on the fee-for-service model, it can be beneficial to be cautious of overtreatment. Since reimbursements are for each treatment, there are cases where patients receive unnecessary care for the sake of racking up the final bill. 

Managed Care Model

The majority of states have transitioned into a managed care model now. The reimbursement will be distributed for an entire appointment rather than each distinct part of one. 

For example, if you have an appointment for that same sprained wrist and also get a flu shot, then the reimbursement will be a preset amount. That amount paid as a reimbursement would be the exact same whether you got the flu shot or not. 

In a managed care model, it is not financially beneficial for the medical professional to administer more treatments because that will mean they are paid less per treatment than if they limit it. This does mean that it disincentivizes the overtreatment of patients but can raise another potential problem of not getting enough treatment. This is something to always keep in mind when you are seeking medical treatment. 

Further Resources

If you want to learn more about the entire Medicaid process in your state of residence, HERE is a comprehensive overview of each state’s coverage. You will also find resources for contacting the program administers in your state there. 

Additionally, if you are not yet a Medicaid beneficiary, check out this link to learn more about applying in your state of residence!