Although low Medicaid physician payment rates relative to Medicare have been well-documented, until now there has been little systematic information to characterize the level of Medicaid payments to hospitals. This issue brief presents findings from a first-ever study to construct a state-level payment index to compare fee-for-service inpatient hospital payments across states and to benchmark Medicaid payment to other payers such as Medicare.
The study reports, among other findings, that base Medicaid payment for inpatient services varies considerably among states—ranging from 49 percent to 169 percent of the national average (similar to that previously reported for physician fees), but that overall, Medicaid payment, once supplemental payments are included, is comparable or higher than Medicare.