Motivation. Access to specialty services is a widely acknowledged problem for Medicaid enrollees. A key barrier is low Medicaid payment relative to what specialists can earn from other payers. The Affordable Care Act of 2010 does not address inadequate specialty access. In the context of large federal and state budget deficits and Medicaid expansions under health care reform, increased federal and state Medicaid outlays to support the provision of specialty care seem unlikely over the next several years. Finding efficient ways to provide specialty care may prove more fruitful in expanding access to these services.

      Safety net providers and public payers have experimented with approaches to improve specialty care access, but there has been little success in scaling up or replicating these models. Prior studies have not explored the economic incentives that encourage organizations and physicians to join and sustain these efforts, which could inform policies aimed to assure adequate access to specialty services for Medicaid enrollees.

        Study Objective. The study objectives were to 1) identify financing models of specialty care access for Medicaid patients and assess them in terms of sustainability; 2) analyze existing policy barriers that affect the economic incentives of specialists to treat Medicaid patients; and 3) analyze the potential of policy alternatives to improve sustainability.

     We conducted a review and consulted national experts to identify six models that were improving access to specialty services, which included a financing mechanism and showed potential for replication. Selected models included: 1) partnership between a federally qualified health center (FQHC) and academic medical center (AMC); 2) e-consultations between specialists and primary care providers (PCPs); 3) health plan use of specialty care coordinators; 4) health plan’s statewide telemedicine initiative; 5) AMC use of videoconferencing to link specialty teams to rural providers; and 6) state patient-centered medical home initiative. In January-April 2012 we conducted 30 semi-structured interviews with lead organizations, community partners, specialists, and policy makers participating in each model.

     Findings. These models emphasized improving the efficiency of specialty care provision, including:  engagement of primary care and specialty providers at the system level to establish guidelines for appropriate referrals; providing specialty services in the primary care setting; efficient use of specialist time through phone or e-consultation, and educational supports for PCPs to manage the care of patients with complex health needs, to reduce the number of referrals required.

     Policy Implications. The current encounter-based system of reimbursement presents a major barrier to providing specialty care in new ways because these models commonly rely on specialist time that is not billable as a visit. Safety net providers or health plans absorb the cost of negotiated payments to specialists. Policy responses to address these barriers might include extending the scope of fee-for-service payments to include encounters other than face-to-face patient visits, such as physician-to-physician e-consults, or implementing bundled payments for care episodes or global payment for a population, thus allowing institutions to choose how to allocate resources. Support for this research was provided by The Commonwealth Fund.