New analysis finds CT Medicaid payment rates compare well to other states

By Ellen Andrews | May 12, 2025 | Comments Off on New analysis finds CT Medicaid payment rates compare well to other states
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Source: Updated Medicaid-To-Medicare Fee Index: Medicaid Physician Fees Still Lag Behind Medicare Physician Fees, Health Affairs, May 2025.

A new analysis finds that Connecticut Medicaid payment rates averaged 71% of Medicare rates for the same 33 codes for common healthcare services in 2024, slowly narrowing the gap since 2019. The national average was the same at 71%. Comparison state averages were below Connecticut’s.

Comparison states’ Medicaid rates were not as generous as Connecticut’s (71%) in 2024. Medicaid to Medicare rates for New York (69%), Massachusetts (68%), Rhode Island (57%), and New Jersey (55%) were all lower.

There was great variation between service area in Medicaid to Medicare ratios.

  • Connecticut Medicaid pays just over half (56%) what Medicare does for hospital and ED visits. This was the median between comparison states with New York the lowest (39%) and Massachusetts the highest (68%). All five states were below the US average (69%).
  • Connecticut was higher in payments for office visits (73%). Only New York (68%) was higher (78%).
  • Connecticut was one of six states that paid higher than Medicare rates for obstetric care (111%). The US average was 87%, the highest rate among services nationally.
  • Connecticut was again in the middle of comparison states for Other Services (63%) but behind the US average (79%).

In Connecticut and nationally, Medicaid rates are slowly gaining on Medicare payment rates. From 2019 to 2024, Connecticut’s Medicaid rates rose 4% compared to Medicare, as did the national average. Change in the Medicaid to Medicare gap varied widely among comparison states over those years, moving backward in Massachusetts.

Source: Updated Medicaid-To-Medicare Fee Index: Medicaid Physician Fees Still Lag Behind Medicare Physician Fees, Health Affairs, May 2025.

This analysis complements and builds on the recent Medicaid payment studies recently commissioned by DSS with a deep dive into Connecticut-specific rates, Part 1 and Part 2. DSS’s study includes far more detail than this new one that compares across all states.

This new study is limited in several ways. The authors used Medicaid Fee-for-Service payments rates as they did not have access to Medicaid or Medicaid provider rates offered by Medicaid Managed Care Organizations. Comparison states vary significantly in the proportion of Medicaid members in Fee-for-Service plans from 100% for Connecticut to 2% of members in New Jersey. However, research suggests that rates paid by MCOs are very similar to Fee-for-Service state rates (here and here). The authors did not include rates paid to Community Health Centers in this analysis, an important source of care for Medicaid members. Community Health Center rates are significantly higher than for other Medicaid providers.

However, to reflect Medicaid population changes, they did update the basket of services for comparison between their 2019 analysis and this report. They used local Medicare payment rates for comparison to state rates as Medicare rates are set to cover reasonable costs — clinical work, practice expenses, and liability insurance.

Posted in Budget Process, CT Health Reform, Health Reform, Health Report Card, healthcare costs, hospitals, HUSKY, Medicaid, Medicare, providers, research, Stats & Data