Medicaid reimbursement rates for primary care services and behavioral health outcomes

We study the effects of changing Medicaid reimbursement rates for primary care services on behavioral health outcomes—defined here as mental illness and substance use disorders. Medicaid enrollees are at elevated risk for these, and other, chronic conditions and are likely to have unmet treatment needs. We apply two‐way fixed‐effects regressions to survey data specifically designed to measure behavioral health outcomes over the period 2010–2016. We find that higher primary care reimbursement rates reduce mental illness and substance use disorders among non‐elderly adult Medicaid enrollees, although we interpret findings for substance use disorders with some caution as they may be vulnerable to differential pre‐trends. Overall, our findings suggest positive spillovers from a policy designed to target primary care services to behavioral health outcomes.