state options under Medicaid by creating new Medicaid buy-in options and extended Medicare coverage for working individuals with disabilities. The Act also authorized state demonstration programs to provide Medicaid to workers with potentially severe disabilities, including HIV/AIDS, who are not yet disabled but whose health conditions could be expected to cause disability. Few states have chosen to implement these options.
Once eligible for services, some Medicaid beneficiaries with HIV disease encounter difficulties finding providers—especially experienced providers—who are willing to take them on as patients (Tuller, 2001; Levi and Kates, 2000; CMS, 1999). One reason is financial; adequate reimbursement has been consistently asserted as necessary to ensuring beneficiary access to health care services and more specifically to health care provider participation. By influencing provider participation, low reimbursement rates have been shown to affect access to care for Medicaid beneficiaries in particular (Perloff et al., 1995; Adams, 2001; Kaiser Commission on Medicaid and the Uninsured, 2001; Cunningham, 2002; GAO, 2002; Santerre, 2002). Federal law provides states with considerable discretion in determining the amount Medicaid will reimburse for services provided to beneficiaries on a fee-for-service basis. The limitation on state discretion is that payments must be “sufficient to enlist enough providers so that care and services are available under [the state’s Medicaid program] at least to the extent that such care and services are available to the general population in the geographic area” (CMS, 1999). Furthermore, reimbursement for HIV care in both fee-for-service and managed care settings does not always reflect the true cost of providing care that can be time consuming and resource intensive (Bartlett, 2002; Beronja et al., 2002; Norton and Zuckerman, 2000; Conviser and Murray, 2000). With the advent of more costly protease inhibitors as a mainstay of therapy for HIV, small managed care organizations have found it unprofitable to participate in Medicaid managed-care programs (Conviser et al., 1997). Low reimbursement rates have been suggested as a factor contributing to inferior patterns of care for some Medicaid enrollees with HIV/AIDS (Shapiro et al., 1999). It is instructive that the Medicare program, where reimbursement rates are set nationally at a higher level than Medicaid rates, has consistently higher physician participation, better patient access, and easier patient referrals than Medicaid (MedPAC, 2003).
In many states, Medicaid beneficiaries are enrolled in managed-care organizations (MCO) (Westmoreland, 1999; Kaye and Cardona, 2002). A number of concerns have been raised about enrolling individuals infected with HIV in MCOs (Levi and Kates, 2000). At issue is the adequacy of capitation rates necessary to ensure that MCOs are able to maintain an “adequate provider network” that “includes providers who have both