Report: Surge in ADHD and Asthma Diagnoses Sparked by Medicaid Changes

A transition from Medicaid’s fee-for-service reimbursement plan to a model known as “managed care” may have increased the probability of a diagnosis for children with asthma or ADHD — two of the most common childhood conditions in the U.S.

By Devon Frye Verified Updated on February 17, 2022

November 27, 2017

According to the CDC, approximately 11 percent of school-age children in the United States have been diagnosed with ADHD. Asthma, a chronic respiratory illness, occurs at a similar frequency — affecting about 10 percent of U.S. children. Both conditions’ diagnosis rates have risen dramatically over the past decade, and new research¹ may suggest why: changes to Medicaid plans have, effectively, made it easier for doctors to diagnose chronic childhood conditions.

Over the last 20 years, more than 80 percent of state Medicaid systems have transitioned to a “managed care” system wherein doctors receive a fee for each patient — rather than a fee for each specific service provided. Managed care plans remove the inequitable financial incentives that encouraged insurers to focus their efforts on healthy children, in the hopes of paying out less money. Instead, they equalize payments for all healthcare — even increasing payments for children with disabilities or chronic conditions.

Asthma and ADHD diagnoses occur with more frequency among children on Medicaid, according to the nationwide Medical Expenditure Panel Survey (MEPS). The authors of the latest research paper, entitled “Exploding Asthma and ADHD Caseloads: The Role of Medicaid Managed Care,” hypothesize that states’ transition to managed care is directly linked to this spike in diagnoses.

To test their hypothesis, the researchers focused specifically on South Carolina’s Medicaid system from 2004 to 2015, using a 60 percent random sample to observe outcomes for more than 500,000 children under the age of 17. They found that as South Carolina transitioned to a managed care model during this time, the probability of a child being diagnosed with ADHD increased by 27 percent. The number of children diagnosed with asthma increased by nearly 30 percent over the same time period.

One possible explanation for the surge in diagnoses: Managed care models allow greater access to healthcare for underserved populations. Under the managed care model, children in South Carolina were 49 percent more likely to have an annual “well-child” visit than they were under the fee-for-service model, the authors found. They were also 69 percent more likely to receive a basic developmental screening test, which may help doctors catch symptoms of ADHD or other developmental delays early.

On the other hand, the authors write, a managed care payment model — which grants a higher fee for children with disabilities — “may also create incentives to increase diagnoses of disability.” This incentive may have resulted in at least some inaccurate diagnoses, they write.

And increased diagnosis rates didn’t always lead to better outcomes. An increase in “preventable” hospitalizations and ER visits — driven primarily, but not entirely, by children with asthma — combined with a decrease in visits to specialists, led the researchers to conclude that many children may have been limited to their annual “well-child” visit. In the absence of more regular visits for minor concerns, families were more likely to turn to the hospital or to the emergency room when health problems escalated.

Additional research into the “disappointing results” is warranted, the authors conclude. “Children on Medicaid are among the most vulnerable patient populations,” they write. “Our results indicate that their care is very sensitive to the incentives provided by the reimbursement system.

“While managed care plans improve access to primary care physicians and ensure that a larger share of Medicaid enrollees benefit from preventive care, other features of the program apparently backfired.”

¹ Chorniy, Anna, et al. “Exploding Asthma and ADHD Caseloads: The Role of Medicaid Managed Care.” The National Bureau of Economic Research, vol. 23983, Oct. 2017, doi:10.3386/w23983.