I too would try to keep the coverage and try to find a provider that accepts it. Unless, because you have medicare and you can afford it, there are some less expensive medicare supplemental plans (less expensive than individual plans that is) that more providers are willing to accept than they are medicaid, and your T might be one of them. This way your Medicare is your primary insurance, the supplement is your secondary insurance, and medicaid is only billed if there is any remaining balance, which is rare for there to be any remaining bill with a supplement.
Depending on the plan, most medicare supplements will then pick up 100% after medicare of their approved amounts; if medicare does not approve it though, there is no coverage. This is where a medicare supplement differs from medicaid, an individual plan, or employer-based plan. However, as long as the provider accepts Medicare and bills appropriately, nothing experimental, things should be covered.
Also, in paying for a supplement, keeping track of these amounts for your annual or semi-annual reviews, depending how they are in your state, can be deducted from your medical expenses like any other medical expenses you incur during the year and can help qualify you for additional benefits (food stamps, fuel assistance, etc. ) as you are paying out of pocket for this; it just depends on your state.
Perhaps this might be an option. If not, it is not worth losing the medicaid coverage. There are providers out there that accept it. It is just a matter of finding them.