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Issue Alert - 04-10-08

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Oct 29, 2004

Issue Summary:

Medicaid prescription co-payments are increasing for some recipients, for some types of medications. Michigan appears to be violating federal law by failing to inform recipients about their right to receive services even if they are unable to pay the co-payment, and by instructing pharmacies that they may refuse services to recipients who fail to pay a co-payment.

Persons Affected:

Adult Medicaid recipients



What's Happening?

Effective November 1, 2004, the co-payments for brand name medications for which there is a “generic equivalent” will increase from $1.00 per prescription to $3.00 per prescription. The Department of Community Health (DCH) intends to apply the $3.00 co-payment to ALL name brand medications (including those for which there is no generic) effective January 1, 2005. See the Proposed Policy at In spite of the federal law that prohibits providers from denying services to recipients who cannot pay their co-payment, DCH policy in the Medicaid Provider Manual instructs providers,“If the beneficiary is unable to pay the required co-payment on the date of service, the pharmacy provider cannot refuse to render the service. However, the pharmacy provider may bill the beneficiary the co-payment amount, and the beneficiary is responsible for paying it. IF THE BENEFICIARY FAILS TO PAY A CO-PAYMENT, THE PHARMACY COULD, IN THE FUTURE, REFUSE TO SERVE THE BENEFICIARY AS A MEDICAID PATIENT.” Michigan Medicaid Provider Manual, Provider Chapter page 25 (emphasis added), available at, DCH policy tells providers that they are allowed to refuse Medicaid-covered services to a Medicaid recipient based on the recipient’s failure to pay a co-payment – even if the recipient is unable to pay the co-payment – in violation of federal Medicaid law, 42 U.S.C. 1396o(e).In spite of federal law requiring the state to inform applicants and recipients about available Medicaid services and applicants and recipients’ rights and responsibilities, none of the state’s publications or notices tell recipients about their right to receive services if they are unable to pay a co-payment, or their responsibility to tell the provider if they are unable to pay a co-payment, in order to access services for which a co-payment is required.The state distributes pamphlets telling Medicaid recipients, “You may have a co-payment for these services: chiropractic, dental, hearing aids, pharmacy, podiatry, and vision. Your provider will tell you when you must pay the co-payment.” (See DCH Publication 1111-15) and also that “Under Medicaid You Have the Right to:…Know if a co-payment is required.” (See DCH Publication 201 – “Rights and Responsibilities- If you receive Medicaid and Belong to a health plan”) The pamphlets do not tell recipients about their right to receive services without paying a co-payment if they are unable to pay, nor do they tell recipients to let their medical providers know if they are unable to pay co-payments. Because DCH is not providing information about recipients’ rights and responsibilities in connection with Medicaid co-payments, in violation of 42 CFR 435.905, many recipients are unaware of their rights and do not know that they should inform providers if they cannot pay a co-payment, in order to obtain the service without paying the co-payment.IMPORTANT NOTE: A "SPENDDOWN" AMOUNT IS NOT A "CO-PAYMENT." The information in this alert applies to co-payments, not to spenddown amounts.The information in this Alert applies to the Medicaid program, not to other programs such as the Adult Medical Program, Adult Benefits Waiver program or county health plans.

What Should Advocates Do?

Inform recipients that (1) if they are unable to pay the co-payment for a Medicaid-covered service, they should inform the provider of their inability to pay (2) they are entitled to receive Medicaid-covered services without paying a co-payment that they are unable to afford, if they have informed the provider of their inability to pay the co-payment(3) they should seek legal advice if they are denied a Medicaid-covered service because of their inability to pay a co-payment, even if the co-payment was for a service that they received in the past.Contact the Center for Civil Justice (by email to jdoig@ccj-mi or at the phone number and address at the top of this alert) if you would like to receive informational materials that can be used to educate Michigan Medicaid recipients about their rights in connection with co-payments, or if you are working with a Medicaid recipient who has been denied services because of an inability to pay a co-payment.

What Should Clients Do?

If you are unable to pay a co-payment for Medicaid-covered services:(1) Let the pharmacy or other provider know you are unable to pay the co-payment(2) Ask the pharmacy (or other provider) to fill your prescription (or provide other Medicaid-covered services) without collecting the co-payment from you(3) Call the Medicaid recipient help line (800)642-3195 if a provider refuses to fill a prescription or give you other Medicaid-covered services because you are unable to pay a co-payment. (4) Seek legal advice if you have difficulty getting a prescription filled or getting other Medicaid-covered services because of your inability to pay a co-payment – including a co-payment from a service that was provided in the past. If you live in Arenac, Bay, Clare, Genesee, Gladwin, Gratiot, Huron, Lapeer, Midland, Isabella, Saginaw, Sanilac, St. Clair, or Tuscola County, contact the Center for Civil Justice. If you live in another county, see the information below.

Finding Help

Most legal aid and legal services offices handle these types of cases, and they do not charge a fee. You can locate the "free" legal services or legal aid office that serves your county on the Michigan LawHelp web site ( or look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738.