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Issue Alert - 04-12-02 rev

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Date:

Dec 21, 2004

Issue Summary:

Effective January 1, 2005: MORE INCREASES IN MEDICAID PRESCRIPTION CO-PAYMENTS for some recipients. Michigan appears to be violating federal law by instructing pharmacies that they may refuse services to recipients who fail to pay a co-payment and by failing to inform recipients about their right to receive services even if they are unable to pay the co-payment.

Persons Affected:

Adult Medicaid recipients

For More Information:

Michigan Poverty Law Program 611 Church Street, Suite 4A Ann Arbor, MI 48104-3000(734) 998-6100(734) 998-9125 Fax


Background

Medicaid

What's Happening?

1. HIGHER CO-PAYMENTSEffective January 1, 2005, the co-payments for ALL NAME BRAND MEDICATIONS provided to Medicaid recipients under the Michigan fee-for-service portion of Medicaid will increase from $1.00 per prescription to $3.00 per prescription. See MSA Policy Bulletin 04-21 available online at the Medicaid Policy Bulletins section of the michigan.gov/mdch website (http://michigan.gov/documents/MSA_04-21_110042_7.pdf). Co-payments for generic drugs will remain at $1.00 per prescription. The co-payments for prescriptions paid for by Medicaid managed care health plans may differ but will not be higher than the fee-for service co-payments.Some Medicaid recipients may be unable to afford these higher co-payments, particularly if their doctor has prescribed several name brand drugs. The co-payments may be a particular hardship for Medicaid recipients with extremely low incomes, such as individuals in living arrangements in which they receive only a small “personal needs” allowance, and individuals whose only income is cash assistance under the State Disability Assistance (SDA), Supplemental Security Income (SSI) or Family Independence Program (FIP). 2. DENIAL OF SERVICEThe Medical Services Administration (MSA) of the Department of Community Health (DCH) also is making “technical” changes to co-payment provisions in its Medicaid Provider Manual, effective January 1, 2005. Under the new language, “Providers may not refuse to render service if a beneficiary is unable to pay the co-payment amount at the time the service is provided. However, THE UNCOLLECTED CO-PAYMENT IS CONSIDERED A BAD DEBT WHICH ALLOWS THE PROVIDER TO REFUSE TO PROVIDE FUTURE SERVICES ACCORDING TO MICHIGAN’S STATE PLAN. Providers who elect not to provide services based on a history of bad debt, including unpaid co-payments, must give beneficiaries appropriate verbal notice and a reasonable opportunity for payment.” (emphasis added) In spite of the federal law that prohibits providers from denying services to recipients who cannot pay their co-payment, 42 U.S.C. 1396o(e), DCH policy continues to tell providers that they may deny service based on co-payments that a recipient is unable to pay. Prior to the “technical” changes, the Provider Manual allowed providers to refuse services to recipients who were unable to pay outstanding co-payments under the guise of refusing to accept them as a Medicaid patient. (See Issue Alert 04-10-08). Now DCH appears to be suggesting that a co-payment is not a co-payment when it is called a “bad debt.” 3. LACK OF INFORMATION FOR RECIPIENTSIn spite of federal law requiring the state to inform applicants and recipients about (1) available Medicaid services and (2) applicants/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 [certain types of services]… 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 in order to assure that they are not unlawfully denied services because of co-payments that they cannot pay. 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 NOTES: 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 or county health plans.

What Should Advocates 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.

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. Seek legal advice if you are denied service because you owe a co-payment for a Medicaid-covered service you received 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 (http://MI.LawHelp.org) or look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738.