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Issue Alert - 06-04-01

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Date: Apr 05, 2006
Program Area:

Medicaid
Issue Summary:

Effective March 21, 2006, pharmacies cannot refuse to fill prescriptions for Medicaid recipients because the recipients are unable to pay their co-payments
Persons Affected:

Medicaid recipients who are unable to pay their prescription co-payments
For More Information:

Center for Civil Justice 320 S. Washington, 2nd Floor Saginaw, MI 48607 (989) 755-3120, (800)724-7441 Fax: (989) 755-3558 E-mail: info@ccj-mi.org

Michigan Poverty Law Program 611 Church Street, Suite 4A Ann Arbor, MI 48104-3000 (734) 998-6100 (734) 998-9125 Fax
Background
Non-pregnant adult Michigan Medicaid recipients who are not living in a nursing home may be required to pay a $1 co-payment for each generic prescription and $3 for each name brand prescription that is covered by Medicaid. Some Medicaid managed care plans do not charge co-payments for prescription drugs that are covered by their plans, while others do.

Adult Medicaid recipients who are not pregnant and not living in a nursing home, and who have prescriptions covered by the Medicaid fee-for-service (non-managed care) program are required to pay co-payments for those prescriptions. Prescriptions covered by the Medicaid fee-for-service program include:

• For fee-for-service (non-managed care) recipients who do not have Medicare, all of their Medicaid-covered prescriptions.

• For "dual eligible" (individuals who have both fee-for-service Medicaid and Medicare), the classes of medications that are excluded from coverage under Medicare Part D (e.g. benzodiazepines and barbiturates).

• For Medicaid recipients in managed care plans, certain classes of medications that are "carved out" of the managed care plans (e.g. some medications for the treatment of mental illness and HIV/AIDS).

Until recently, Medicaid recipients who were unable to pay their co-payments could be refused medication if they owed money to the pharmacy for prescriptions or other items received in the past. The result of this policy was, in effect, a "one time only" policy, under which a recipient could get a prescription filled if they were unable to pay the co-payment, but if they were unable to reimburse the pharmacy for that co-payment before they needed another prescription filled, they could be denied the subsequent prescription based on their failure to pay the co-payment for the earlier prescription- even if they were unable to pay the out-standing co-payment debt. (See Issue Alerts 04-10-08 and 04-12-02 rev)
What's Happening?
As the result of a federal court ruling, Medicaid recipients cannot be denied Medicaid-covered services at pharmacies because of their inability to pay Medicaid co-payments.
The federal court ruled that the policy under which recipients were denied Medicaid-covered prescriptions because of their inability to pay a "bad debt" co-payment violates the Medicaid statute, 42 U.S.C. 1396o(e).

On March 15, 2006, the Department of Community Health has issued a Policy Bulletin (MSA 06-19) telling pharmacies that they can no longer deny services based on "bad debt." The policy bulletin is available online by going to http://www.michigan.gov/mdch and clicking on "Medicaid Policy Bulletins" at the bottom of the home page.

Medicaid recipients must tell the pharmacy if they are unable to pay the co-payment. However, no further verification of inability to pay is necessary.

Please note that this protection from denial of service does NOT apply to prescription co-payments that are required under Medicare Part D or the Adult Benefits Program/Adult Benefits Waiver program or County Health Plans.

The ruling in the case is on appeal to the Sixth Circuit. Both the District Court and the Court of Appeals have denied a stay of the ruling pending the appeal. The Medicaid recipients are appealing the court's failure to apply its ruling to ALL co-payments, not just those that are owed to pharmacies, and the court's failure to certify the case as a class action. The State Agencies disagree with the Court's ruling and also seek a ruling on the effect of the Deficit Reduction Act on the court's ruling, the recipients' rights, and the state agencies' ability to apply the challenged policy.
What Should Advocates Do?

Make sure your clients are aware of their rights to not be denied prescription services by a pharmacy on account of their inability to pay co-payments. Agencies or organizations that would like to receive informational cards for distribution to clients may contact the Center for Civil Justice by email (see above).

Agencies and advocates with questions about the effects of the lawsuit or about other Medicaid co-payment problems may contact the Center for Civil Justice (see contact information, above. (Also see Issue Alert 06-04-02.)
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.
Finding Help

Most legal aid and legal services offices handle these types of cases, and they do not charge a fee. You can locate various sources of legal and related services, including the free legal aid office that serves your county, at MichiganLegalAid.org.

You can also look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738.
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