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Issue Alert - Medicaid Denial of Service Policy Changes

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Date:

Jan 25, 2007

Program Area:

Medicaid

Issue Summary:

Policy on denial of service when Medicaid recipients are unable to pay Medicaid co-payments is changing again, effective February 1, 2007

Persons Affected:

Medicaid recipients who have co-payments they are unable to pay

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


Background

Federal Medicaid law includes limits on co-payments for Medicaid-covered services, including recipients who cannot be charged a co-payment for Medicaid-covered services, types of services that cannot be subject to co-pays, and the amount of the co-pays that may be required.  These are described in Issue Alert 06-04-02 http://www.mplp.org/Issues/mplpissue.2006-04-06.2409176810/view?searchterm=Medicaid%20co-payments.

 

Federal law also prohibits the state from allowing medical providers to deny services to Medicaid recipients based on the recipient’s inability to pay co-payments.  (See, e.g., 42 USC 1396o(e).)  

 

In the case of Beeker v. Olszewski, several Michigan Medicaid recipients challenged the state’s policy allowing providers to deny services based on co-payments for unpaid debts that in fact were Medicaid co-payments the recipient was unable to pay, based on the federal Medicaid law.  The District Court ruled in favor of the Plaintiffs but did not certify the case as a class action and did not extend its holding to providers other than pharmacies.  Both the Medicaid recipients who filed the case and the state appealed the Beeker decision.  The new policy was issued as the result of a settlement of the cross-appeals, which have now been dismissed with prejudice.  

 

Under the settlement agreement, the Medicaid recipients who filed the Beeker case agreed to the changes described in the “WHAT’S HAPPENING” section of this Alert for a period that expires on October 1, 2007.  The settlement contained other provisions, including requirements for Medicaid Helpline assistance to recipients who are denied services based on co-payment debts and a prohibition against amending the Medicaid State Plan under certain co-payment provisions of the Deficit Reduction Act of 2005.  Because the case was not certified as a class action, the settlement is not legally binding on other recipients. 

The outcome of the Beeker case in U.S. District Court is described in Issue Alert 06-04-01 (available at: http://www.mplp.org/Issues/mplpissue.2006-04-04.5732227066/view?searchterm=co-payments) and the District Court’s order in that case is available at http://www.mplp.org/Resources/mplpresource.2006-06-06.9220408665/getFile.  Under policy issued by the state in response to the District Court Order, beginning March 21, 2006, pharmacies were prohibited from denying services to Medicaid recipients based on the recipients’ inability to pay either current OR PAST co-payments owed for a Medicaid-covered service.   Policy for other providers continued to state that services could be denied if the recipient owed a bad debt) and had been given adequate notice and a reasonable opportunity to pay the debt – even if the debt was a co-payment they were unable to pay.

 

The policy changes described in this Alert and the notice that was sent to all Michigan Medicaid recipients in January 2007 are available online by going to http://www.michigan.gov/mdch and clicking on "Medicaid Policy Bulletins" at the bottom of the home page.

or at http://michigan.gov/documents/mdch/MSA-07-03_Bad_Debt_Bulletin_182177_7.pdf.

What's Happening?

Pharmacy policy

Beginning February 1, 2007, pharmacies will be permitted to deny services based on co-payment debts incurred on or after February 1, 2007,  but only if they meet the requirements explained in the new policy.

All Medicaid providers

Beginning February 1, 2007, there are changes in the Medicaid policy on how and when providers may deny services to Medicaid recipients based on “co-payment debt” for services received in the past.  The new policy explains procedures that must be followed by providers if the providers intend to deny services to recipient based on inability to pay Medicaid co-payment debts incurred for previously-received services. 

 

 

WHAT IS NOT CHANGING:

The amount of the Medicaid co-payments that may be charged, the recipients who may be subject to co-payments, and the services for which co-payments may be charged are NOT CHANGED. 

 

The fact that a recipient cannot be denied services because of his or her inability to pay the Medicaid co-payment for the service currently being requested is NOT CHANGED.

 

 

WHAT IS CHANGING:

Beginning February 1, 2007, the following changes will be made in Medicaid co-payment collection process:

 

  1. ALL PROVIDERS will be prohibited from denying services to a Medicaid recipient based on any debt owed for a Medicaid co-payment incurred prior to February 1, 2007.
  2. For co-payments incurred on or after February 1, 2007, ALL PROVIDERS may not deny services based on a co-payment owed for a previously-rendered service unless the provider has given the recipient

-        “Appropriate notice of the debt”, which must include documentation of the debt “such as a billing statement, invoice, cash register receipt, or other writing showing the co-payment amount owed”  and

-        Reasonable opportunity to pay the debt.

  1. ALL PROVIDERS who refuse services because of a co-payment debt must

-          either give the recipient a copy of his/her treatment record or transfer the record to another provider, upon the recipient’s request,  and

-          refer recipient’s with questions or concerns about the denial or about access to care to the Medicaid helpline (800-642-3195) if s/he has fee-for-service Medicaid, or to their Health Plan’s customer service number

  1. PROVIDERS (EXCEPT  PHYSICIANS AND DENTISTS) may not deny services based on a co-payment owed for a previously-rendered service unless the provider

-          Has a written policy on denial of service based on co-pay debt that includes

a.     Method of furnishing notice

b.     Minimum length of time and terms of payment allowed as reasonable opportunity for payment

c.      A statement that recipients cannot be denied service because of inability to pay the co-payment for the currently requested service

-          Has established procedures for maintaining business records with the  amount of the co-pay debt, the date notice was given to the recipient, and the date(s) and amounts of payment(s) by the recipient

-          Gives notice to the recipient at least 30 days (60 for hospitals) prior to denial of service that includes:

a.     Time period allowed for payment of the debt in order to avoid denial of future service

b.     Dollar amount of minimum payment required to avoid future denial or service

c.      Statement that cannot be denied service if makes the payment in the designated amount and time period

-          Gives the notice in writing, except that verbal notice may be given if the provider:

a.     Publicly posts their policy on denial of service

b.     Provides a copy of the policy when verbal notice is given, or points out the posted notice and offers to provide a copy

c.      Provides a copy of the policy immediately on request

Although the specific requirements summarized in section “D” above are not imposed on physicians and dentists, they may be considered in determining whether the notice given by the physician or dentist was appropriate and whether the opportunity for payment was reasonable.

NOTE:  Remember that Medicaid co-payments are different than Adult Medical Plan (or Plan A) co-payments, County Plan co-payments,  Medicare co-payments (including Medicare Part D prescription co-payments), Medicaid deductibles or spend-down amounts, and amounts owed for services that are not covered by Medicaid.    The policy described above applies ONLY to MEDICAID CO-PAYMENTS.

What Should Advocates Do?

Advise Medicaid recipients that under federal law they cannot be denied services because of their inability to pay Medicaid co-payments.

 

Advise Medicaid recipients that, under state policy,  providers may deny them services if they fail to pay Medicaid co-payments for services received in the past (but after January 31, 2007), but only if the providers give them the notice and opportunity to pay as required by the  policy.

 

Contact the Center for Civil Justice at (989)755-3120 if you have questions about the legal rights of Medicaid recipients who were not named Plaintiffs in the Beeker case or about the policy described in this Issue Alert.

 

Advise Medicaid recipients who are denied service in violation of the state policy to:

1.      Call the Medicaid Helpline at (800)642-3195 to report the problem and ask for an investigation and help getting services.

Call the Center for Civil Justice at (800)724-7441 if the problem is not resolved by the helpline

What Should Clients Do?

If you are a Medicaid recipient and are unable to pay a Medicaid co-payment for a service you need, you should:

1.     Tell your Medicaid provider that you are unable to pay.  (You do not have to prove this, the provider must accept your word.)

2.     Call the Medicaid Helpline at (800) 642-3195 if you are denied a service because you cannot pay the Medicaid co-payment for the service that is being denied.  Report the problem and ask the Helpline to help you get the medical services you need.

3.     Call the Center for Civil Justice at (800) 724-7441 if the Helpline does not solve the problem. 

 

If you are a Medicaid recipient and are being denied service because you are unable to pay a Medicaid co-payment for a service you received in the past:

1.      If the co-payment is owed for a service you received before February 1, 2007, call the Medicaid Helpline at (800)642-3195 to report the problem and ask for help because the provider should not deny you service based on bills owed before this date.

2.      If the provider did not give you appropriate notice of the bill and a reasonable opportunity to pay the co-payment, call the Medicaid Helpline at (800)642-3195 to report the problem and ask for help.

3.      If the Medicaid Helpline does not solve the problem, call the Center for Civil Justice at (800)724-7441.

4.      If the provider gave you notice and an opportunity to pay but you still are unable to pay and you still cannot get medical care or services you need, call the Center for Civil Justice at (800)724-7441.

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.