Keeping Care Affordable: CMS Stands up for California Kids

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By Michael Odeh, Children Now

Earlier this month the federal Centers for Medicare and Medicaid Services (CMS) made an important ruling that truly embraces the “AFFORDABLE” in the Affordable Care Act (ACA).

Health care services and economics research over the past four decades has clearly shown that unaffordable cost-sharing in health care can be a barrier to children and their families accessing and utilizing the care they need. And for low-income families, even modest co-payments can be unaffordable and the ultimate effect is that patients reduce their use of both essential and less-essential services.

The California plan passed as part of last year’s budget sought to impose, for the first time ever, mandatory co-payments for children and other Medicaid enrollees – no exemptions for any of the most vulnerable populations. The following mandatory co-payments were proposed:

* $50 for emergency room services;

* $50 for non-emergency use of an Emergency Room;

* $100 for an inpatient hospital stay (with a maximum of $200 per stay); and

* $5 per for each doctor’s office visit, clinic visit, dental visit, and brand name prescription drug ($3 for generic prescriptions).

Furthermore, the burden to collect the required co-pays was to be put on Medicaid providers. These providers, who have already been hit hard over the past couple years, could either make the decision to refuse patients for non-payment (i.e., deny services) or provide services at the lower reimbursement rate paid by the state without collecting the co-payment from their patient, which is precisely why this plan was effectively just another cut to providers.

A number of California and national children’s groups expressed their strong opposition to the state’s proposal, which was submitted as an amendment to California’s $10 billion Medicaid 1115 waiver approved in 2010 (as the “bridge” to health reform in 2014).

Despite the state’s attempt to tie the co-payment proposal to the waiver and health reform, let’s make no mistake that the Medicaid co-payment proposal was purely for purposes of achieving $575 million in budget savings.

That’s why it is completely appropriate that CMS denied the request, stating that they were “unable to identify the legal and policy support” for the state’s request. CMS directly cites section 1916(f) of Title XIX of the Social Security Act, which allows changes to Medicaid cost-sharing protections only if they demonstrates a unique and untested use of co-payments, are limited to two years or less, will provide benefits to recipients, and are voluntary. California’s request on its face clearly did not meet the 1916(f) criteria and nothing in the state’s rationale suggested the proposal would improve patient care and quality.

The action and reasoning by CMS is consistent with the ruling last year by the 9th U.S. Circuit Court of Appeals on co-payments for childless adults in Arizona’s Medicaid program. Budget savings are clearly no justification for imposing co-payments on the lowest-income and most vulnerable citizens.

There’s a reason why Affordable is in the title of the ACA, which itself is all about making coverage and care affordable and accessible for all families. Keeping Medicaid affordable is clearly in line with that vision, and denial of California’s ill-conceived Medicaid co-payment request is an important step in making the ACA a reality.

Note: The author would like to acknowledge the assistance of his 100% Campaign  colleagues.