Unreasonable Standards Will Likely Discourage Hospitals from Doing Presumptive Eligibility

I’ve written several Say Ahhh! blogs on the Affordable Care Act’s new hospital presumptive eligibility provisions. The ACA explicitly gives hospitals the prerogative to make Medicaid presumptive eligibility (PE) decisions, regardless of whether the state has previously implemented the policy option. In particular, presumptive eligibility provides a great opportunity for hospitals to connect uninsured kids and their parents to coverage, especially during this breaking-in period for new Medicaid eligibility systems.

In this new policy brief published by Health Affairs, I outline how the ACA changes presumptive eligibility and what some of the critical decision points are for states as they implement the provision. Specifically, states are required to monitor presumptive eligibility to ensure that hospitals (and other qualified entities) are meeting state and federal requirements. States may also establish standards, such as requir­ing hospitals to assist people with completing regular applications or achieving a high pro­portion of people who are determined eligible for ongoing Medicaid coverage. For states ex­panding Medicaid, this is particularly impor­tant because the 100 percent federal match for health care services provided to newly eligible people during the presumptive period is available only if a full Medicaid de­termination is made.

As I wrote in the policy brief, the bigger question is, “Where should states set the bar?” Setting standards too high will likely dampen any enthusiasm hospitals may have for participating, while setting them too low could detract from the potential of presumptive eligibility to connect people with ongoing coverage. States may want to start with more modest standards or by collecting performance metrics data to establish a baseline before setting more aggressive expectations.

Florida is clearly choosing a path to discourage hospitals in setting its standards. Rather than putting out the welcome mat, these standards looked more like a “do not enter” sign:

  • 95% of individuals will submit regular application before the end of the presumptive eligibility period
  • Average number of days after the presumptive determination is made and when the full application is submitted is less than 10 days
  • 97% of individuals who apply for ongoing coverage will be determined eligible for regular Medicaid

I’m all for setting standards and even having hospitals stretch to ensure that individuals determined presumptively eligible are connected to ongoing coverage. However, given that the 3-year (2008-2010) national error rate for eligibility determinations is 5.9%, does the state of Florida even hit the 97% accuracy level? Will the state commit to making sure that everyone who reaches out for assistance over the phone or in person submits a full application within 10 days?

When you look at the PE agreement that Florida hospitals are required to sign and other documents, including the training, there doesn’t seem to be any commitment from the state in terms of prompt processing of presumptive eligibility enrollment. If the individual needs services not provided by the hospital, such as prescription drugs, can they readily access those services? If the state is going to hold hospitals to high standards, they should do the same for themselves.

Other states are being more reasonable. For example, Virginia is requiring hospitals to ensure that 85% of individuals determined presumptively eligible submit a full Medicaid application, and of those, 70% must be determined eligible for ongoing coverage. This seems much more realistic when you consider how low income individuals experience fluctuating employment and income, and that incomplete applications are a long-standing reality in Medicaid (albeit one we are trying to address by simplifying the application process and verifying eligibility electronically).

Hospitals need to be educated about the new rules and prepared to negotiate with their state before unrealistic standards are set. Congress gave hospitals the prerogative to make presumptive eligibility decisions, regardless of the state’s position on the matter. Hospitals should not let states take their authority away by settling for standards that are clearly intended to dissuade them from assisting individuals in need of care and coverage.

Tricia Brooks
Tricia Brooks is a Senior Fellow at the Center for Children and Families

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