When Can States Impose Copayments for Non-Emergency Use of ERs?

By Wesley Prater

We have been hearing that more states are looking to use copayments to deter non-emergency use of the emergency room for low-income families, so it’s probably a good idea to discuss what the federal rules are and how some states have already been dealing with this issue.  In an effort to try to keep it short and sweet, I will discuss the federal rules in this blog and briefly discuss what states are doing in a later blog.

The Deficit Reduction Act of 2005 (DRA) gave states new options to impose cost- sharing (premiums, deductibles, coinsurance or copayments) on families enrolled in Medicaid in certain circumstances without a waiver from the federal Department of Health and Human Services (HHS).

The following groups are generally protected from the imposition of copayments:

* “Mandatory” children  – children under age six with family income below 133% of the Federal Poverty Level (FPL) and children ages six to 17 with family income below 100% of the FPL;

* Children in foster care and adoption assistance programs, regardless of age;

* Children with disabilities eligible for Medicaid under the Family Opportunity Act;

* Breast/cervical cancer patients;

* Pregnant women receiving pregnancy related services; and

* Individuals in a hospital, nursing home, hospice, hospitals, or ICF-MRs.

However, the DRA allows for nominal copayments for non-emergency use of the emergency room for these groups and the Secretary of Health and Human Services has the discretion to define nominal copayments.   Currently, the maximum nominal amount allowed is $3.65.

Under DRA rules, once it is determined that a non-emergency condition exists, certain conditions must be met to impose these copayments:

* Determine if there is an available and accessible provider that can provide the necessary non-emergency services for the patient;

* The alternate provider can provide the services without imposing the higher cost sharing for the inappropriate use of the emergency room;

* The patient must be informed of the state-specific cost-sharing amount that may be required;  

* The hospital must provide the name and location of an alternate provider (i.e. physician’s office, health care clinic, community health center, hospital outpatient department) that is available and accessible; and

* The hospital must provide a referral to coordinate scheduling of treatment.

After these conditions are met, copayments may be imposed if the patient chooses to stay at the emergency room for non-emergency treatment but federal law does allow the hospital to waive the copay at its discretion, on a case-by-case basis.  Income levels determine the amount of the copayment.

Individuals with incomes less than 100 percent of FPL can be asked to pay a nominal copayment, but not mandated to pay it.  Federal law requires that services must be provided in the emergency room even if the copayment is not paid. 

Individuals with incomes between 100 – 150 percent of FPL can be required to pay up to twice the nominal amount at $7.30.  Once a patient has been determined to have a non-emergency condition and stays in the emergency room after being notified that there is an alternate Medicaid provider available, copayments can be imposed.  Services can be withheld if the payment is not made.

Individuals with incomes over 150 percent of FPL can be required to pay up to twice the nominal amount. Once a patient has been determined to have a non-emergency condition and stays in the emergency room after being notified that there is an alternate Medicaid provider available, copayments can be imposed.  Services can be withheld if the payment is not made.  This amount has no limit and states will have to include this in their state plan amendment (SPA).  However, states cannot impose cost sharing that exceeds five percent of family income.

We know that Alabama, Florida, Idaho, Illinois, Iowa, Kentucky, New Jersey, North Carolina, Tennessee and Wisconsin enrollees charge a copayment for non-emergency use of the ER for low-income children and families.  In part 2 of my blog, I will try to explore a few states that use the DRA rules to impose copayments for non-emergency use as well as states that impose copayments through a waiver.  Stay tuned…

 

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