Fwd: qotd: Proposed Rule on Medicaid Premiums and Cost Sharing

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-------- Original Message --------
Subject: qotd: Proposed Rule on Medicaid Premiums and Cost Sharing
Date: Wed, 23 Jan 2013 13:08:47 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Federal Register
January 22, 2013
A Proposed Rule by the Centers for Medicare & Medicaid Services

Medicaid, Children's Health Insurance Programs, and Exchanges: Essential
Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair
Hearing and Appeal Processes for Medicaid and Exchange Eligibility
Appeals and Other Provisions Related to Eligibility and Enrollment for
Exchanges, Medicaid and CHIP, and Medicaid Premiums and Cost Sharing

This proposed rule would implement provisions of the Patient Protection
and Affordable Care Act of 2010 and the Health Care and Education
Reconciliation Act of 2010 (collectively referred to as the Affordable
Care Act), and the Children's Health Insurance Program Reauthorization
Act of 2009 (CHIPRA).

IV. Medicaid Premiums and Cost Sharing

A. Background

Section 1916 of the Act describes long-standing requirements for cost
sharing, which apply broadly to all individuals who are not specifically
exempted. Such cost sharing is limited to "nominal" amounts. Section
1916 of the Act also establishes authority for states to impose premiums
on specific groups of beneficiaries with family income above 150 percent
of the federal poverty level (FPL). The Deficit Reduction Act of 2005
(DRA) established a new section 1916A of the Act, which gives states
additional flexibility, allowing for alternative premiums and cost
sharing, beyond what is allowed under section 1916 of the Act, for
somewhat higher income beneficiaries. Such alternative cost sharing may
be targeted to specific groups of beneficiaries and payment may be
required as a condition of providing services. Alternative premiums and
cost sharing imposed under section 1916A of the Act, cannot exceed five
percent of family income.

B. Provisions of Proposed Rule

2. Update to Maximum Nominal Cost Sharing (§ 447.52)

Under the authority granted under sections 1916(a)(3) and (b)(3) of the
Act for the Secretary to define nominal cost sharing, at § 447.52(b) we
propose to revise the maximum amount of nominal cost sharing for
outpatient services, which may be imposed on beneficiaries with incomes
below 100 percent of the FPL.

To simplify the rules, we propose to remove the state payment as the
basis for the cost sharing charge and replace it with a flat $4 maximum
allowable charge for outpatient services.

Current rules permit cost sharing for institutional care, up to 50
percent of the cost for the first day of care, for individuals with
incomes below 100 percent of the FPL. We are not proposing a change but
are considering alternatives for the maximum allowable cost sharing
related to an inpatient stay because this is a relatively high cost for
very low income people and not a service that consumers have the ability
to avoid or prevent. Options under consideration include the $4 maximum
applied to outpatient services, $50, or $100, which would encompass the
majority of hospital cost sharing currently in effect

3. Higher Cost Sharing Permitted for Individuals With Incomes Above 100
Percent of the FPL (§ 447.52)

Proposed § 447.52 consolidates the requirements for cost sharing
established under sections 1916 and 1916A of the Act. Under the statute,
states may impose cost sharing at higher than nominal levels for
nonexempt individuals with incomes at or above 100 percent of the FPL.
Section 1916A provides that states may establish cost sharing for
nonexempt services, other than drugs and ED services, up to 10 percent
of the cost paid by the state for such services, for individuals with
incomes between 100 and 150 percent of the FPL.

4. Cost Sharing for Drugs (§ 447.53)

To provide additional flexibility to states, and to further encourage
the use of preferred drugs, we are proposing to define nominal for this
purpose so as to allow cost sharing of up to $8 for non-preferred drugs
for individuals with income equal to or less than 150 percent of the FPL
or who are otherwise exempt from cost sharing. States will have the
flexibility to apply differential cost sharing for preferred and
non-preferred drugs in whatever manner they consider most effective. For
example, a state may charge $2 for preferred and $6 for non-preferred
drugs or $0 for preferred and $8 for non-preferred drugs.

For individuals with family income above 150 percent of the FPL, per
section 1916A(c) of the Act, cost sharing for non-preferred drugs may
not exceed 20 percent of the cost the agency pays for the drug.

5. Cost Sharing for Emergency Department Services (§ 447.54)

In order to make it easier for states to utilize existing flexibilities
to reduce non-emergency use of the ED, at § 447.54(a) we propose to
allow cost sharing of up to $8 for non-emergency use of the ED no waiver
will be required.

For individuals with family income above 150 percent of the FPL, per
section 1916A(e) of the Act, there is no limit on the cost sharing that
may be imposed for non-emergency use of the ED.

If an emergency condition does not exist, § 447.54(d) includes the
requirements for hospital screening and referral currently codified at §
447.80(b)(2), to ensure that beneficiaries have appropriate access to
other sources of care, before cost sharing is imposed. Hospitals must
assess the individual clinically, identify an accessible and available
alternative provider with lesser cost sharing, and establish a referral
to coordinate scheduling. Examples of accessible alternative providers
are those that are located within close proximity, accessible via public
transportation, open extended hours, and able to serve individuals with
LEP and disabilities.

5. Premiums (§ 447.55)

At proposed § 447.55, we consolidate and simplify the requirements for
premiums established under sections 1916 and 1916A of the Act. Proposed
§ 447.56(a) describes the option to impose premiums on individuals with
family income above 150 percent of the FPL, as established under section
1916A of the Act, while paragraphs (a)(1) through (a)(5) describe the
options to impose premiums for specific populations as established under
section 1916 of the Act. Except for the minor revisions described below,
we are not seeking to change current policy related to premiums.

At § 447.55(a)(5), we propose to revise requirements related to premiums
imposed on medically needy individuals whose income is under 150 percent
of the FPL. We removed the current income-related scale currently at §
447.52(b) and instead would provide states with the flexibility to
determine their own sliding scale for establishing premiums for the
medically needy up to maximum of $20 instead of the $19 in current
regulation.

VII. Regulatory Impact Analysis

C. Estimated Impact of the Medicaid Premiums and Cost Sharing Provisions

1. Overall Impact

Based on our policy analysis, we do not anticipate significant costs or
savings from these proposed changes at the program level given the
targeted nature of the cost sharing. We believe these proposed policies
would encourage less costly care and decreased use of unnecessary
services, which may reduce state and federal costs for the specified
services.

2. Anticipated Effects

As states better understand their options for imposing premiums and cost
sharing, more states may take advantage of existing flexibilities, such
as cost sharing of up to 20 percent of the cost of the service, and the
option of allowing providers to deny services for unpaid cost sharing,
both of which are targeted to somewhat higher income beneficiaries.
Research has shown that higher-than-nominal cost sharing on very
low-income individuals can have an adverse impact on access to services
by discouraging or preventing such individuals from seeking needed care.
However, such impacts are not likely to result from the changes proposed
here as they are largely focused on services where there are more
appropriate and less costly alternatives. Increased cost sharing may
have a negative impact on providers, as uncollected cost sharing reduces
provider reimbursement, to the extent that the beneficiary cannot or
does not pay the cost sharing and services are nonetheless provided.
Under the DRA provisions and this proposed rule, however, states may
minimize this impact by allowing providers to deny services for failure
to pay the required cost sharing in certain circumstances.

https://www.federalregister.gov/articles/2013/01/22/2013-00659/medicaid-childrens-health-insurance-programs-and-exchanges-essential-health-benefits-in-alternative#h-186


Comment: Why do patients go on the Medicaid program? Because they're
dirt poor, that's why. To even bring up a discussion of premiums and
cost sharing on these down-and-out people represents the ultimate of
bureaucratic insensitivity.

Admittedly, there was some effort to target the cost sharing to
encourage more appropriate and less costly alternatives, but permitting
states to require up to five percent of family income for out-of-pocket
costs is truly unaffordable for most of these families.

This shows how much traction the make-them-shop-with-their-own-money
crowd has gained - the moral hazard freaks who are hazardous to our
health care morals. There are more effective and humane means of
controlling health care costs, single payer being the most obvious. We
do not need to erect financial barriers that can impair access to
beneficial services, for the poor or for anyone else.

Perhaps the most disturbing statement in this Proposed Rule is the
following: States may allow providers "to deny services for failure to
pay the required cost sharing in certain circumstances." Deny services
for failure to pay "nominal" cost sharing?! What does that say about
health care justice in America?