Proposed Rule Could Result in Higher Costs for Medicaid Enrollees

On Tuesday, the Obama administration published a proposed rule in the Federal Register that officials said was developed to simplify an expansive and potentially confusing array of standards restricting states' ability to set fees for Medicaid beneficiaries, the New York Times reports.

Officials added that the proposed rule also aims to encourage states to expand Medicaid under the Affordable Care Act.

However, the proposed rule would permit Medicaid programs to charge higher copayments and premiums on physicians' services, prescription drugs and certain types of hospital care, such as "nonemergency use" of emergency departments, the Times reports.

Some health policy experts and observers said questions remain about some of the proposed rule's objectives and its effects on Medicaid beneficiaries.

Barbara Tomar, director of federal affairs at the American College of Emergency Physicians, said the administration has not clearly defined the types of "nonemergency services" for which beneficiaries could be required to pay. Some patients might believe that they have a legitimate reason to seek emergency care, but the final diagnosis at the ED might not reflect that, she added. "This is just a way to reduce payments to physicians and hospitals," Tomar said.

Additionally, the proposed rule would allow hospitals to determine "on the basis of preliminary information" whether a person is eligible for Medicaid. States then would be required to provide immediate temporary coverage to the eligible individual.

Administration officials explained that the proposed rule is intended to address problems that could arise as the ACA is implemented. They noted that allowing hospitals to determine Medicaid eligibility would help address several issues the government has encountered in trying to determine eligibility standards.

For example, there is no source of comprehensive, reliable and up-to-date information on whether residents have employer-sponsored health insurance, which the government needs to determine if low- and middle-income individuals can obtain federal subsidies for private insurance. Individuals who already have affordable health coverage would not be eligible to receive the subsidies.

However, Leonardo Cuello -- a lawyer at the National Health Law Program who represents Medicaid beneficiaries -- noted, "Under the proposed rule, many people will be funneled into health insurance exchanges even though they have special needs that are better met in Medicaid," adding, "And if you asked the right questions, you would find out that they are eligible for Medicaid."

The public can comment on the proposed rule until Feb. 13 (Pear, New York Times, 1/22).