Medicaid Model Action Plan for Chapters

Medicaid programs across the country have experienced exponential growth in costs in recent years.  In 1985, states spent about eight percent of their total budgets on Medicaid.  By 2004, that figure had jumped to 22 percent. Total Medicaid spending increased by more than 50 percent between 2000 and 2004.  Recognizing that such growth in spending is unsustainable, states have taken increasingly aggressive steps to rein in costs. Those steps have included traditional efforts to limit benefits, tighten eligibility requirements and reduce covered populations, as well as new strategies to radically alter the structure and operation of the Medicaid program.  Since Medicaid recipients often account for a large percentage of emergency department patients, changes to the Medicaid program can have a significant impact on emergency physician practices by further hindering patient access to primary care and increasing the Medicaid population's utilization of emergency departments.  Some recent proposals, including efforts to require a co-payment for "non-emergency" visits to the emergency department, have a direct impact on reimbursement for emergency care.  Other changes may not be targeted at emergency care, but the ripple effect of those changes will undoubtedly be felt in the emergency department. 

In this environment of significant alterations to Medicaid programs in virtually every state, it is imperative that policymakers understand the consequences that their actions may have on emergency care providers and patients.  For this reason, it is incumbent upon ACEP chapters to make themselves aware of proposed changes that are being considered in their states and to educate policymakers about how these changes may impact emergency medicine.  To assist chapters in that effort, the State Legislative/Regulatory Committee has developed this model action plan that describes some of the strategies and tactics chapters should consider in ensuring that their voice is heard when their state contemplates consequential changes to their Medicaid program. 

Step One: Staying Aware and Getting Involved

To be adequately prepared to intervene and impact changes to a state's Medicaid program, chapters should be equipped to identify and track emerging proposals, know the resources available to assist them in their advocacy efforts, and have an understanding of how they can become engaged in the process and effectively influence state government decisions.

Keeping Abreast of Proposed Changes in the Medicaid Program
Becoming aware of proposed changes as early as possible is critical to successfully affecting the outcome. Changes to the Medicaid program may originate in the legislative or regulatory arena.  Legislatively, chapters should monitor bills specifically focused on the Medicaid program, as well as state budget bills that often contain buried provisions with major implications for Medicaid.  On the regulatory front, chapters should monitor proposed regulations, often published in the state register, typically originating from the state office that manages the state's Medicaid program. 

Chapters that have lobbyists are obviously better positioned to engage in an effective monitoring program.  However, even chapters with fewer resources can stay on top of significant changes by working closely with their state medical society, tracking relevant news sources and, most significantly, developing relationships and maintaining communications with key policymakers in the legislative and regulatory arenas. 

Additionally, chapters should stay abreast of federal proposals impacting the Medicaid program and should monitor announcements coming from national ACEP regarding significant activities in Congress or at CMS.  

Resources Available to Assist Chapters in Engaging in Medicaid Policy Discussions
When the chapter detects a proposed change to the Medicaid program that may impact emergency medicine, it should consider identifying allies and sources of information that can assist in the effort. The chapter should consider communicating with the state medical society and other affected specialty societies (i.e. pediatrics, surgical subspecialties other specialties that share the EMTALA burden) to ensure awareness, coordinate efforts and develop mutually beneficial strategies and messages to effectively engage and educate policymakers. Other organizations, including the hospital association, other medical societies and advocacy organizations that represent the interests of patients or the impoverished may also be extremely helpful allies if they are informed of potential impacts on their constituencies.  The national ACEP state legislative and reimbursement offices/committees can also be helpful in providing meaningful data, talking points and other state experiences that can assist chapters in developing strategies and bolstering their messages.

Venues for Chapters to Influence Medicaid Policy Decisions
Legislative:  Perhaps the best way for chapters to ensure that the emergency medicine perspective is adequately considered and represented in legislative deliberations related to the Medicaid program is through the development of strong relationships with legislators, particularly legislative leaders, and chairs or members of key legislative committees. Identifying these legislators and taking the time to meet with them and maintain communications with them can be extraordinarily helpful when significant issues arise. The legislators will appreciate the expertise and insight that emergency physicians can provide.  Once pertinent legislation is introduced, efforts should be made by chapter members to contact their legislators, particularly those on committees to which the legislation is assigned. Contacts should be made with as many legislators as possible, particularly with the leadership of the legislature.  The ACEP State Legislative Office provides chapters with free access to an online "action alert" tool that will allow chapter members to quickly and easily send email messages to their legislators on issues of concern to emergency medicine.  Chapters can also seek opportunities to provide testimony at meetings of committees that are considering the legislation. 

Regulatory:  As with the legislative process, the best weapon that chapters can use in influencing the development of regulations is a pre-existing relationship with key contacts within the agency that oversees the Medicaid program.  These relationships help the agency understand the issues facing emergency care providers and help the chapter ensure that agencies are aware of the impact that their actions may have on access to emergency care.  Additionally, as regulations are proposed, chapters will have an opportunity to provide written comments and/or testimony at hearings held by the agency.  It is important to stay attuned to proposals coming from the agency and to understand the process that the agency will follow in accepting input before finalizing the regulatory change.

Judicial:  State Medicaid programs must comply with federal rules. There have been incidents where states have been taken to court for violating these rules.  While this situation is not common, it may be considered in cases where state laws appear to violate federal requirements.  In considering such action, chapters would be advised to first consult other specialty societies, their state medical society, business entities that may benefit from a favorable outcome and perhaps the state hospital association to determine the likelihood of prevailing in a legal action and to develop a coordinated strategy.  Litigation can be expensive and chapter resources are limited. Given the high cost of litigation, chapters interested in this approach should seek out allies to form a coalition to share expenses.

Step Two: Developing Key Messages to Educate Policymakers and Influence Policy Decisions

As mentioned above, the most effective strategy for chapters to influence policy decisions related to their state's Medicaid program is to develop and maintain ongoing dialogue with key contacts in the legislative and regulatory arenas.  The primary goal of these communications should be to educate policymakers on the direct and indirect impacts that changes to the Medicaid program can have on emergency care.  Chapters should try to develop state-specific messages to include in these discussions, but they may also utilize any of a number of key talking points that have universal application to Medicaid and its impact on emergency medicine.

Talking Points and Key Facts on Medicaid and Emergency Care

  • The negative impact of provider rate cuts has resulted in fewer providers accepting Medicaid patients and forcing more patients to seek care in the emergency department.
  • Reducing reimbursement rates to hospitals and physicians who provide emergency care in the emergency department jeopardizes the Medicaid patient population's access to emergency care when it is needed.
  • Tightening eligibility requirements to reduce the size of the Medicaid patient population forces more people into the ranks of the uninsured, impacting their access to care and resulting in increased uncompensated care that puts a significant strain on emergency departments, hospitals, and the state. For example, when Oregon eliminated the state's Medically Needy program, Medicaid patient volumes in state EDs dropped 20% while uninsured patient volumes increased 17%.  The cuts resulted in a reduction in undercompensated care but an increase in uncompensated care. ("Medicaid/SCHIP Cuts and Hospital Emergency Department Use" Health Affairs, 2006)
  • Imposition of cost-sharing requirements on Medicaid populations has been proven to increase uninsured populations.  Survey results in Oregon indicated that over two-thirds (67%) of poor adults who were disenrolled following premium increases and tightened premium payment policies became uninsured. A survey of the higher income disenrollees in Rhode Island showed that just over half (51%) became uninsured. In Utah, nearly two thirds (63%) of individuals disenrolled from the state's Primary Care Network Medicaid waiver program became uninsured. ("Increasing Premiums and Cost Sharing in Medicaid and SCHIP: Recent State Experiences," Kaiser Commission on Medicaid and the Uninsured, May 2005)
  • Following its Medicaid coverage losses, Oregon saw an increase in emergency room use by uninsured patients and increased pressure on clinics.  After Washington State attempted to transition a group of immigrant families from a state-funded Medicaid look-alike program to its state-funded Basic Health program that charges premiums and cost sharing, providers reported a substantial increase in demand for charity care, emergency department use and strains on clinic resources. ("Increasing Premiums and Cost Sharing in Medicaid and SCHIP: Recent State Experiences," Kaiser Commission on Medicaid and the Uninsured, May 2005)
  • Investing in increased access to primary care for Medicaid patients (for example, by expanding hospital clinics, outpatient clinics, or doctor office hours) would result in a more efficient utilization of health care dollars and help to decrease non-emergent use of the emergency department by Medicaid patients who have no other place to obtain primary care. This initial upfront investment may pay off in decreased overall costs in the long run. This concept would also promote more preventive care in the Medicaid population, leading to higher quality of care and lower costs to the health care system.
  • Providers of trauma care and emergency medical care, by federal law, must see every patient who presents at an emergency department, regardless of their insurance status or ability to pay.  Cutting reimbursement under the Medicaid program does not change the EMTALA requirement and simply exacerbates the serious problems related to uncompensated and undercompensated emergency care.
  • Unlike other physician specialties, emergency physicians are required by state and federal law to serve all patients and yet the Medicaid payment rates are grossly inequitable for emergency care and often fall well short of covering the per-patient costs for medical liability insurance, billing, overhead and other costs associated with providing care.
  • While the number of patient visits to emergency departments continues to grow, emergency physician compensation is declining.  More than half of all emergency services are uncompensated.
  • Emergency physicians bear the brunt of uncompensated care. According to the American Medical Association, individual emergency physicians average $138,300 annually in lost revenue for providing EMTALA-mandated care.  ("Physician Marketplace Report: The Impact of EMTALA on Physician Practices" June 2003)
  • In many cases a patient who comes to the emergency department would pay more for receiving a parking ticket outside the hospital than the physician will receive from Medicaid for caring for the patient. 
  • More than one-third of Medicaid/SCHIP patients report at least one emergency department visit in the past year, far more than the average of 20% of both uninsured and privately insured individuals.  ("Medicaid/SCHIP Cuts and Hospital Emergency Department Use" Health Affairs, 2006)

Talking Points On Medicaid Co-Payments for "Non-Emergency" Emergency Care

  • Federal law prohibits emergency care providers from demanding payment or denying services if a co-pay is not paid. Payment cannot even be requested prior to providing mandated emergency care.
  • Patients should not be deterred from seeking medical attention.  The inability to pay the co-pay may discourage patients from seeking needed emergency care, resulting in delays that can exacerbate the medical problem and increase treatment costs.
  • Emergency departments are not as expensive as perceived, particularly as it relates to the costs of providing nonurgent care, and states may not save as much as they believe by requiring a co-pay to discourage non-emergency use of emergency departments. A 1996 study by Robert M. Williams, MD, published in the New England Journal of Medicine found that the marginal cost of caring for a nonurgent patient in the emergency department was only $88. 
  • The CDC reports that less than 13% of emergency department visits are for non-urgent care.  (National Hospital Ambulatory Medical Care Survey: 2003 Emergency Department Summary, May 2005)
  • There is no simple way to determine whether the care provided is a non-emergency and there are substantial administrative costs and challenges in trying to do so.  The cost of collecting co-pays from Medicaid patients after they leave the emergency department is far greater than the amount recovered, leading most physicians/institutions to abandon the effort and absorb the loss.
  • Emergency physicians have first hand experience with significant problems related to requesting a co-pay. In Pennsylvania, for example, an emergency department receptionist was held at gunpoint while attempting to secure a co-pay.
  • Absorption of losses associated with collection of co-pays will exacerbate the uncompensated/ undercompensated care crisis facing emergency care providers.
  • All Medicaid managed care programs already require payment for care that meets the "prudent layperson" standard definition of an emergency - meaning that if a patient deems the visit to be an emergency (even if it turns out not to be a true emergency), then the Medicaid managed care program must cover the visit. 

Step Three:  Developing Strategies and Tactics to Effectively Advocate for Beneficial Medicaid Changes

Developing coalitions, working cooperatively with state officials, developing innovative strategies, taking advantage of opportunities and persevering in spite of obstacles are some of the proven strategies chapters have adopted when advocating for enhanced Medicaid reimbursement or working to stop potentially damaging Medicaid reform efforts.

Key Lessons from Other Chapter Successes
The New Jersey chapter led a coalition effort for two years that successfully resulted in a 303% increase in reimbursement rates for emergency physicians. The state previously ranked last in the nation in Medicaid reimbursement, and while the increase only brought it to 46th in the country, the long and difficult effort paid off for the chapter and its members.

Similarly, the Rhode Island chapter engaged in a multi-year effort to increase very low reimbursement rates for emergency services. Through ongoing work with state policymakers and allied organizations, the chapter was successful in convincing the legislature to increase rates.  The legislative decision came after 100 people were killed in a tragic nightclub fire.  The heroic efforts of emergency workers, including emergency physicians, were well publicized and some legislators stated that their decision to increase reimbursement rates was a way of expressing their appreciation for the work of emergency physicians.  But it would not have been possible without the previous legwork of the Rhode Island chapter. 

The Michigan chapter was instrumental in working with the state to develop a new two-tiered reimbursement model in which Medicaid payments were made based on the final disposition of the patient.  A single fixed payment was made for patients who were treated and released from the emergency department and a second, higher payment was made for patients who were admitted to the hospital.  The adoption of this plan coincided with an increase in overall reimbursement rates.  The new plan was designed to reduce administrative costs for the state and increase speed of payment, as well as reimbursement rates, to physicians.

Medicaid reimbursement rates in Maryland were below those of neighboring states and the national average.  The Maryland chapter engaged in advocacy efforts to increase those rates but, with state budgets suffering, the prospects for success were poor.  While tort reform efforts were also being debated in the legislature, an idea was floated that the state could help physicians pay for their liability premiums by increasing Medicaid rates.  The liability reform bill of 2005 included a provision to increase Medicaid reimbursement for high-risk specialties including emergency medicine.  In doing so, Maryland became the only state to leverage liability reform in this way.  The increased reimbursement (as well as a temporary liability premium subsidy program) was funded through the repeal of an exemption of a 2% premium tax on HMOs.  The reimbursement increase brought Medicaid rates up to the level of Medicare rates. 

In late 2005, Kentucky Medicaid officials unveiled a proposal to stop paying for non-emergency care provided in emergency departments.  Through the efforts of the Kentucky Chapter of ACEP, state officials were educated on the problems with this proposal, ultimately leading them to scrap the idea.  As a result of its efforts, the chapter is now working with the state to explore better ways to control Medicaid spending without negatively impacting emergency care.

Additional information on some of these successful chapter strategies, and more helpful resources, are available on the Medicaid page of the State Advocacy section on the ACEP website.

Working Cooperatively with the State to Assist in Medicaid Reform Efforts
As the Kentucky and Michigan examples illustrate, advocacy efforts that create a win-win situation for the state as well as physicians can be extremely effective. The current environment in which states are considering substantial Medicaid reforms in order to rein in costs, including specific efforts to reduce spending on emergency care, can certainly be a threat.  But it can also serve as an opportunity.  Many state policymakers don't want to adversely impact their constituents' access to quality emergency care and emergency physicians are in a unique position to help educate these officials and possibly lead them toward better solutions.  It may well be in the chapter's best interest to go beyond a purely defensive posture in opposing adverse changes and adopt a proactive strategy of offering to work with state officials to craft mutually acceptable and beneficial solutions.  This is particularly true if it appears that the political environment is unfavorable and the chapter's opposition to the proposed changes is likely to be dismissed.  In such cases, the chapter may want to consider developing and offering less adverse alternatives to help the state address its problem.  Possible alternatives may include ideas such as:

  • Participation in a Formulary
  • Following Clinical Guideline Pathways
  • Observation vs. Admission
  • Identifying and Utilizing Outpatient Treatment Options when Appropriate (i.e. intensive mental health therapy)

Step Four: Share Your Chapter's Experiences

To assist other chapters in developing strategies and tactics that effectively influence state policy decisions related to Medicaid, chapters are encouraged to share their advocacy experiences and successes with one another.  Chapters can gain valuable insight, and save time and effort, by reviewing successful examples and key lessons learned by other chapters that have engaged in similar efforts.

ACEP's State Legislative Office collects and disseminates information on chapter advocacy activities.  Chapters can share their experiences by contacting the State Legislative Office at 800-798-1822 ext. 3236.   

While proposed Medicaid changes will vary from state to state and an approach taken in one state may not be appropriate in another, chapters can still benefit greatly from the experiences of other chapters by seeing new ideas that are being implemented, successful strategies that have been employed, and pitfalls that should be avoided.

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