CMS rejects California Medicaid co-pays

Federal health officials on Feb. 6 denied a request by California to charge a variety of co-payments to most of its Medicaid enrollees.

The co-pays would have ranged from $3 for prescriptions filled at pharmacies to $100 for inpatient hospital stays. The state expected the co-pays to generate $600 billion beginning in October 2013, said Norman Williams, spokesman for the California Dept. of Health Care Services, the state's Medicaid agency.

But the state cannot implement the co-pays under a demonstration waiver, as it requested in December 2011, according to a letter from Centers for Medicare and Medicaid Services acting Administrator Marilyn Tavenner to California's Medicaid agency. The co-pays are neither temporary nor targeted at a specific population, both of which are requirements in federal Medicaid law.

California is examining its options, including administratively appealing the federal decision, Williams said.

California Medical Assn. President James T. Hay, MD, applauded CMS' decision. The co-pays would have unfairly burdened physicians, who are required by federal law and their own code of ethics to see patients in emergency departments regardless of their ability to pay, he said.

"These co-payments would for all intents and purposes be uncollectable and would have made it even harder for [Medicaid] patients to gain access to the care and medication they need," he said.

This is the second significant provision of the state's budget that recently has been declared incompatible with existing law. A U.S. district court on Jan. 31 issued an injunction against a 10% Medicaid physician fee cut that also was included in the state's budget.

Many states charge co-pays for services provided to parents in Medicaid, according to a 50-state survey released in January by the Kaiser Family Foundation. For example, parents in Medicaid are subject to co-pays for nonemergency visits to emergency departments in 17 states. However, all but two of these states charge less than $10.

Parents in Medicaid face similar small co-pays for nonpreventive physician visits in 23 states and for prescriptions in at least 39 states, according to the Kaiser report. Twenty-five states charge co-pays for inpatient hospital visits, ranging from 50 cents in Wisconsin to $220 in Utah.