Washington state to restrict emergency Medicaid payments

Initially blocked in court, the state Medicaid agency will deny payment for more than 500 conditions if treated in emergency departments instead of physician offices.

By Doug Trapp — Posted Feb. 20, 2012

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A lawsuit and months of negotiations have failed to resolve a dispute in Washington state over the scope of medical care the state has deemed inappropriate for emergency departments to provide to Washington Medicaid patients.

On April 1, the state's Medicaid agency intends to begin denying Medicaid payment for services to treat more than 500 illnesses and conditions if they are treated in EDs, including pregnancy screenings, first-degree burns, chronic tonsillitis and sunburns, as well as treatment for certain sprains, strains and other injuries. The state would continue to pay for the services if they are provided in primary care clinics instead of EDs. The Medicaid officials are fulfilling a mandate by the Washington Legislature to reduce unnecessary ED care for Medicaid enrollees.

The new proposal is an expansion of the state's initial plan to limit nonemergency care provided in EDs. That proposal, originally scheduled to begin on Oct. 1, 2011, would have permitted Medicaid enrollees three ED visits in a year for the restricted services before denying payment. However, the state sought to limit payment for approximately 200 more codes in its original proposal, including those corresponding to chest and abdominal pains, than in its newer one.

Eliminating payment for nonemergency care received in EDs is the best way to change physician and hospital behavior, said Jeff Thompson, MD, MPH, chief medical officer for the Washington State Health Care Authority, the state's Medicaid agency.

"If we pay for it, there's really not an incentive to do anything about it," Dr. Thompson said. The state, for example, has been billed at least a few hundred times a year for pregnancy screenings administered in EDs, he said.

But the Washington chapter of the American College of Emergency Physicians is disappointed that the state continues to pursue a policy that could deny care to patients with potential emergencies, said Nathan Schlicher, MD, Washington ACEP's legislative chair.

Although the state removed many of the most objectionable codes from the ED nonpayment list that was scheduled to start Oct. 1, 2011, it has proposed removing exceptions to the limits for patients who arrive by ambulance or from skilled nursing facilities, among others, Dr. Schlicher said.

First try blocked

The state's first attempt at restricting ED payment was blocked by a court ruling in December 2011. A Washington state judge concluded that the state did not go through the formal rule-making process required to implement such a proposal.

The state was advised by the federal Centers for Medicare & Medicaid Services that it should not implement a three-visit limit because of CMS concerns that it would put patients at risk, Dr. Thompson said. However, the federal agency also said the state would not need to go through a formal rule-making if it sought to restrict Medicaid payment based on the service location, he added.

Washington ACEP, with support from the Washington State Medical Assn. and the Washington State Hospital Assn., proposed an alternative plan in February to reduce unnecessary ED use by Medicaid patients.

The physician organizations had agreed to allow the state to deny some Medicaid claims retroactively for approximately 200 diagnoses, despite the fact that such retroactive denials typically cannot occur because they violate program statute, Dr. Schlicher said. But Washington State Health Care Authority Director Doug Porter said in a Feb. 1 letter that using the Washington ACEP list as the basis for denials won't allow the state to implement its desired ED limits quickly enough.

"Even giving them something that was illegal wasn't good enough," Dr. Schlicher said of the back-pay offer.

Dr. Thompson said physicians might have improperly coded some of the nonemergency services that they said they provided in EDs. But the state maintains that under no circumstances should it pay for Medicaid enrollee care that could be provided instead in a primary care clinic.

The denials will include restricted payment for nonemergency services even if they are provided to patients who also sought ED treatment for medical emergencies during the same visits. Dr. Thompson said that because of time and cost considerations, the ED is never the appropriate place to provide nonemergency care, no matter a patient's other conditions.

Stephen Anderson, MD, the Washington ACEP president, wrote in a Feb. 7 letter to Porter that physicians will not stand for such barriers to care access.

Washington ACEP "is very disappointed by the failure to collaborate, failure to accept patient safeguards and refusal to heed the expertise of emergency physicians in the field," he wrote.

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2 disparate plans for controlling emergency care

Physician organizations and Medicaid administrators in Washington state have reached an impasse on how to reduce unnecessary Medicaid patient visits to emergency departments. The state intends to deny payment for nonemergency Medicaid care provided at EDs starting April 1, but Washington emergency physicians and other state medical groups in February proposed what they consider a less drastic alternative.

State Medicaid agency proposal

  • Deny Medicaid payment for more than 500 nonemergency conditions, including many sprains and strains, for all Medicaid patients at EDs. This care will be paid for if provided instead in primary care physician offices.
  • Allow Medicaid managed care plans to pay for screenings, but deny Medicaid fee-for-service payments for the same screenings if they are deemed not medically necessary.
  • Continue to educate Medicaid enrollees on appropriate ED use.
  • Reduce federal and state Medicaid spending by an estimated $31 million in its first year.

Washington physicians' proposal

  • Implement a real-time data feed to track ED visits and notify primary care physicians of each such visit by their patients. Patients would be notified after each unnecessary ED visit.
  • Adopt statewide opioid prescribing guidelines for emergency physicians.
  • Implement a statewide prescription-monitoring program and emphasize prescribing of generic drugs.
  • Reduce federal and state Medicaid spending by an estimated $40 million annually.

Sources: Washington Chapter of the American College of Emergency Physicians, Washington Health Care Authority

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