September 10, 2012

Leesa Allen, Chief of Staff
Department of Public Welfare
Office of Medical Assistance Programs
c/o Deputy Secretary’s Office
Attention: Regulations Coordinator
Room 515 Health and Welfare Building
Harrisburg, PA 17120

Re: Amendment to the Commonwealth’s Medicaid State Plan for Children with Disabilities

Dear Ms. Allen:

On behalf of The Hospital & Healthsystem Association of Pennsylvania (HAP), which represents approximately 250 member institutions, including 125 stand-alone hospitals and another 120 hospitals that comprise 32 health systems across the state, we appreciate this opportunity to comment on the Pennsylvania Department of Public Welfare’s (DPW) proposal to amend the Commonwealth’s Medicaid State Plan to apply copayments to services provided to certain Medical Assistance (MA) eligible children with disabilities.

HAP has concerns about the proposed policy, as we believe it places an undue burden on the hospital and provider community. Implementation of the proposed policy will be complicated, and could dissuade consumers from accessing services. Through this letter, HAP raises questions about the policy for clarification purposes, but also illustrates the reasons why DPW should refrain from implementing the changes that have been proposed.

HAP and its members are concerned that the copayments for inpatient services may be cost prohibitive for the MA consumers and ultimately result in a financial burden to hospitals. Hospitals have reported that currently they have difficulty collecting copayments from MA recipients who are required to pay them, so there is an expectation that this same challenge also will be an issue if copayments are instituted for children with disabilities. As a result, parents of children with disabilities may be hesitant to seek needed services for their children because they are unable to meet their financial liability. Unfortunately, if parents ensure that their children have access to the needed services, despite their inability to pay the copayments, this will result in bad debt to hospitals. This policy could in essence merely be a cost shifting to hospitals and providers who are responsible for collecting the copayments. When they are unsuccessful, the result will be downgraded payments for services rendered, and ultimately, hospital bad debt.

According to the Pennsylvania Bulletin, DPW will notify providers via the eligibility verification system (EVS) when copayments are not required because a 5 percent household cap already has been reached. Hospitals have concerns about DPW’s ability to provide this information in a timely fashion, because information in EVS is not always current. HAP questions whether DPW has the capacity to import claims data into EVS to provide accurate notification about when a family has reached the 5 percent household cap. In addition, calculation of the 5 percent household cap is particularly complicated, in that children with disabilities may receive services from multiple providers. Presumably, amounts would have to be aggregated for all services rendered to the child, and copayments received, not just billed.

HAP suggests that DPW test the system to ensure that it has the capacity to collect data regarding copayments paid on an individual family basis for the MA fee-for-service program and the HealthChoices program, to aggregate that data, calculate whether or not a family has reached a 5 percent cap, and share that information with the provider community via EVS accurately and in a timely fashion. Access to accurate and timely information about whether or not copayments apply is critical. Hospitals and providers do not want to be in a position of charging families who already are financially challenged for services rendered to their disabled children, and later discover that there is a credit balance on an account such that consumers have to be reimbursed their copayment amount.

This proposed change in reimbursement for hospitals and providers will require changes to the current work flow for staff who conduct patient registration and claims administration. The administrative burden associated with collecting copayments, especially for outpatient services, seems unnecessary. Front desk personnel do not normally check EVS, so this would be an added step.

In addition, reimbursement for some outpatient services is determined by time spent with a patient, coupled with the intensity of service, which would be unknown prior to the service being rendered. Although outpatient departments usually collect copayments when a patient checks in, for services that have a sliding scale copayment associated with them, this would not be possible because the exact amount of the charge may be unknown or undetermined. Hospitals and providers expect that the collection of copayments for services rendered to MA children with disabilities would have to be done through a billing mechanism HAP members report that, on average, it costs $5 to $10 to “drop” a bill. It is unreasonable and unnecessary for hospitals and outpatient departments to incur a cost of $5 to $10 to submit a bill for a copayment that may only be $1, or an amount less than $10 in most instances. If hospitals and providers must implement procedures to comply with the requirements to collect copayments from this population, the cost to deliver services will increase.

The bulletin failed to address a number of issues. Specifically, the bulletin was silent on how this new MA reimbursement policy would impact the HealthChoices program. It is HAP’s understanding that although the HealthChoices plans will not be mandated to implement copayments for children with disabilities, their capitations will be modified to incorporate the assumption that such a change was made. HAP has concerns that DPW is proposing to make a change in payment policy that could impact the HealthChoices plans, but has failed to provide any standards for the HealthChoices plans. Therefore, the HealthChoices plans could each implement the payment policy differently, which means there would be no consistency. This lack of consistency makes it extremely challenging for hospitals and providers to establish policies and procedures for compliance with the policy.

The following is a list of questions that, if answered by DPW, would assist the hospital and provider community in understanding how DPW expects the implementation of copayments for children with disabilities to work:

1. How will the MA copayments for children with disabilities be applied when a disabled child may have other insurance in addition to MA?
2. If the HealthChoices plans institute copayments for children with disabilities, will DPW track the copayments as outlined in the bulletin, or will the plans track copayments on their own? If the HealthChoices plans track copayments independently, what mechanism will be used to communicate to hospitals and providers when the total aggregate amount has exceeded 5 percent of the family’s annual gross income?
3. If there are multiple MA recipients in a household that are subject to the copayments, how will the “household cap” be determined and communicated to the hospital and to the provider community?

In summary, based on the issues and concerns identified in this comment letter, HAP opposes DPW’s proposal for the implementation of MA copayments for children with disabilities. We do not think that implementing this change would be the best cost-saving initiative for the MA program because it results in administrative and financial burdens to the hospital and provider community, and ultimately, could mean decreased access to services for children in need.

Thank you for the opportunity to provide these comments. If you have any questions about the above comments, please contact Pamela Clarke, vice president, health care finance and managed care, at (215) 575-3755; or Bob Greenwood, vice president, health care finance and insurance, at (717) 561-5358.

Sincerely,

PAULA A. BUSSARD
Senior Vice President, Policy and Regulatory Services