Hospitals battle Medicaid rule changes over undocumented immigrants

Florida hospitals are challenging a state rule that bans Medicaid reimbursements for some treatment of undocumented immigrants.

08/17/2012 5:00 AM

08/17/2012 9:05 PM

Hospitals throughout Florida are challenging a state rule that limits payments to treat undocumented immigrants.

The hospitals say the Agency for Health Care Administration made the rule without following the proper procedures and unfairly wants them to reimburse the state for some of the Medicaid payments used to treat immigrants who aren’t legally in the United States.

At issue is a technical dispute over how much Medicaid pays for emergency services and when an emergency patient turns into a “stable” patient still in need of care. AHCA’s position is that Medicaid covers emergency care for undocumented patients, but not the ongoing treatment needed to keep the patient stable.

The rule could save taxpayers "millions and millions of dollars," but it would burden large hospital systems that provide loads of charity care, said Joanne Erde, an attorney representing the hospitals.

"What the state is saying is: ‘We don’t care if the patient is in the hospital or not or if the services are medically necessary, we’re not going to pay for anything beyond the point of stabilization’ — whatever that is,” Erde said. “And they’re applying it retroactively, back to 2005, in order to get money back from the hospitals.”

Erde’s clients filed a challenge with the Division of Administrative Hearings on Wednesday. They’re not specifically challenging the rule affecting Medicaid reimbursements, but the fact that it was implemented without public hearings.

AHCA said it never changed its policies, but simply conducted an audit to enforce what was already on the books.

“Our policy has not changed,” said AHCA spokesperson Shelisha Coleman. “We did an audit that raised suspicion that the hospitals were treating illegal aliens for emergencies and continuing treatment after the emergency had stabilized.”

AHCA did not provide data on how much money would be saved from the audit.

AHCA launched the audit last year to look over the medical records of undocumented immigrants going back to 2005. The goal of the audit was to determine at which point the immigrant became “stabilized,” and deny any Medicaid reimbursement for care given after the stabilization point.

“There will be no reconsiderations process for this project. All determinations are final,” read a presentation given by a Medicaid review firm under contract with AHCA.

Hospitals say the state’s demand to return payments made years ago is particularly unfair because the payments were approved by a state-mandated third-party gatekeeper who performed preliminary reviews of hospital claims.

The case came as a surprise to the state’s largest provider of charity care, Miami’s Jackson Memorial, which isn’t listed as a plaintiff in the challenge.

About 8 percent of Jackson’s clients are likely undocumented, said Carlos Migoya, the head of Jackson. He said he was unaware of the challenge or the rule change.

Despite the potential hit to their wallets, the issue has been a sleeper in the hospital industry. Tony Carvalho, lead lobbyist for the Safety Net Alliance of Florida, said he hadn’t heard of the challenge. But, he said, South Florida hospitals are particularly on the hook for providing care for undocumented immigrants. Tampa Bay-area hospitals run a distant second, he said.

Several hospitals in immigrant-heavy areas—including St. Anthony’s Hospital in St. Petersburg, Hialeah Hospital and Palmetto General Hospital in Hialeah— joined the challenge.

Though the case was just filed, the rule has been years in the making. It was first proposed in the summer of 2010 under then-Gov. Charlie Crist, who was running for U.S. Senate at the time.

The federal government, however, also has a say. It makes the rules governing Medicaid, a massive federal-state program that pays health costs for the poor and uninsured. About 3.3 million people use some type of Medicaid service in Florida, where the program accounts for about $21.4 billion in spending.

A 2003 AHCA study showed that about 70 percent of illegal immigrants accessed Florida hospitals by going to the emergency room. The state is home to an estimated 825,000 undocumented immigrants.

Coleman said AHCA would fight back against the charges.

“We are reviewing it and we plan to respond,” she said.

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