State, federal governments create provider safety net to pay for COVID-19 charity care

Faced with the greatest public health crisis in a century, state and federal governments have cobbled together new funding streams so healthcare providers can be paid for testing and treating uninsured COVID-19 patients. But there are still billions of dollars left on the table.

“There’s a patchwork of different things working together that is very confusing,” said MaryBeth Musumeci, associate director at the Kaiser Family Foundation’s program on Medicaid and the uninsured.

Healthcare providers in several states can get COVID-19 testing paid for through a new Medicaid pathway created in Congress’ second legislative relief package. States can opt in to the program, which provides 100% federal matching funds for states to pay for testing for some uninsured patients.

According to a Kaiser Family Foundation tracker, 21 states including California, Illinois, Louisiana, Washington, Connecticut, Utah and Texas have taken steps to adopt the new eligibility pathway.

Families USA Director of Medicaid Initiatives Joe Weissfeld said it was particularly interesting to see red states like Texas, Utah, Alabama and South Carolina avail themselves of the funding, as they have not expanded Medicaid under the Affordable Care Act.

The new Medicaid funds are available for uninsured individuals regardless of income, including legally present immigrants who don’t yet qualify for Medicaid and individuals with short-term, limited-duration insurance plans. Unauthorized immigrants aren’t eligible for the new pathway.

Though the Trump administration has pursued policy that discourages legally present immigrants from using federal benefits, U.S. Citizenship and Immigration Services said COVID-19 testing, treatment, or an eventual vaccine will not count against immigrants applying for permanent residency, even if the healthcare is paid for by Medicaid.

A dozen states have taken a further step to explicitly classify the coronavirus as a condition that will qualify low-income individuals for emergency Medicaid coverage regardless of immigration status.

Several of the states that elected to explicitly define COVID-19 as an emergency condition in Medicaid have been hard-hit by the disease, including New York, California, Washington, Michigan, Massachusetts and Connecticut.

Emergency Medicaid is normally used to pay providers for care for low-income patients with a sudden onset of a medical condition that could put their health in serious jeopardy, such as labor and delivery, organ failure and heart attack. The emergency reimbursement program is eligible for federal matching funding.

California took advantage of both the optional Medicaid testing pathway and made COVID-19 testing and treatment reimbursable under emergency Medicaid. California’s emergency Medicaid designation means that Medi-Cal will pay healthcare providers for medically necessary COVID-19 services for uninsured or some underinsured patients regardless of immigration status.

Anthony Wright, the executive director of consumer advocacy group California Health Access, said that the state is seeking further federal funds to help run the program, but is prepared to take on costs if necessary.

“By definition the number of people treated for COVID, even if it is horrible, is a defined universe, and this expanded population is a subset of that,” Wright said.

What sorts of services can be covered by emergency Medicaid depends on states’ individual declarations, Families USA’s Weissfeld said, and he noted that the emergency designations would qualify significantly more people in states that have adopted Medicaid expansions because income thresholds for the program will be higher.

“On the uncompensated care side of things, it’s an issue hospitals are going to deal with and increasingly have to deal with in non-expansion states,” Weissfeld said.

Providers in states that haven’t pursued new Medicaid options to allow payment for COVID-19 services for the uninsured can submit claims to the federal government. The program is administered through the Health Resources and Services Administration and allows providers to submit claims regardless of patients’ immigration status.

Federal law generally prohibits federal dollars from being used to pay for healthcare for unauthorized immigrants, but there’s an exception for testing and treatment of communicable diseases and emergency services.

The funding for federal COVID-19 testing and treatment reimbursement comes from different places. Congress explicitly earmarked $2 billion to reimburse healthcare providers for coronavirus testing costs for the uninsured.

Independently, HHS chose to use part of the $175 billion Provider Relief Fund lawmakers designated to pay providers for their lost revenue and expenses related to COVID-19 to pay for coronavirus treatment for the uninsured, including unauthorized immigrants. Hospitals and prominent Senate Democrats have protested the use of the provider grant funds for this purpose. HHS has refused to say how much money they are expecting to earmark for treatment costs.

The public health interest of ensuring accessible COVID-19 testing and treatment for the uninsured has trumped the polarized politics of providing healthcare for unauthorized immigrants.

Last June, President Donald Trump slammed Democratic presidential candidates for raising their hands in support of providing health coverage for unauthorized immigrants during a televised debate. Now, his administration is openly footing the bill for COVID-19 testing and treatment for unauthorized immigrants. But there is a substantial difference between provider reimbursement for COVID-19-related services and more comprehensive health coverage, consumer advocates noted.

A GOP House Energy & Commerce aide said the committee supports the Trump administration’s policy to reimburse healthcare providers’ costs for caring for vulnerable COVID-19 patients partially because of the disease’s sweeping impact on public health.

“The committee supports efforts to mitigate COVID-19 and provide support to front-line healthcare providers during this difficult time for our country,” the aide said.

With the variety of testing reimbursement options available, the utilization of the HRSA fund overall is fairly low. As of June 12, HRSA has approved payment for $23.6 million in reimbursement for testing — roughly 1% of available funds — and $130 million for treatment.

Several sources that work with providers said the Health Resources and Services Administration has been processing claims promptly, but slow distribution could be caused by coding issues and a lack of awareness about the program.
Some providers may be eligible to receive grant funds funneled through their states, and several local jurisdictions choose to use local funds to provide healthcare services to the uninsured.

All the different funding streams can be overwhelming to community-based healthcare providers serving vulnerable populations, said Shelby Gonzales, the director of immigration policy at the Center on Budget and Policy Priorities.

“As I talked to advocates across the country working to get individuals testing and treatment, it’s a big challenge to understand what the pathway is for any given community,” Gonzales said.

Reimbursement policies that are good for healthcare providers’ bottom lines are also beneficial for public health because testing and tracking COVID-19 infections in uninsured populations is key to limiting the disease’s spread. And if providers are getting paid, there’s less of a chance they will send low-income patients bills.

“Absolutely it’s great that we are making sure that providers have the ability to get reimbursed, so we can at least for a lot of people can take away the concern of finances because they are uninsured,” Gonzales said.


Tags: covid-19, pandemic

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