Kentucky enacts, then drops Medicaid copays in surprise reversal

Deborah Yetter | Courier Journal

Show Caption Hide Caption 5 things to know about changes to Medicaid co-pay What to to know about changes to Medicaid co-pay in Kentucky.

This story has been updated to report that Kentucky is suspending Medicaid copays.

For the second time in a week, officials with the administration of Gov. Matt Bevin have reversed themselves on a controversial change to the state's Medicaid program.

State Medicaid officials now say they will suspend patient copays of $1 to $50 abruptly enacted July 1. The copays caught health providers by surprise and caused alarm among patients who didn't know about or understand the changes.

The surprise decision to suspend the copays by Aug. 1 follows the decision of state Medicaid officials last week to restore dental and vision benefits the state abruptly cut July 1 to nearly 400,000 people. Those cuts caused an outcry among providers and patients — especially those in need of treatment for urgent dental problems including decay and abscesses.

Background: Bevin will reverse cuts to Medicaid dental, vision services, state says

News that the state plans to suspend Medicaid copays for services including prescription drugs, doctors' visits and hospital stays was greeted with surprise and relief among health care providers Friday.

"Hallelujah!" said Ramona Johnson, CEO of Bridgehaven, a mental health center in Louisville with clients affected by copays. "I'm glad they made that decision ... but it's difficult not knowing the rules and having the rules change so fast."

Bill Wagner, CEO of Family Health Centers in Louisville, said the suspension of copays, along with the state's decision to restore dental and vision benefits, is welcome news for those served by his network of community clinics.

"Once again, we're relieved to see that our patients will be relieved of a burden of copays and have vision and dental benefits," he said. "There has been a lot of confusion about all the changes."

The news came late Thursday in a brief email from Jill Hunter, the state's acting Medicaid commissioner, to officials with the five managed care organizations that operate most of Kentucky's Medicaid program under contract to the state.

Hunter's email said the state had learned of "inconsistent" application of copays and therefore was temporarily suspending the requirement, according to a copy of the email obtained by the Courier Journal. The email does not provide further detail other than to say the state "will provide further instruction as more information becomes available."

The email asks managed care officials to notify individual providers, such as doctors, dentists, pharmacists and others, that the copays will be suspended.

Johnson said Friday that Bridgehaven had not yet been notified. She also said she fully expects the state to reinstate the copays at some point.

A spokesman for Passport, the Louisville-based managed care company that serves about 320,000 Medicaid enrollees statewide, said it is working to eliminate the copays by Aug. 1, acting under "guidance" it received this week from the state.

Doug Hogan, a spokesman for the Cabinet for Health and Family Services, which oversees Medicaid, said in a statement late Friday the agency "will revisit how best to implement co-pays in the near future."

Adam Meier, cabinet secretary, speaking at a legislative committee meeting July 18, said his agency was "still clarifying" some aspects of the copays but did not suggest his agency might suspend them.

Health care providers said the copays triggered confusion among patients, some afraid they wouldn't be able to afford items such as essential medication for diabetes and asthma.

The copays "seemed to have been slipped in under the cover of darkness," Wagner said, and the state enacted them with no guidance to providers supposed to collect the copays.

At the University of Louisville medical school, Dr. Barbara Casper, an internist, worried that state officials didn't consider the impact of copays on the very poor patients she treats in an outpatient clinic, many of them seriously ill.

"Some of our patients can't even pay $1," said Casper, who credits Kentucky's 2014 expansion of Medicaid under the Affordable Care Act for providing health coverage for many of the low-income patients U of L sees at its clinics.

"This was a problem before we had the Medicaid expansion," she said. "We had a $2 copay for our patients to be seen and some of them couldn’t even come up with that."

The clinic does not turn away patients who can't pay, she said.

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While small copays have long been allowed by Medicaid, Kentucky hasn't required them for most people in recent years. The sudden announcement that copays were mandatory July 1 caught many health providers and advocates off guard.

"Complete confusion," said Sheila Schuster, a longtime mental health advocate.

Health providers say they weren't sure who had to pay, who was exempt, how to collect the copays and what to do when patients couldn't pay.

For example, pregnant women and children generally have been exempt from such requirements. But several health providers said it appeared that children covered through Children's Health Insurance Program, a Medicaid program for children of low-income working parents, were expected to pay copays.

Of the more than 600,000 Kentucky children covered by Medicaid, about 90,000 children are covered by CHIP.

Some health providers reassured patients they would still get care if they couldn't pay, including clients at Bridgehaven, a day program in Louisville for people with serious, disabling mental illnesses.

"I worry about it causing them additional stress and anxiety when they're already trying to cope with mental illness and trying to live on an extremely limited income," Johnson said.

The copays were enacted in the midst of upheaval in the Kentucky Medicaid program.

The state launched the copays on the same day it had planned to launch Gov. Matt Bevin's sweeping plan to overhaul Medicaid, adding work requirements, premiums and other new rules aimed at "able-bodied" adults.

But a federal judge struck down the plan June 29, forcing the state to abruptly halt the changes that could affect nearly half a million Kentuckians.

Meanwhile, in a separate move effective July 1, the Bevin administration abruptly announced it had eliminated basic dental and vision coverage.

The administration quickly backtracked and on July 19 said it was rescinding the cuts to dental and vision benefits.

But the copays remained in place, leaving bewildered health providers trying to figure out with little guidance how to apply them. If the patient can't pay, it comes out of the Medicaid reimbursement and the provider takes the loss.

"It could become a big issue for providers that operate with a very slim margin," Johnson said.

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She said that includes Bridgehaven, whose clients typically visit the center three times a week and may receive three or more services per day, such as a visit with a therapist, a support group and a peer counseling session.

The state required providers to charge $3 per office visit for a service, so that means clients could end up owing $9 a day, Johnson said.

"Three times a day, three times a week, that's $27 a week," Johnson said.

In addition, Bridgehaven clients would have to pay $3 for visits to a primary care physician or psychiatrist and copays for medication of up to $8 per prescription — medication she said is essential for people with mental illness to remain stable.

"Of course they don't have that kind of money," she said. "They struggle to pay their rent, their utilities, buy their groceries."

Johnson said Bridgehaven calculated it could lose up to $100,000 a year from an already tight budget by not collecting copays.

She's also worried copays, if reinstated, will discourage people from seeking treatment.

And in the mental health area, if people don't get regular services, they may wind up homeless, in jail or in far more costly psychiatric hospitals — at state expense, according to mental health advocates.

Casper, the U of L physician, said that holds true for patients with serious conditions including diabetes, high blood pressure, congestive heart failure, asthma and emphysema.

She worries patients will wind up in the emergency room or hospital if they skip office visits or cut back on medication because they can't afford a copay. Copays for Medicaid range from $1 for generics to $4 or $8 for some name-brand drugs.

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And while physicians try to prescribe generic drugs, some medications — such as insulin for diabetes and inhalers for asthma or other breathing disorders —are available only as name-brand drugs, she said.

"It's not uncommon for some of our patients to be on 10 different medications," Casper said. "They're going to be back in the circumstances they were in previously. Do they eat, pay rent, their electric bill, take care of children or get their medicine?"

Casper said the copays were especially frustrating because they came as patients now receiving regular care through Medicaid are beginning to make important changes in their lifestyles, losing weight, monitoring blood pressure and getting treatment for chronic illnesses.

"It kind of breaks my heart," she said. "I've seen a lot more engagement in their health care by our patients. They're doing all we want them to to stay healthy."

Health providers said it was hard to explain the changes to patients.

"There's no rhyme or reason as to how copays are coming through," said Michael Lin, pharmacy director for Family Health Centers. "They're so inconsistent."

At the Family Health Centers pharmacy in Portland, patients worried about whether they could afford the new Medicaid copays.

"They worry about what's going to happen if they don't have the money," Lin said.

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Lin and Wagner said the Family Health Centers wouldn't turn away people who can't pay, because as a federally recognized "safety net" health service, their agency is able to get other money to try to defray the costs.

But they said health care providers in private practice don't have the ability to sustain losses from patients who can't pay the copay if the state reinstates them.

Johnson said that's true at Bridgehaven as well.

"We don't want people stop receiving services because they can't afford the copay," she said. "Some providers will be better able to absorb that than others."

Deborah Yetter: 502-582-4228; dyetter@courierjournal.com; Twitter: @d_yetter. Support strong local journalism by subscribing today: courier-journal.com/deborahy.

Medicaid copays

Here are some of the new copays some people covered by Medicaid were being charged.

► Office visits for physician, dentist, vision care, behavioral health or other health provider: $3

► Prescription drugs: $1 for generic drugs, $4 to $8 for name-brand medication.

► Outpatient hospital service: $4

► Emergency room visit for non-emergency: $8

► Hospital admission: $50

► Durable medical equipment: $4

► Laboratory or X-ray services: $3

► Physical, speech or occupational therapy: $3

► Chiropractor: $3

► Podiatrist: $3

Source: Kentucky Cabinet for Health and Family Services