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2/12/2013 12:43:00 PM
Federal court shoots down Arizona plan on Medicaid co-pays

Howard Fischer
Capitol Media Services

PHOENIX -- A federal judge has again rebuffed efforts by the state to justify co-pays for medical care on some adults in Arizona's Medicaid program.

Judge David Campbell said there was no evidence that U.S. Health and Human Secretary Kathleen Sebelius, who approved the charges, actually considered evidence that the payment requirements can cause harm to patients who might forego otherwise needed care. The result, according to attorney Ellen Katz, whose public interest law firm sued, is that people wait until they are really sick and end up needing far more extensive -- and expensive -- treatment in hospital emergency rooms.

"Co-pays are a barrier to the receipt of health care,' Katz said.

And Campbell, in his ruling, said Katz had presented evidence that co-pays for prescriptions "cause low income beneficiaries to forego essential and effective medication, leading to higher incidences of serious medical conditions such as heart attacks and strokes.'

The ruling does not permanently preclude the payments. Instead, Campbell gave Sebelius 60 days to review the evidence and make a new decision.

But Katz, director of the William E. Morris Institute for Justice, said she hopes officials of the Arizona Health Care Cost Containment System, the state's Medicaid program, do not pursue the issue.

She pointed out that the state's permission to charge the higher fees is set to expire at the end of the year. That's when the federal Affordable Care Act kicks in and all those affected automatically become part of the full Medicaid program, without additional charges.

An AHCCCS spokeswoman said that decision is up to Health and Human Services. Federal officials did not immediately return calls seeking comment.

At the heart of the fight is an effort by the state several years ago to save money.

The federal government provides the majority of the funding for Medicaid patients. In exchange, the state agrees to cover certain groups, like families and children below the federal poverty level.

But there is no federal requirement to cover childless adults.

Arizona decided it would not enroll any new childless adults, though it would not kick off any of the approximately 220,000 already in the program. Close to just 84,000 remain.

The other half of the cost-savings measure involved a new charge of $4 per prescription of a generic drug and $10 for a brand name when a generic is available. The agency also sought to raise the cost of a visit to the doctor's office to $5, with a $35 charge for nonessential emergency-room care.

Generally speaking, Medicaid does not permit these kinds of co-pays. In fact, a different federal judge blocked similar co-pays when the state first tried to implement them a decade ago.

But this time the state got the federal government to approve it as a "demonstration project' to see if the charges are effective at saving money.

Campbell noted, though, that Katz submitted a declaration by Dr. Leighton Ku who said that co-pays already have been studied for years. Potentially more significant, the judge said that declaration had other evidence that Sebelius should have considered.

"The research reviewed by Dr. Ku showed, in part, that the imposition of copayments for preventative, primary care leads to low income beneficiaries seeking fewer essential medical services and relying more on emergency room care and hospitalizations,' Campbell wrote.

Katz said even small co-pays for prescriptions can hurt the poor, pointing out there is no cap on how much someone might have to pay.

"A lot of these folks have seven and eight medications,' she said.

"When they can't get their medication and have significant medical problems they end up using the emergency room, which is the most costly of care,' Katz continued, noting that hospitals cannot legally turn away people in life-threatening situations.

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