Lawsuit directs federal Court to command Department of Medical Assistance Services to end program that threatens care of most vulnerable populations
Last week, Virginia organizations representing emergency physicians, multi-specialty physicians, hospitals and health systems filed a complaint against the Virginia Department of Medical Assistance Services (DMAS). The complaint filed in the U.S District Court for the Eastern District of Virginia in Richmond by the Virginia Hospital & Healthcare Association (VHHA), the Virginia College of Emergency Physicians (VACEP) and the Medical Society of Virginia (MSV), alleges as follows:
New budget items in Virginia are shortchanging by $55 million hospitals and physicians who treat Medicaid patients. These items are gutting funding to emergency departments and hospitals by automatically downcoding nearly 800 emergency conditions for Medicaid patients — many of them common diagnoses.
Budget Item 313.AAAAA (the Downcoding Provision) directs DMAS to automatically cut Medicaid reimbursements to hospitals for emergency-department visits that are on a list of 789 “preventable” codes, based solely upon the patient’s final diagnosis. DMAS estimates this change will lower Medicaid payments to Virginia hospitals and physicians by more than $40 million per year.
Budget Item 313.BBBBB (the Readmission Provision) similarly denies hospitals the full value of the services they have provided. It requires DMAS to pay hospitals just half of the customary reimbursement amount for claims for Medicaid patients who are readmitted to the hospital within 30 days of a prior discharge when readmission is deemed after the fact to have been “potentially preventable.” By DMAS’s own estimate, this change will lower Medicaid payments to Virginia hospitals by nearly $15 million per year.
The federal Takings Clause forbids these Budget Items, as Virginia is singling out particular parties — physicians, hospitals, and health systems — to bear the economic burden that ought to be borne by the public as a whole. “The problems of preventable emergency department visits and repeated hospital readmissions among the Medicaid population are well recognized and have numerous and complex causes. The primary causes—limited access to primary care and social services among underserved populations—have economic, social, and political dimensions and are not within hospitals’ or physicians’ control,” the suit states.
The complaint seeks to declare the Budget Items invalid and unenforceable and commands DMAS to stop enforcing them.
These Budget Items will cause irreparable harm not only to needy patient populations, but also to hospitals and physician practices themselves, which are already struggling with increased costs and decreased revenue due to the challenges of the COVID-19 pandemic. The Commonwealth’s taking of earned revenue will impair providers’ ability to deliver care to patients, at a time when the public is counting on hospitals and doctors more than ever.
“Virginia’s policy is a misguided attempt to reduce emergency department overutilization and negatively impacts patients, health equity, and the healthcare safety net. While high rates of emergency department use and hospital readmission among Medicaid beneficiaries are problems worth addressing, penalizing hospitals and physicians that treat society’s most vulnerable patients is not the way to accomplish these goals. This is an issue that rightfully should be fixed by the public as a whole, through system-wide health care and social services reform.”
— Scott Hickey, MD, FACEP, President of the Virginia College of Emergency Physicians
Read the joint letter sent to Governor Northam by VHHA, MSV and VACEP regarding the Downcoding Provision.
HERE’S HOW THIS ISSUE:
…Impacts physicians:
Emergency departments, by federal law (EMTALA, or the Emergency Medical Treatment and Labor Act), must treat all patients regardless of insurance status ability to pay. Emergency physicians also believe in this decades old law’s moral principle: All people deserve care.
Virginia's actions will cripple emergency physicians', staff, and hospitals’ ability to provide quality access to care — both during the current COVID-19 crisis and long after. This issue is also exacerbated by louder calls for greater social justice and racial equality in healthcare.
…Impacts patients:
Patients should never be put in a position where they are expected to self-diagnose and determine whether an emergency condition exists before being seen by a medical professional. This is called the “prudent layperson” standard and it requires care to be provided if the patient believes they are having an emergency. We believe that the law and CMS guidance obligates state Medicaid programs and managed care organizations (MCOs) to reimburse doctors and hospitals for the delivery of such emergency medical care based on presenting symptoms, not using a diagnosis list.
…Impacts health equity:
While Medicaid patients will continue to receive care and will never be billed for the difference if the visit is determined to be non-emergent, patients will be impacted because:
Such dramatically reduced payments will result in fewer physicians in the ER and much longer wait times, specifically in urban and rural hospitals, which have a higher percentage of Medicaid patients.
The financial viability of these emergency departments and medical centers is already threatened due to losses from COVID-19 where, during lockdowns, volumes declined as much as 40% due to both a lack of vehicle traffic and patients delaying care and avoiding emergency rooms.
Underrepresented minorities have always lacked access to healthcare and suffered the worst outcomes in the U.S. This problem was made worse in COVID-19 pandemic. Data from Johns Hopkins University shows that blacks are three times more likely to contract the novel coronavirus and six times more likely to die from it than any other racial group. Emergency physicians are the healthcare safety net when Medicaid recipients do not have adequate access to primary care and public health. These minority groups would be disproportionately impacted and suffer disproportionately when critical-access hospitals lose Medicaid funding essential to their survival.
Minorities in the U.S. disproportionately have higher rates of co-morbidities that increase risk factors for COVID-19 (obesity, lung disease, diabetes, hypertension, and other immune-compromising diseases). Many of those conditions are on the “preventable” diagnosis list.
Emergency physicians are dedicated to our national mission to promote and strive toward health equity within the communities we serve. Allowing such an unfair policy to go into effect in Virginia would be a significant step backward towards racial equality and social equity.
…Impacts hospitals and health systems:
Medicaid reimbursements would be automatically cut to only $14.98 if an ER visit is on the list of “preventable” codes. Such a low reimbursement makes full staffing of a hospital emergency department very precarious, especially in urban and rural areas who typically have high Medicaid populations. The Readmission Provision similarly denies hospitals the full value of the services they have provided and requires DMAS to pay hospitals just half of the customary reimbursement amount for claims for Medicaid patients who are readmitted to the hospital within 30 days of a prior discharge when readmission is deemed after the fact to have been “potentially preventable.” By DMAS’s own estimate, this change will lower Medicaid payments to Virginia hospitals by nearly $15 million per year.
