As you know, VACEP and our allies have been working in both the political and legal worlds to remove a problematic Virginia budget item that is shortchanging, by $40 million, emergency physicians and hospitals that treat Medicaid patients. A similar policy is denying hospitals the full value of services for Medicaid readmissions. The emergency department policy is gutting funding to EDs and physicians by automatically “downcoding” nearly 800 emergency conditions for Medicaid patients — many of them common diagnoses. Reimbursement for these conditions is cut to only $15.45 if the diagnosis determined, after-the-fact, to be on the list of these “avoidable” codes.
In August, the Virginia Hospital & Healthcare Association (VHHA), joined by VACEP and the Medical Society of Virginia (MSV), filed a complaint against the Virginia Department of Medical Assistance Services (DMAS), which is charged with enforcing these budget items. Our complaint, filed in the federal U.S District Court for the Eastern District of Virginia, sought to declare the items invalid and unenforceable, and commanded DMAS to stop enforcing them.
The latest in the Court
Unfortunately, we received word Thursday (Oct. 7) that the Court dismissed the case. The Court’s decision did not get to the merits of the case or make a ruling on the policy itself; instead, the case was dismissed “without prejudice” based on jurisdictional grounds. “Without prejudice” means it is a temporary dismissal and plaintiffs are allowed to re-file, alter the claim, or bring the case to another court.
The basis for this decision? That VHHA, VACEP, and MSV have other remedies available to fix the issue, and do not have the legal standing under federal laws and regulations to direct DMAS to stop enforcing the policy, which was established by the General Assembly.
The Court further said a federal statute that requires state Medicaid plans to set payment amounts consistent “with efficiency, economy, and quality of care” offers no requirement that those payment amounts be reasonable. Further, the statute says, providers do not have individual rights to seek equitable relief.
All of the above stated differently: The Court interprets the law to mean that only the federal government has the right to determine if the DMAS policy is proper. And the only remedy if a state fails to comply is for the federal government to withhold Medicaid funding from the state.
The good
While the Court’s decision is disappointing, it is clear that our claims resonated and we have options to pursue. Judge Henry Hudson:
Recognized there will be a substantial reduction in Medicaid reimbursement income for many Virginia hospitals and health care providers.
Appreciated our concern that hospitals must continually provide adequate care, and that Medicaid enrollees tend to have less access to primary care and use emergency rooms at rates almost doubling privately insured patients.
Specifically stated in the ruling: “However, this Court has no authority to grant the relief requested no matter how compelling it may be. Such recourse lies in the hands of the General Assembly.”
Our position
Although we disagree with the Court’s decision, the more significant issue at the moment is that the Court offered no opinion on the actual merits of the case. The Court’s decision does not get to the legal merits of the validity of the DMAS ER Utilization policy. Instead, the Court merely rejected the case based on jurisdictional grounds, and did so without prejudice.
Next steps
We plan to continue to pursue remedies to these issues in other venues. The Court’s determination that it is lacks jurisdiction to hear this case does not diminish the fact that DMAS’ policy violates federal law and is contrary to the public interest of having high-quality emergency care available.
Last month during its Special Session, the Virginia General Assembly also did not remove the ER Utilization program budget item. The Governor will submit his budget on December 16, and more amendments will come in the regular session, which starts in early January. We will continue to fight on behalf of providers, hospitals, and the patients we serve.
In addition, DMAS finally submitted the required “state plan amendment” to the federal Centers for Medicare and Medicaid services on September 25. We asked CMS back in May to review that SPA against the relevant CMS policies we believe the law violate. CMS has 90 days from the date of submission to approve, amend or reject the state’s request for an amendment.
We appreciate the support of many members who have responded to our action alerts on the issue and written their representatives. We will keep you informed as we learn more.
