Uproar causes state to reassess Medicaid spend down requirement
The Missouri Department of Social Services seemed to slow down Wednesday on carrying out a policy that had been questioned by a federal agency and strongly criticized by Medicaid recipients, providers and advocates.
Last fall, the department announced that some staffers across the state had made errors over the years in the way they calculated spend downs required of some chronically ill and disabled residents on Medicaid. Spend downs are the amount of medical expenses an individual must pay to qualify for Medicaid. That amount is the difference between an individual's monthly income and the Medicaid eligibility limit: $772 last year. To correct the errors, the state said some Medicaid beneficiaries would now have larger spend down requirements — some as high as $500 a month — to continue qualifying for Medicaid.
Stunned, recipients and providers alike complained and wrote to the state agency, arguing that the new spend downs would be unfair. They also warned of potential confusion and the possibility of people going without services. This might include such services as treatment for kidney disease, which could lead to patients ending up in emergency rooms and incurring costly hospital stays.
In addition, the federal Department of Health and Human Services urged the state to delay the changes until the Centers for Medicare & Medicaid Services had a chance to review and "approve a comprehensive corrective action plan." Missouri replied that what was being proposed wasn't a new plan but an effort to bring state policy in line with federal law. Any delay in making the change, the state argued, "could amount to a violation of federal law."
The state's response has come in two phases. It initially reacted by announcing that it wouldn't implement the change until May to give residents time to make adjustments. But, apparently in response to the uproar, the state suddenly changed gears by announcing Wednesday that it would file a rule on the new spend down policy.
Public may weigh in
Beyond that action, state social service officials have refused to be interviewed. The only other comment came from Seth D. Bundy, director of communications for DSS. In an email, he explained the policy this way: "At the end of last year it was brought to our attention that over the course of many years, throughout the 114 counties and city of St. Louis, some staff, patients and providers were approaching this federal program a little differently. And because it is a federal program we need to make sure we are playing by the federal rules. It's understandable that there has been some confusion, but it's important to work together to solve the issue."
In theory, implementing the policy through a rule change rather than a memo, as was previously done, means that the public will have an opportunity to comment on the change. Still, some argue that the state's approach raises legal questions.
According to Joel Ferber, director of advocacy at Legal Services of Eastern Missouri, the Missouri Administrative Procedures Act requires a state agency to file a rule before changing "policy in a way that substantially affects the rights of individuals. Here, Medicaid recipients with severe disabilities are being adversely affected before the Department (of Social Services) goes through the rulemaking process."
Some who work on behalf of the disabled and chronically ill say the change would hurt some of Missouri's most vulnerable residents. In some instances, people unable to meet the spend down and get access to Medicaid might rely on emergency rooms where they cannot be turned down. Or the issue could indirectly push people into nursing homes where they could have access to medical services, such as dialysis.
But forcing people into nursing homes would violate the Supreme Court's Olmstead decision, warns Kirsten Dunham, director of policy and advocacy for Paraquad Inc.
In Olmstead, she says, "the justices ruled that unnecessary placement in nursing homes is discrimination" under the Americans with Disabilities Act. "It says that states should be providing services in the most integrated settings."
She adds that nursing home care is far more costly, running about $38,000 a year, compared to about $8,000 for community-based services.
"The state has an obligation to assure the independence, health and safety of Medicaid participants in the community."
Will others step forward?
Some argue that another drawback of the state's spend down plans is the apparent assumption that some other group will rescue those who might be hurt.
"The state is saying they are notifying patients in February and March to give them two months to find resources," says Leanne J. Peace, director of the Missouri Kidney Program. "But we are saying there are no other resources, nothing to turn these people to."
She speaks from several years of experience in working with kidney patients.
"Families and friends will step forward in the beginning, and maybe church members will help people with transportation. But that usually tapers off after a month or two. People start feeling like a burden because they can't keep asking families to take off work to take them to dialysis."
Under Missouri rules, people whose monthly incomes exceed $772 can meet the spend down requirement in one of two ways. They can make a payment to the state for the amount exceeding $772. Or they can incur hospital costs in an amount exceeding what's needed to meet their spend down requirement.
Critics also complain about how the new rule handles the spend down issue. Under the old rule, state workers would allow claimants to use the full amount of medical expenses they submitted to show that they have met their spend down requirement, even though the expenses might not all be eligible.
The new rule says state workers should break down the expenses and estimate what a claimant's insurance might pay. That, too, has drawbacks, critics say, because it might take weeks or months to find out. In the meantime, critics say, people can end up getting delayed Medicaid assistance or no assistance because of an inaccurate estimate.
The department hasn't responded directly to such concerns. But some of those with disabilities clearly think the department is creating as many problems as it is trying to solve. One who thinks so is Jean Trammell, 67, a resident of Salem, Mo. Hands twisted by rheumatoid arthritis requires her to rely on an assistant 4 1/2 hours a day, seven days a week. Trammell, a retired certified nurse assistant, is still reeling from the extra expenses she might have to bear because of changes in the rules.
"They tell me all I have to do is pay them $451 at the first of the month to cover my spend down. By the time I pay my life insurance, my utilities, getting to the doctor, I don't have much and everything keeps going up. I'm sorry, but I cannot pay $451 a month."
She dreads the possibility that she might end up in a nursing home.
"I think that's where they want to send all of us. I've worked since I was 18 and now I feel like they are punishing me for being a good worker. If I had been one of these loafers and had not worked, I wouldn't have this problem. They'd be handing (assistance) over to me for nothing."
Another recipient facing a spend down problem is Deborah McGee, 63, of University City. Like Trammell, she's worried what will happen when and if the state begins to implement the policy in May. McGee would have to spend down $482 each month to qualify for Medicaid. She gets dialysis treatment three times a week, and she wonders how she'd make it if the Kidney Foundation hadn't stepped in with financial assistance. At the same time, she knows this help is not unlimited or permanent. Asked whether her dilemma leads her to consider a nursing home, she says:
"I really don't want to think about it. And it hasn't come to that. My son and daughter-in-law have cars, but there are times when they aren't available because they have to be at work."
If the Kidney Foundation is unable to step in, she says her only other option would be to scrape up money from her monthly pension to cover her spend down.
"That would cut into money going into the house," she says, "but that may be my only alternative."