State suspends July 1 order that required Medicaid patients in managed care to make co-payments for treatment

Kentucky Medicaid officials have suspended collection of co-payments by patients in managed care, a change they had ordered at the start of July. “The co-pays caught health providers by surprise and caused alarm among patients who didn’t know about or understand the changes,” reports Deborah Yetter of the Courier Journal.

The Cabinet for Health and Family Services said on its Facebook page, “The only recent change to co-payments was removing the ability for managed-care organizations to waive co-pays,” which the MCOs have typically done. “It has come to our attention that there has been inconsistent implementation of co-pays among MCOs. This has highlighted a need to suspend mandatory collection of co-pays.”

The initial change was part of Gov. Matt Bevin’s new Medicaid plan, which a federal judge blocked on June 29. It would have established small monthly premiums for people above the federal poverty level (about $16,000 for a single person) and co-payments for those with lower incomes.

“The judge’s order “removed the premium category, which caused all members to fall into a co-pay plan, and not all MCOs were prepared to implement this change in the same manner,” the cabinet said. “Thursday, we notified the MCOs that we were suspending enforcement of co-payments, and as of Friday we are withdrawing the regulation requiring mandatory collection of co-payments. We will revisit how best to implement co-pays in the near future.”

Yetter reports, “The sudden announcement that co-pays were mandatory July 1 caught many health providers and advocates off guard. . . . Health providers say they weren’t sure who had to pay, who was exempt, how to collect the co-pays 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 the Children’s Health Insurance Program … for children of low-income working parents, were expected to pay co-pays.”

Health-care providers generally treat patients who say they can’t make a co-payment, but in such cases, the payment comes out of the provider’s Medicaid reimbursement, Yetter notes. “It could become a big issue for providers that operate with a very slim margin,” Ramona Johnson, CEO of Bridgehaven, a Louisville mental-health center, told Yetter.

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

Johnson told Yetter, “They don’t have that kind of money. They struggle to pay their rent, their utilities, buy their groceries.”