Help finding law regarding Medicaid recipients and private pay?

February 24, 2023 5:36 PM

I have been told/seen some materials online mentioning that healthcare providers out of network for Medicaid cannot charge Medicaid recipients private pay (except for in certain states). However, I cannot find this specific policy in writing nor an outline of which states are the exception (or a government/Medicaid website). Can you help?

This article mentions the policy but I'd like to find something more official, not just a mention on a blog.

posted by bearette to Law & Government (7 answers total)

Response by poster: I'm mainly interested in this in the context of Medicaid recipients paying out of pocket for therapists who are not contracted to take Medicaid insurance.
posted by bearette at 5:40 PM on February 24, 2023

Good luck finding any sort of federal-level summary of Medicaid outside of law and CMS regulations- it's hard enough to find it at the state level and they're the ones who actually run things. I would suggest starting with a handful of states, find the one with the most written documentation, and see if you can work backwards to find their federal justification.
posted by ThePinkSuperhero at 6:18 PM on February 24, 2023

I think using the search term "assignment of benefits" might be useful here. I'm not finding anything on a cursory Googling, but suspect that this has to do with regulations (either state or federal) to the effect that a provider must not charge more than the allowable copay if they accept payment from Medicaid.

I'm not licensed to do independent psychotherapy so I'm not sure about all the ins and outs of how that works, but if someone wants to practice independently and only accept cash payment (not insurance), that's up to them as far as I know. People would then need to file the claim themselves with their insurance and the therapist isn't a party to that at all. They're just providing a bill for services rendered and who pays is up to the terms of the private insurance policy, or in the case of Medicare or Medicaid the regulations about what those entities will pay for in this situation.
posted by tivalasvegas at 7:49 PM on February 24, 2023 [1 favorite]

IANYL and this is definitely not legal advice.

Two of the federal authorities setting requirements for state plans around Medicaid acceptance and private pay are 42 U.S.C. § 1396a(a)(25)(C) and this regulation. (See the 8th Circuit case Robinett v. Shelby for a particularly narrow reading of these rules, although they're a floor, not a ceiling, even if this holding is correct or obtains in your state.)

Here's a table of various improper billing authorities by state provided by Justice in Aging, dated to 2017 (in the context of their work on "balance billing" of Medicare-Medicaid 'dual eligibles', although this table is specific to Medicaid itself). I don't think this is comprehensive but it's a good starting place for your own research perhaps.
posted by peppercorn at 8:36 PM on February 24, 2023

When I looked into this previously, in California it seemed like providers that accepted Medicaid (Medi-Cal here) could not work with a Medicaid client but not bill their Medicaid, and it was based on their contract with Medicaid/Medi-Cal. Their contract required them to agree that they would bill Medicaid for all services covered by Medicaid. My understanding was that this was to prevent providers from financially exploiting vulnerable people.

This frequently, however, got misinterpreted as there being a federal/state regulation that prevented private providers from seeing clients with Medicaid/Medi-Cal, as if the restriction was on the patient rather than on a contracted provider. The only restriction I could ever find was on contracted Medicaid/Medi-Cal providers, the requirement was that they bill Medicaid/Medi-Cal for services, and it was only a requirement if they were contracted with Medicaid/Medi-Cal.

It could totally be that California is one of those exceptions you mention, or that my research was not thorough enough. But it was striking to me how different the actual regulations were from the common interpretation of the rules.
posted by lapis at 9:30 PM on February 24, 2023

Best answer: Just some notes from poking around, don't actually know what I'm doing. I haven't found a relevant federal requirement beyond the USC and CFR citations that peppercorn shared. Seems it's up to each state to decide how exactly to interpret 42 CFR 447.15. There's an ancient (1999) federal Medicaid memo that says:

However, where a physician accepts an individual for treatment not as a Medicaid patient but as a private patient, and the Medicaid beneficiary accepts the arrangement as a condition of treatment through pregnancy and delivery, the arrangement is not governed by Medicaid program requirements.

Colorado regulations (page 28) (alternative link) include:

.9 A client may enter into an agreement with a third party or provider whereby the client agrees to be personally liable for payment of services not covered by the third party or Medicaid. This agreement must set forth the specific services provided by the third party or provider, the approximate cost of services provided and the method of payment by the client. The agreement must be signed and dated by both the client and the third party or provider in advance of the services being rendered. (See Section 26-4-403 (1)(III)(B).)

New York has a similar requirement, or at least it did in 2014:

A provider may charge a Medicaid beneficiary, including a Medicaid or FHPlus beneficiary enrolled in a managed care plan, only when both parties have agreed prior to the rendering of the service that the beneficiary is being seen as a private pay patient. This agreement must be mutual and voluntary. It is suggested that providers keep the beneficiary's signed consent to be seen as a private pay patient on file.

...Nor may any provider bill a beneficiary for services that are covered by the beneficiary's Medicaid managed care or FHPlus contract, unless there is prior agreement with the beneficiary that they are being seen as a private pay patient as described previously. The provider must inform the beneficiary that the services may be btained at no cost from a provider that participates in the beneficiary's managed care plan.

While California says:

Does a provider have to enroll in Medi-Cal to bill Medi-Cal? Yes. To bill Medi-Cal, a provider must complete the appropriate enrollment forms...If a provider chooses not to enroll, they may bill the patient. However, an enrolled Medi-Cal provider cannot bill a Medi-Cal-eligible patient for a covered service.

posted by dreamyshade at 10:10 PM on February 24, 2023 [1 favorite]

An important distinction is whether the service is covered or not covered by that particular state's Medicaid program.

So, if you're in a state where, say, dental fillings are a covered service under that state's Medicaid program but dental implants are not a covered service, you would typically have to go to an in-network dentist for that filling, but you as a Medicaid recipient would be able to private pay for an implant (not a covered service) out of pocket -- either with that dentist or any other dentist you want.

I'm somewhat familiar, though admittedly rusty, on other states but here's an example of a situation with payment for covered services here in Colorado. Our Medicaid program includes access to therapy/counseling as a covered service, so under Colorado law Medicaid patients are required to use a provider who is in network with the program when accessing therapy/counseling. And it's rough because we have the same issues we're seeing everywhere -- providers are hard to find, there are long waitlists. Providers are already scarce (a comprehensive provider network is the HARDEST part of putting together a Medicaid plan) and lots of providers don't want to work in network under Medicaid because they get reimbursed at a much lower rate than private pay.

And here's the specific relevant legal language from the Code of Colorado Regulations:

8.012.2.C. Providers are prohibited from collecting, or attempting to collect, payment from recipients
for Medicaid covered items or services regardless of whether Medicaid has actually reimbursed
the Provider and regardless of whether the Provider is enrolled in the Colorado medical
assistance program

posted by mochapickle at 11:11 AM on February 25, 2023