On January 22, 2013, CMS published a proposed rule in the Federal Register that would allow states to increase cost-sharing for Medicaid beneficiaries.  Specifically, for individuals with incomes below 100% of the federal poverty level (FPL), the rule would increase nominal cost-sharing for outpatient services to a flat rate of $4.00.  The charge for outpatient services was previously based on a proportion of the cost of the service to the state, and ranged from $1.30 to $3.90.  CMS is seeking comment on an appropriate cost-sharing rate for inpatient services for this same group of individuals.

For non-exempt individuals with incomes between 100% and 150% of the FPL receiving non-exempt services, CMS would allow states to impose cost-sharing at a rate of up to 10% of the amount the state pays for the service, with differential cost-sharing levels for different groups of individuals.  CMS seeks comment on how the regulations should address the types of targeting that would be allowed.

CMS is also proposing specific regulations regarding cost-sharing for drugs and Emergency Department (ED) services.  States would be allowed to use differential cost-sharing for preferred and non-preferred drugs and to apply cost-sharing to individuals at all income levels.  States could establish a share of up to $8.00 for non-preferred drugs for individuals with incomes at or below 150% of the FPL or who are otherwise exempt from cost-sharing.  For individuals with family income greater than 150% of the FPL, states could impose cost-sharing of up to 20% of the cost to the state for non-preferred drugs.  CMS made similar proposals for non-emergency services provided in a hospital ED.  For individuals with incomes between 100% and 150% of the FPL, states could establish cost-sharing of up to $8.00 for non-emergency ED services.  For individuals above 150% of the FPL, there would be no limit to cost-sharing for non-emergency ED services.  CMS seeks comment on methods to differentiate between emergency and non-emergency services.

Comments on the proposed rule are due to CMS by February 13, 2013.  Providers should consider the potential impact of these rules on their finances, particularly on their bad debts, considering CMS’s recent reduction to bad debt reimbursement.  See 77 Fed. Reg.67450, 67518-19 (Nov. 9, 2012).

The proposed rule is available by clicking here.