CMS Rejects California Copayment Request

February 7, 2012

The the Centers for Medicare & Medicaid Services (CMS) has rejected a proposal by California to require copayments from Medicaid patients.

The request to levy the copayments, which covered prescriptions, doctor visits and hospital visits, was in the form of a Medicaid waiver.  

In a letter rejecting the copayments, CMS acting administrator Marilyn Tavenner wrote that California had failed to demonstrate that requiring payments was supported by either law or policy. 

The state is expected to appeal the decision.

California had saved hundreds of millions of dollars last year by requiring copayments, and was counting on approval to save another $575 million this year. The state is facing a $9.2 billion shortfall for the coming fiscal year.

The rejection was the second recent blow to California's efforts to limit its budget deficit. Just last week, a federal judge struck down the state's proposed 10 percent reduction in provider payments by Medi-Cal, the state's Medicaid program.

The payment cuts, which had been approved by CMS and slated to save the state more than $600 million, were challenged by the California Medical Association and other providers.

Medi-Cal was proposing fees of $3 to $5 for prescription drugs and $5 for doctor visits. A trip to the emergency room would have incurred a $50 fee, and $100 per day for a hospital stay.

 Providers could have refused treatment to patients unable to come up with the copayments

Persons dually eligible for Medicaid and Medicare would have been exempt from the copayment requirement.

Tavenner indicated that while her agency was supportive of California's efforts toward cost-effective health care, the state had failed to meet several tests required under the Social Security Act.