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Changes expected to place billions of dollars in hospital Medicaid payments at risk

By KEN LEISER

A Los Angeles family of four had Medi-Cal benefits only for a couple of months this year when the mother heard rumblings about the Department of Homeland Security's new "public charge" proposal that would subject green card applicants to tougher scrutiny based on their historical or expected use of certain public benefits.

The woman and her husband, both Mexican nationals, recently had been granted permanent residency status in the U.S, a step on the ladder to citizenship. (Their children were born in the U.S. and are U.S. citizens.) Jen Rodriguez, supervisor of community health for Providence Health & Services, Los Angeles, said the woman feared that the benefit — California's version of Medicaid — could count against their citizenship applications. Rather than take the risk, the mother terminated the family's coverage under Medi-Cal.

A new report titled "Medicaid Payments at Risk for Hospitals Under the Public Charge Proposed Rule," authored by the Washington, D.C.-based public policy consultancy Manatt Health, found that the changes to the public charge rule sought by the Department of Homeland Security would have a potentially harmful effect on the welfare of an estimated 13.2 million legal immigrants and their family members. Released on Nov. 16, the report was commissioned by CHA, the American Hospital Association, America's Essential Hospitals, the Children's Hospital Association, the Federation of American Hospitals and the Association of American Medical Colleges. The report can be found at chausa.org/immigration. Ministry members can draw on the report's findings in filing comments on the proposed rule change. The public comment period ends on Dec. 10.

Wide net
If adopted, the new rule would result in millions of immigrants and their family members forgoing health care coverage because of "concerns or confusion" about the consequences of participation on their immigration status, the report concluded.

Hospitals would see a drop in Medicaid and Children's Health Insurance Program payments followed by an increase in uncompensated care, according to the report. The effect of the trends would be most troublesome for hospitals in areas with large immigrant populations, including those in New York, Southern California and Texas.

The proposed modifications to the public charge rule published in the Federal Register in October would expand the criteria the federal government considers in determining whether immigrants applying for permanent residence status, sometimes called a green card, would rely too heavily on government assistance. If so, it could be grounds for denying the application. The possession of a green card enables a foreign national to work permanently in the U.S.

In addition, the proposed rule would affect people seeking a visa extension or green card holders who leave the country for more than six months. The Department of Homeland Security said its proposed rule would "help ensure that aliens who apply for admission to the United States, seek extension of stay or change of status, or apply for adjustment of status are self-sufficient, i.e., do not depend on public resources to meet their needs, but rather rely on their own capabilities and the resources of their family, sponsor or private organizations."

Under the current rules, an immigrant can be designated a public charge if he or she receives cash assistance from the government. The proposed rule changes would allow the U.S. government to consider other factors, including an immigrant's enrollment in Medicaid, the Supplemental Nutrition Assistance Program and certain forms of housing assistance.

Homeland Security also is seeking public comment on whether to include participation in the Children's Health Insurance Program in its assessment of an immigrant family's self-sufficiency. The study found that the proposed rule also will likely deter enrollment in CHIP, whether or not it is included in the public charge rule change.

Dropped health coverage
The Manatt report concludes that "by attaching significant negative consequences to accessing public benefits, including Medicaid, the rule would prompt many immigrants to either drop coverage or not apply for coverage for which they are eligible.

"Similarly, lawfully present immigrants in immigration categories not subject to public charge determinations as well as immigrants' citizen family members may also be deterred from accessing benefits," authors of the Manatt study wrote.

The federal government estimates roughly 324,000 people across the country would disenroll or forgo enrollment in Medicaid and CHIP each year.

Clay O'Dell, CHA's director of member advocacy, called that estimate "ridiculously low." O'Dell said Homeland Security hasn't "done the analysis that needs to be done in terms of how this rule is really going to affect legal immigrants' access to Medicaid. That's why we stepped in" to commission the report from Manatt.

Potential future legal challenges to the rule change likely would be based in part on the contention that the federal government did not consider the economic effects to hospitals, government agencies and other institutions.

Experts say the proposed rule is having a deterrent effect already as immigrants drop out of insurance and feeding benefit programs, or forgo applications. "Some would say it is immoral or mean-spirited and against a long tradition of welcoming immigrants from all over and providing refuge," O'Dell said of the proposed rule change.

Concentrated impact
The report estimated that the proposed rule would put at risk up to $17 billion in annual Medicaid and CHIP payments to hospitals, followed by an increase in uncompensated care.

"The effect of these trends could be particularly acute for hospitals in areas with high concentrations of immigrant populations," the report said. Uninsured immigrants and their family members could be expected to do without preventive and routine care, but some would still turn to hospitals for more acute care and inpatient procedures.

While the proposed rule would exempt Medicaid benefits to treat emergency medical conditions, families would need to apply for Medicaid to receive that coverage and "it is likely that many would refrain from doing so," according to the report.

The report breaks down by state the Medicaid and CHIP spending and hospital payments expected to be subject to the disruptive effect of the rule change. It also forecasts hospital payments at risk by metropolitan area. The report said actual loss in health care revenue will be a function of how many legal immigrants disenroll from health care coverage, or remain uninsured, the complexity of the proposed rule changes for program participants, and the "broad discretion" the rule vests in immigration officials in making public charge determinations.

"These factors suggest that the impact could be substantial," the report found, "putting individuals, health care providers, and the communities they serve at risk."

Scene in Southern California
As a community health supervisor for Providence Health & Services community health insurance program, Rodriguez heads a staff of seven who help with outreach and assist low-income people in enrolling in public benefits. The team operates largely in the South Bay area of Los Angeles County, an area extending from the San Pedro harbor area to Inglewood.

Within the last couple of months — whether because of the heated political rhetoric on immigration issues or the proposed change to the public charge rule, Rodriguez said, "we have been noticing ... declining enrollments" in Medi-Cal and CalFresh, a SNAP benefit program.

"It's just because they're scared," she said. "It's become a very big concern."

Providence St. Joseph Health is inviting the public to join its caregivers in speaking up for the health and well-being of legal immigrants by submitting a public comment.