CMS Shifts Gears Rapidly Following Reversal Of Prior Policy

Author:Ms Susan Feigin Harris
Profession:Vinson & Elkins L.L.P.

The Provider community recently won a battle fought quietly behind the scenes with CMS. On December 20, 2002, CMS issued a "Dear Medicaid Director" letter reversing a prior Bush administration policy interpretation which stated that Medicaid managed care enrollees who complied with the "prudent layperson" standard (established by the BBA 1997) would not be denied coverage for medical care that emanated from an emergency room visit, nor would providers be denied payment for such services. The "prudent layperson standard" is broadly defined in the BBA as an individual who possesses an average knowledge of health and medicine who reasonably expects that the absence of immediate attention will result in placing the health of the individual in serious jeopardy. The initial CMS policy reversal provided that if a state plan had set limitations for emergency room coverage, the managed care organization could use such limitations as a means to deny coverage for emergency room services provided in violation of the applicable state plan limitations (and presumably, providers would not receive payment if pre-authorizations were not obtained in the emergency room setting). Senator Chuck Grassley and other Democrats and Republicans raised objections this week at the request and outrage of many providers and were successful in obtaining a rescission of the policy shift. Vinson & Elkins is actively involved in representing providers dealing with Medicaid managed care organizations and such policy initiatives.

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