Office of Kentucky Legal Services Programs

Summary of Comments on Proposed

KyHealth Choices Regulation

907 KAR 1:604

Recipient Cost Sharing

Top concerns

  • 5% coinsurance on non-emergency services
  • 5% coinsurance on high cost drugs
  • Pharmacists’ ability to say “can’t pay? go away!” to people under poverty

High out-of-pocket costs for some non-emergency services and prescriptions are among several concerns raised in detailed comments by the Office of Kentucky Legal Services Programs (OKLSP) on proposed cost-sharing regulations for KyHealth Choices.

OKLSP also questions whether the Deficit Reduction Act (DRA) allows providers to refuse service when people below the poverty line can’t pay co-payments up front. The proposed regulations appear to allow pharmacists to tell them “Can’t pay? Go away.”

The comments nevertheless give the Cabinet credit for making “improving the health status of those Kentuckians enrolled in the program” a top goal.

Summary of Comments

On August 1, 2006, the Cabinet for Health and Family Services published a comprehensive set of emergency regulations to implement its Medicaid transformation initiative called KyHealth Choices.

The following paragraphs summarize our concerns and arguments on the proposed cost-sharing regulation:

Issue 1: “Enforceability” of copayments, or “if you can’t pay, go away”

This year’s federal Deficit Reduction Act (DRA) gave states an option to allow providers to refuse service when Medicaid recipients don’t pay cost-sharing charges up front — but only for people above the poverty line. The option to say “if you can’t pay, go away” is called “enforceability.” Key points:

  • State law and this year’s state budget bill limit enforceability to pharmacists
  • The budget bill says pharmacists must make available a 72 hour emergency supply
  • The DRA further limits “enforceability” to people with income above the poverty line

Issue 2: 5% coinsurance for non-emergency services in the ER

The Cabinet’s proposed regulations allow “coinsurance” of 5% for non-emergency services in the emergency room for adults and KCHIP children as a deterrent for ER use in non-emergencies. Key points:

  • 5% “nominal” coinsurance would be high for some non-emergency services
  • the DRA and old Medicaid law require availability of other sources of care
  • calculating and charging coinsurance in the ER is too complicated

Issue 3: 5% coinsurance on high cost brand name drugs

The regulations allow a pharmacist to charge 5% coinsurance for non-preferred brand name drugs. For a $300 prescription, that’s $15. For a $1000 prescription, it’s $50. By contrast, the charge for generics is $1 and for “preferred” brand names it is $2. Key points:

  • 5% for some brand name drugs could be a high dollar amount
  • Some brand name cancer drugs and injectables have no therapeutic equivalents
  • Patients with no alternative deserve protection from unaffordable charges

For further explanation and additional issues, read the comments themselves or call Rich Seckel at 859-233-3057.