Opinion ID: 204594
Heading Depth: 2
Heading Rank: 2

Heading: Washington's Medicaid Plan

Text: Washington has chosen to extend hospital care beyond the categorically and medically needy to two other groups at issue in this case: the General Assistance-Unemployable (GAU) and the Medically Indigent (MI). The GAU and MI populations have incomes similar to the categorically and medically needy. But the Hospitals admit that they are ineligible for traditional Medicaid because they are not aged, blind or disabled, and they do not have dependent children. See 42 U.S.C. § 1396-1. It is undisputed that these programs began as state-funded initiatives. But facing budgetary constraints in 1991, Washington sought ways to alleviate the financial burden of covering these individuals. Because the GAU and MI populations did not qualify for traditional Medicaid, Washington amended its State Medicaid plan to indirectly fund their care using federal Medicaid DSH dollars. [3] In doing so, it placed the supervision of the GAU and MI programs under the purview of the Washington Department of Social and Health Services (Department). This agency uses a consolidated reimbursement system, creating much of the confusion in this case. But key differences remain between Medicaid's reimbursements for categorically and medically needy patients and Washington's program for the care of the GAU and MI populations. When a hospital treats a poor patient, it submits a claim to the Department. The Department then determines into which, if any, of the four categories (i.e., categorically needy, medically needy, GAU or MI) the particular patient falls. The Department then reimburses the hospital based upon a pre-established formula for the appropriate program. The Department determines the reimbursement for a GAU or MI patient by dividing Washington's Medicaid DSH allotment by the anticipated number of patients covered by these programs. That is, rather than distributing Medicaid DSH money to Medicaid DSH hospitals through a lump sum or at higher rates for their categorically or medically needy patients, Washington uses federal Medicaid DSH dollars to reimburse those hospitals at a much discounted rate for what would otherwise be state-funded MI or GAU patients. [4] The Hospitals argue that because Medicaid dollars subsidize the care of these individuals, they should be considered Medicaid patients in the calculation of their Medicare DSH reimbursements.