Final Guidelines
Reimbursement of Emergency Services for Undocumented Aliens

By M. Steven Lipton

On May 9, 2005, CMS posted final guidelines for paying providers for emergency services rendered to undocumented aliens. The guidelines implement of § 1011 of the Medicare Modernization Act, which appropriated $250 million per year for the four year program. The final guidelines, which have been anticipated for over six months, make a number of changes to the proposed guidelines published in August 2004.

State Allotments. The § 1011 funds are allocated as follows: two-thirds based on the percentage of undocumented aliens in each state and the District of Columbia; and one-third to the six states with the highest number of undocumented alien apprehensions (Arizona, California., Florida, New Mexico, New York and Texas). Under the FY 2005 allocations, the California allotment is $70.8 million. CMS will update the allocations for alien apprehensions on an annual basis. Amounts allocated to each state that are not spent will be returned to the U.S. Treasury, rather than redistributed to other states.

Covered Aliens. The final guidelines established the following categories of aliens who are covered by the § 1011 Program:

• Undocumented aliens (i.e., aliens who enter the U.S. without legal permission or fail to leave when legal permission expires);
• Aliens paroled to the U.S. to receive eligible services; and
• Mexican citizens permitted to enter the U.S. for less than 72-hours under a laser visa (biometric machine readable border crossing identification card).

Eligibility Determination. Providers may request eligibility information after the patient is identified as self-pay and not Medicaid eligible. Eligibility may be documented using a Medicaid or CHIP enrollment application or another existing information collection instrument. An approved, but optional, provider payment determination information form is available at http://www.cms.hhs.gov/provider/section1011. Providers are not required to ask potential eligible aliens if they have undocumented immigration status. In accordance with EMTALA, emergency services may not be delayed in order to collect eligibility information. Providers must maintain information on and attest to patient eligibility, but are not routinely required to submit the information to CMS or to the claims contractor for payment. Hospitals that participate in the § 1011 Program are expected to share eligibility determinations with physicians and ambulance companies.

Eligible Providers. Only Medicare participating hospitals, physicians (including podiatrists and dental surgeons) and licensed ambulance companies are eligible for reimbursement of § 1011 funds for emergency services rendered to aliens. CMS rejected requests for including the services of mid-level practitioners who may bill independently for their service since § 1011 is limited to physicians.

Covered Services. The final guidelines restrict reimbursable services provided by eligible providers to emergency services that are rendered to a covered alien from the commencement of the EMTALA obligations to patient stabilization. For specialty hospitals that accept a patient transfer, covered services begin when the patient arrives and end upon patient stabilization.

The definition of “stabilization” is the same in the EMTALA Interpretive Guidelines, i.e., the emergency medical condition is “resolved.” Inpatient and post-discharge services rendered to a covered patient after stabilization are not covered services under the § 1011 Program. For payment services, CMS will assume that patients are stabilized within two calendar days; CMS will not review stabilization determinations for claims occurring within two days. However, claims for more than two days are subject to review for stabilization determinations.

Physicians will be reimbursed for all medically necessary and appropriate emergency services provided to a covered patient. Physicians will not be reimbursed for services rendered after stabilization or for post-discharge visits.

Ambulance companies will be reimbursed for medically necessary transport to the first hospital and for appropriate transfers (in accordance with EMTALA) to a specialty hospital.

Enrollment Application. Providers must submit to CMS a paper and electronic enrollment application in order to participate in the § 1011 Program. Enrollment applications are on-line at http://www.cms.hhs.gov/provider/section1011. CMS expects that providers will be able to submit an electronic section 1011 provider enrollment application in mid-August.

Combined Billing. Hospitals may elect to bill for both hospital and physician covered services rendered to an alien. However, hospitals must submit claims for all physicians who are employed or contract with the hospital, and must file separate bills for hospital and physician services.

Third-Party Payments. Eligible providers must seek reimbursement in accordance with their existing practices and policies from all available funding sources (e.g., Medicaid, CHIP, private plans, etc.), including patients, before seeking § 1011 funds. Payment by Medicaid or the Department of Homeland Security for services will be considered payment-in-full, with no balance billing permitted except for deductibles or copayments that are not paid by the patient. For a patient without insurance coverage, providers may balance bill amounts not fully collected from the patient. If providers receive payments from a third-party payor after § 1011 funds are received, the provider must notify the § 1011 claims contractor and may be required to refund the overpayment.

Claims Submission. Claims for § 1011 Program payments must be submitted electronically to the CMS designated claims contractor in accordance with Medicare processing instructions within 180 days after the end of each calendar quarter. Payments will be made on the basis of all claims submitted by eligible providers in the state for covered services during the quarter. Claims submitted after 180 days following the end of a quarter will be denied. CMS expects that providers will be able to submit payment requests by mid- October.

§ 1011 Payment Rules. CMS has adopted a retrospective payment approach based on submission of claims for service on a service-by-service or per discharge basis. Medicare rules will be applied for services rendered prior to patient stabilization. Providers will be paid based on Medicare payment rules for the type of provider submitting claims.

Pro Rata Payment. All payment requests from all participating providers in each state will be aggregated. If the approved payment requests exceed the quarterly allotment of § 1011 funds for that state, the claims processing agent will reduce all claims on a pro rata basis. As an example, CMS indicates that if all approved claims for a state are $40 million, and the quarterly allotment of funds is $5 million, each provider will be paid 12.5% of the approved payment amount. If the approved claims in a calendar quarter are less than the state allotment, the excess funds will roll over to the next calendar quarter.

On-Call Payments. Participating hospitals may elect to receive payments for a percentage of their on-call payments to physicians. The instructions and form for submission of on-call payments is available on the CMS website at http://www.cms.hhs.gov/provider/section1011.

Payments for Undocumented Uncompensated Care. In recognition that some patients may refuse to provide the necessary information to make a § 1011 eligibility determination, CMS will make an additional payment to providers equal to 10% of the total approved outpatient emergency services furnished during the quarter.

Appeals. CMS has established an informal process for providers to seek clarification of payment decisions. The designated claims processor will provide additional information on the appeals process.

Commencement Date. All claims must have a date of service beginning on or after May 10, 2005. The initial quarter for submission of claims will therefore be May 10, 2005 to June 30, 2005, and the deadline for submitting claims will be December 31, 2005.

Designated Claims Processor. On July 7, 2005, CMS announced that the claims processing agent for the § 1011 Program will be TrailBlazer Health Enterprises, LLC. All claims must be submitted to the claims processing agent. TrailBlazer has established a dedicated web site for Section 1011 provider enrollment, claims processing, appeals procedures and other pertinent information. This web site can be found at: http://www.trailblazerhealth.com/section1011. Trailblazer also has established a toll-free telephone number (1-866-860-1011) to respond to provider inquiries.

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