Tighter Medicaid rules put on hold

Concerned about creating hardships for eligible recipients, California remains one of several states that have yet to comply with a 4-month-old federal law requiring Medicaid enrollees to provide proof of citizenship to receive benefits.

California health officials said they were making a “good faith effort” to comply with the new rules, which took effect July 1, to ensure a smooth transition. But the state runs the risk of a federal audit and possible loss of some funding for its Medi-Cal program, which serves about 7 million low-income beneficiaries.

“We are moving as expeditiously as we can to reasonably and responsibly implement the program,” said Stan Rosenstein, deputy director of medical care services in the California Department of Health Services. “It’s so complicated, we want to make sure we do it right so we minimize the negative impact” on eligible beneficiaries.

Rosenstein said the state is still reviewing concerns raised by county officials and healthcare providers -- as required by law -- before issuing regulations to counties so they can begin enforcement. He did not say when that would happen.

The biggest fear expressed by healthcare officials nationwide is that large numbers of low-income citizens would not be able to locate original birth certificates or other documents that the Deficit Reduction Act of 2005 requires to apply or re-enroll in Medicaid programs. The documents can be costly and time-consuming to obtain.

Previously, many states only required most Medicaid applicants to sign a letter, under penalty of perjury, attesting to their citizenship; California verified enrollees’ Social Security numbers with the federal government.

Some fear that the new requirements will discourage low-income Americans from obtaining health services, and lead to more serious illnesses. As many as 20 other states have yet to implement the federal rules, Rosenstein said.

Public health advocates have criticized the new law as an attempt to trim Medicaid rolls. Steve Hitov, managing attorney for the Washington, D.C., office of the National Health Law Program, said federal officials have “made a conscious decision to interpret the law in any way they can that will drive as many eligible people off Medicaid as possible.”

One particular concern was a rule change that would no longer allow newborns of low-income illegal immigrant mothers to automatically receive Medicaid through their first year of life, even though the children are U.S. citizens.

“It’s just a horrible public health decision,” Hitov said. “For those states that aren’t implementing it, I say congratulations.”

Jeff Nelligan, a spokesman for the U.S. Centers for Medicare and Medicaid Services, said states are subject to federal audits. If a state is found to have made payments to an ineligible recipient, he said, the federal agency would recover its share of the funds.

Recipients of Medicare, the government’s healthcare program for seniors, or Supplemental Security Income, which assists low-income seniors and the disabled, are largely exempt from the documentation requirements because they have already provided such proof.

And although citizenship documents still have to be obtained for children, parents don’t have to provide photo identification for them. Instead, they can sign an affidavit attesting to the identity of children under 16 years old.

But some say the remaining requirements, such as requiring original documents proving citizenship and identity -- like a certified birth certificate and a driver’s license -- can pose significant hurdles or costs.

“It is an administrative nightmare for the states,” said Martha Roherty, director of the National Assn. of State Medicaid Directors, which held its fall conference in Arlington, Va., this week.

Oklahoma does not expect to have its rules in place until Feb. 1 at the earliest, said Jo Kilgore, spokeswoman for the Oklahoma Health Care Authority. That state, like California, is trying to set up a system that would allow Medicaid officials to electronically verify birth certificates from their own state’s health records, so applicants born in their state would not need to bring a certified document.

“We’re just trying to make it as easy as possible and make the transition smooth,” Kilgore said. “We think if we acted immediately that probably would have caused more harm than good,” creating a domino effect where people would become sicker and hospitals aren’t paid.

The Deficit Reduction Act, signed into law in February, was sponsored by lawmakers concerned that illegal immigrants were fraudulently receiving non-emergency Medicaid services, although federal and state officials have said there is no evidence of widespread fraud.

In Virginia, which implemented the law July 1, the number of new enrollees has dropped.

“The impact is we’ve lost almost 12,000 kids since then, so it’s been terrible,” said Linda Nablow, director of the division of maternal and child health for the Medicaid program in Virginia. “I believe the great majority, almost every single one of them, is in fact a U.S. citizen.... It’s just causing an enormous barrier.”

Other states, like Vermont, are phasing in the rules over several months, while in the state of Washington, officials are allowing people applying for Medicaid to begin receiving benefits while the applicant or state searches for documentation.

It “is not exactly what the feds told us to do but it’s what we thought we need to do, particularly for kids,” said Doug Porter, Medicaid director for Washington state. “We’re confident that we can extend benefits to folks ... and comply with the spirit of the law.”

John Stone, a spokesman for Rep. Charlie Norwood (R-Ga.), who helped write the law, acknowledged that some states may have faced hardships in implementing it but said they have had plenty of time to comply.

“So far, all of the objections we have heard seem rather contrived,” Stone said.

ron.lin@latimes.com