State to Delay Benefit Rule

State health officials said Tuesday that they will delay enforcement of a controversial federal law intended to keep illegal immigrants from improperly receiving government-funded medical care, fearing that hasty action could imperil coverage of U.S. citizens.

The new rule would for the first time require 50 million Medicaid enrollees nationwide to provide identification and proof of citizenship to receive benefits. President Bush signed the regulation into law in February, and it is scheduled to go into effect July 1.

Of nearly 7 million Medi-Cal recipients in California, about 650,000 may lack documentation such as birth certificates or passports even though they are legitimately enrolled, according to the California Budget Project, a nonprofit group that studies government policies affecting the poor. About half of all Medi-Cal recipients are children and about 10% are 65 or older.

The state’s decision could put it at odds with federal law. But it remains unclear whether federal authorities would take action against California for delaying enforcement for a few months.

“The federal government and the state are working in good faith to implement this process,” said Stan Rosenstein, deputy director of medical care services in the California Department of Health Services.

Some hospital and doctor associations have warned that the new rules could create hardships for some Medi-Cal recipients. They said that locating the necessary documents could be costly and time-consuming, and difficult for the mentally ill, the homeless and infirm.

Elderly people who were not born in hospitals and not given birth certificates could be particularly affected -- mothers of many elderly African Americans born in the South were denied admission to hospitals.

State officials said they are delaying implementation of the law because the U.S. Department of Health and Human Services has not released federal guidelines on the new rule, which were still being revised late Tuesday. As a result, the state has not had time to develop its plans for the counties, train workers and warn Medi-Cal patients about the new requirement, Rosenstein said.

“It would be impossible to implement this on July 1 from a practical standpoint,” he said in an interview Tuesday. “We don’t want people looking back at this effort and saying the state of California really messed this up.”

It was unclear Tuesday if Washington would financially penalize California for the state’s delay.

The state’s action means that new applicants or enrollees renewing their Medi-Cal coverage will not be required to submit documentation of their citizenship beginning July 1.

Until the state implements the new rule, which could come in a couple of months, neither the patients nor physicians will be penalized if their documentation fails to come through, Rosenstein said.

Once the state receives federal guidance on implementing the rule, which could come this week, California will probably write and distribute rules for county social service agencies by mid-summer. The new rules will go into effect after the state and county governments can notify enrollees of the new requirement, he said.

Hospital and physician groups applauded Rosenstein’s statement Tuesday, saying great care must be taken to prevent low-income Americans from losing the Medi-Cal benefits for which they are eligible.

“We applaud them for steps they are taking to make this more workable,” said Peter Warren, a spokesman for the California Medical Assn.

Jim Lott, executive vice president of the Hospital Assn. of Southern California, expressed concern that hospitals -- and particularly emergency rooms -- will be stuck with more uninsured patients if the state doesn’t carefully implement the new Medi-Cal rules.

“If they have no coverage, they will find their care in the emergency room, where they can’t be turned away,” Lott said.

Congressional sponsors of the rule said they believed it will save money for the federal government.

The requirement could save $735 million in the next decade, according to a Congressional Budget Office report.

John Stone, a spokesman for Rep. Charlie Norwood (R-Ga.), who championed the new requirement, said the lawmaker had received reports from his home state that illegal immigrants were fraudulently claiming non-emergency Medicaid benefits.

“We want to see the law enforced,” Stone said. “Every bit of loss of funds means a loss of benefits to low-income Americans who were entitled to receive them.”

Before the new rules were approved, many states required most Medicaid applicants only to sign a letter, under penalty of perjury, attesting to their citizenship. (The documentation requirements for legal immigrants who are eligible for Medicaid have not changed.)

In California, enrollees’ Social Security numbers were also verified through the federal government.

Both federal and California health officials have said there is no evidence that many noncitizens are defrauding Medicaid.

It is unclear how many U.S. citizens could inadvertently lose Medicaid eligibility if they are unable to prove their citizenship status. But the challenges are significant: Nearly all of the 50 million Medicaid recipients nationally are citizens, and all will have to submit documentation for the first time in the next year.

Rosenstein of the California health department said he would like the Bush administration to expand the kinds of documents allowed to verify eligibility. Examples include military discharge records or a sworn affidavit from longtime neighbors or U.S. children vouching for an elderly person’s citizenship.

“No one would want us to send 3.2 million children to the Department of Motor Vehicles to get photo identification,” Rosenstein said, noting that under the new rules a birth certificate alone, without a photo ID, is insufficient to prove citizenship for a 3-year-old child.