CMS Implements $1 Billion Program To Help Hospitals, Others Recoup Unpaid Emergency Room Costs

CAL/AAEM News Service calaaem_news at
Mon Aug 9 20:38:24 PDT 2004

CMS Implements $1 Billion Program To Help Hospitals, Others Recoup Unpaid Emergency Room

July 22, 2004

The Centers for Medicare & Medicaid Services (CMS) today announced a 
new program to provide $1 billion over four years to help hospitals and 
other providers recoup the costs of providing needed medical care to 
uninsured patients who cannot pay their hospital bills regardless of 
their citizenship status. 

"Emergency services are a critical part of public health for everyone 
in our communities, including undocumented immigrants," said Mark B. 
McClellan, M.D., Ph.D., administrator of CMS. "Hospitals and health 
professionals on the front lines of providing emergency care for 
everyone need our support.  With $250 million a year in new funding, the 
new Medicare law gives us a greater ability than ever to provide that 

The MMA set aside $250 million a year for the next four years (FY 2005 
through 2008) to help hospitals and certain other emergency care 
providers recoup a portion of their costs associated with providing 
emergency services to qualified individuals who are uninsured or cannot 
afford emergency care.   Each state will receive funding based on the 
formula established in the law.  Payments will be made directly to 
hospitals, physicians, and ambulance providers, including Indian Health 
Service facilities and Indian tribes and tribal organizations, as long 
as they did not receive payment from any other source such as the person 
treated or an insurance company. 

"We intend to use this new program to support all aspects of emergency 
treatment - including hospital, physician, and ambulance services - that 
have been strained by providing uncompensated care for undocumented 
immigrants," said Dr. McClellan.  "This funding will strengthen all of 
the components of emergency health care to help make sure that everyone 
in the community gets emergency help when they need it." 

In implementing the new assistance, Medicare proposes to allocate 
payments based on the costs incurred for the initial emergency services 
and associated services, including physician and ambulance services. 
According to the new law, two-thirds of the funds will be distributed to 
all states with the remaining third going to those states with the 
largest number of apprehensions of undocumented aliens. 

Under the Emergency Medical Treatment and Labor Act (EMTALA) hospitals 
with emergency rooms are required to treat and stabilize patients who 
present with emergency medical needs regardless of their ability to pay 
or citizenship status.  The cost of this care often strains hospital 
budgets and can threaten a hospital's ability to keep its emergency room 

"We encourage everyone involved in providing emergency care to review 
our proposal and help us craft the best plan to help hospitals and other 
providers remain vital providers of health care to their communities," 
Dr. McClellan said. 

CMS posted on its Web site a policy paper that outlines the proposed 
implementation approach.  The agency is seeking public comment through 
August 16 and anticipates having an implementation plan in place by the 
September 1 deadline set in the Medicare Modernization Act (MMA).  The 
proposed policy paper can be viewed at 

Source: CMS Public Affairs Office

Cyrus Shahpar & Brian Potts 
Managing Editors, CAL/AAEM News Service 

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