Section 1011 of the MMA provides for federal reimbursement of emergency health services furnished to undocumented aliens. Specifically, section 1011 provides $250 million for four years (FY 2005-2008) to certain eligible providers for some or all of the costs of providing emergency health services, including services required under EMTALA and other related hospital inpatient and outpatient and ambulance services, to undocumented and other specified aliens.

In July 2004, CMS submitted for public comment its proposed implementation plan for the section 1011 program (Program). Comments were accepted from July 29 through August 16, 2004; however, final regulations have not been published to date. The proposed implementation plan discusses the following: allocation of payment to states; which aliens and providers are eligible to participate in the Program as well as what services are eligible for payment; documenting of citizenship; payment methodologies; and review of payments made under the Program.

State Allocations
Each year two-thirds of the funds, approximately $167 million, will be proportionally distributed to all states based on the percentage of undocumented aliens residing in the state compared to the total number of such aliens residing in all states and the District of Columbia. The remaining one-third, approximately $83 million, will be divided among the six states with the highest number of undocumented alien apprehensions in the preceding fiscal year. For example, distribution in 2005 will be based on the number of apprehensions for the period July 1, 2003 through July 1, 2004. CMS's preliminary analysis showed that in 2003, the following states had the highest number of undocumented alien apprehensions: Arizona, California, Florida, New Mexico, New York, and Texas. Allotments to the six states will be based on the proportion of undocumented alien apprehensions in a certain state compared to the total number of apprehensions for all six states. Again, data from the preceding fiscal year will be used.

This approach raises the concern that it does not account for the fact that many aliens do not receive emergency care treatment in the state in which they reside. Challengers to this approach assert that allotments to states in which hospitals provide care to aliens who reside in nearby or neighboring states will not accurately reflect the costs these hospitals incur for treating such aliens if the allotment is solely based on the alien's state of residence and not state of treatment.

Eligible Aliens, Eligible Providers, and Covered Services
Payments under the Program will be made for services provided to certain eligible aliens. Eligible aliens include: (a) undocumented aliens, (b) aliens who have been paroled into the United States at a United States port of entry for the purposes of receiving eligible services, or (c) Mexican citizens permitted to enter the United States for not more than 72 hours under the authority of a biometric machine-readable border crossing identification card issued in accordance with the Immigration and Nationality Act.

Providers eligible to receive direct payment under the Program include hospitals, physicians, and ambulance providers, including IHS facilities and Indian tribes and tribal organizations. Eligible providers must submit a "one-time" enrollment application to receive payments under the Program and only hospitals participating in Medicare may apply. Providers that are already enrolled in the Medicare program need only submit an abbreviated enrollment application. In the course of enrolling, hospitals may elect either to receive (a) payments for hospital and physician services or (b) hospital services and a portion of on-call payments made by the hospital to physicians.

Payments under the Program will be made for eligible hospital, physician, and ambulance services. Specifically, eligible hospital services include those services that the hospital provides under its EMTALA obligations, which are triggered when a patient enters the emergency department and requests treatment. Eligible physician services include all medically necessary and appropriate services required under EMTALA or any related inpatient or outpatient services. Follow-up care is not covered. Ambulance services include medically necessary ambulance transportation of a patient to the first hospital in which he/she is seen for an emergency condition. Though not subject to EMTALA, CMS deems ambulance providers' services to be related to services that a hospital is mandated to provided under the statute.

CMS proposes that coverage under the Program ends when the patient is discharged from the hospital. CMS considers this approach to be the least burdensome for hospitals. In addition, CMS believes if related services are defined in the most comprehensive way, using a patient's discharge as a cut-off for Program coverage will capture all costs of care provided to an alien who is admitted pursuant to EMTALA.

No payments will be made under the Program to providers that already received payment for services from other third-party resources, including federal health care programs. CMS has proposed to require providers to seek reimbursement from all available payment sources prior to requesting payment under the Program. Furthermore, CMS proposes that if a provider receives third-party payment subsequent to receiving payment under the Program, the provider must reimburse the payment to CMS within 30 days.

Challengers to CMS's proposed plan question the adequacy of payments to providers for which Medicare does not have a rate schedule, such as pediatric services.

Documentation of Patient's Citizenship Status
In order to meet the Program's goal of providing payment for emergency medical services provided to aliens, providers must identify which treated patients fall into this category. CMS has proposed that the provider request and document information regarding a patient's citizenship status prior to discharge but after the patient is identified as self-pay or not Medicaid eligible. CMS suggests using the patient's Medicaid application, which commonly contains a question regarding citizenship status.

The strongest opposition to CMS's proposed plan relates to this element. Opposing parties assert that the requirement that hospitals collect citizenship information as a condition of payment under the Program will inevitably force vulnerable patients to choose between receiving care and "unjustified privacy invasions." Opponents also believe that this requirement will create a widespread fear of deportation among undocumented aliens that will greatly deter them from seeking necessary care.

Payment Methodology
CMS has proposed a "bill-specific" payment methodology where providers would be required to submit bills or claims for payment on a service-by-service or per-discharge basis similar to the payment methodology under Medicare or other insurance. Payment would be determined based on the information included in these claims. CMS further proposes that Medicare payment rules be used to calculate the payment amount for hospital, physician, and ambulance services. IHS service facilities and tribal organizations would also submit claims; payment amounts would be based on current Medicare payment rules.

CMS proposes to require providers to submit claims within 90 days of the close of the federal fiscal quarter. It is in the provider's interest to adhere to this time limit due to the fact the Secretary will make payment only after all claims from all eligible providers are received for the previous quarter. Untimely claims will be denied. In the event the total amount of a state's payment requests exceed the state's allotment, CMS has proposed that the approved provider reimbursement rate be recalculated so that the payment to each eligible provider be reduced on a pro-rata basis to assure that each provider will receive some payment.

Payments are supposed to begin in April 2005 for services provided to eligible aliens during the first quarter of FY 2005 (October 1-December 31, 2004). Quarterly payments will be made every three months.

Claims Review
CMS has proposed to designate one contractor to receive claims, calculate provider payment amounts, effectuate payments, and review medical necessity of submitted claims and other submitted documentation.

There will be no formal appeals or grievance process and once a claim is processed it cannot be resubmitted or revised by the provider. CMS has, however, proposed a reconciliation process for each state on an annual basis. During this period the CMS contractor will disburse any remaining provider payments. Overpayments must be repaid within 30 days of written notification by CMS's contractor; failure to submit overpayments may result in withholding of future Program payments. CMS also will conduct compliance reviews to assure no inappropriate, excessive, or fraudulent payments are made from the state allotments.

As stated above, under section 1011 payments are to begin April of 2005; however, CMS has not yet published a final implementation plan to date.