Why Medicaid Is No Longer a Voluntary Program

How the Emergency Treatment and Labor Act interferes with state sovereignty

It is widely believed that Medicaid is a voluntary program. While this may have once been true, it is no longer the case. Today, states confront the dilemma of having to choose between joining Medicaid or being forced to sacrifice any health care “safety net” for their indigent populations. This is all because of a law enacted by Congress in 1986 called the Emergency Treatment and Labor Act (EMTALA).

In 1986, Congress passed EMTALA, making it a federal crime to transfer a patient from one hospital/emergency room to another for financial reasons. It compels hospitals to render care, even without any compensation.

EMTALA led to an explosion in uncompensated care. It became common knowledge that, if a person presents to a hospital emergency department, the hospital must provide care and may not transfer the patient elsewhere without the patient’s permission. This became a major cause of “cost-shifting,” as hospitals and doctors tried to recoup their losses from uncompensated care by raising their fees on insured patients.

Many doctors resigned from emergency room coverage, tired of rendering uncompensated care to people who might turn around and sue them for malpractice. EMTALA forced many hospitals to close their emergency rooms.

But EMTALA did more. It killed the voluntary nature of the Medicaid system.

Four years before the passage of EMTALA, Arizona still had its own state-run indigent care program.

Arizona law required each county to establish a comprehensive indigent care system. Maricopa County, home to metropolitan Phoenix, maintained a system of health clinics staffed with full-time physicians. At its heart was the Maricopa County Medical Center, a full-service teaching medical center, including a trauma center and the largest burn unit in the southwest. Patients who were seen in private hospitals and needed hospitalization were transferred over to “County.”

The system provided preventative care, prenatal care, mental health, and long-term care. Eligibility was tied to income and assets. Patients presenting for the first time as an emergency would be treated and retroactively enrolled in the system.

I was a surgical resident at “County” (1976-81). It was commonplace for a doctor at some other hospital to phone me and say, “I have an indigent patient in my emergency room who has an ‘acute gallbladder’ and who doesn’t have insurance. Can I send her over to you?” Like all of my fellow residents, I would enthusiastically accept the patient (we were a teaching hospital and wanted the experience). They would get prompt treatment, supervised by full-time faculty, cared for in a ward setting.

This system worked well and was popular. But in 1982, after pressure from various factions, Arizona became the last state to join Medicaid.

Today, if Arizona decided to leave Medicaid and resume its pre-Medicaid system, it couldn’t do so. EMTALA would prevent it from functioning. EMTALA specifically bans any hospital from transferring patients for financial reasons. Arizona’s pre-Medicaid system depended upon the transfer of indigent patients from private centers into its indigent health system, thus relieving private hospitals and providers from the burden of constantly providing uncompensated care.

Last year, when 26 states and the National Federation of Independent Business challenged, in federal court, the Patient Protection and Affordable Care Act (“Obamacare”), they argued there was no constitutional authority for the so-called “individual mandate.” But they also challenged the authority of the PPACA to require states to expand their Medicaid rolls, and thus their Medicaid budgets.

The plaintiffs claimed that compelling the states to increase the amount they spend on Medicaid was a federal “commandeering” of the states’ treasuries.

Medicaid is a voluntary program, said the Feds. If the states opt in they receive matching funds of 50% or more from the federal government to fuel the system. But nothing prevents the states from opting out of Medicaid, so state sovereignty is not being usurped.

The states responded that the loss of federal matching funds resulting from an opt-out would be so severe as to amount to coercing the states to stay in the program.

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  • ||

    Its the Emergency Medical Treatment and Active Labor Act.

  • Universal||

    UNIVERSAL pollution from Koch Oil.
    UNIVERSAL asthma.
    UNIVERSAL birth defects.

    But somehow UNIVERSAL health care for the victims is something bad.

  • ||

    We all have pollution, asthma and birth defects courtesy of Koch Oil?

    All of us? Huh.

    And we're being forced to have it by the Koch Brothers?

    Huh.

  • Externalities, Mr. Obvious.||

    "Privatize profits, socialize risks.”

    Then bullshit everybody how that's "free" enterprise.

  • ||

    Clearly we should socialize the profits and privatize the risks. That way everyone (except us, of course) will be equally destitute and sick, and we'll always have a ready supply of scapegoats. I can't figure out why doctors don't like this idea.

  • Blacksmithing||

    What does that have to do with anything?

  • ||

    The amazing thing is that you actually believe you have a point.

  • ||

    "By banning the transfer of indigent patients to indigent care facilities, this 1986 federal law unintentionally denies states the freedom to exercise their traditional sovereign powers to design their own cost-effective forms of indigent care."

    Why does Dr. Singer think it was unintentional?

  • ||

    Agreed
    For years I've been thinking all these laws they keep passing only make it more difficult to get cheap health care which in turn requires more people to ask for assistance. Hence the eternal slow growth of government through planed complexity.

  • Blacksmithing||

    If the "unforeseen consequences" of a law are obvious even before the law is passed, are they really unintended?

  • Libertarian||

    Only thugs use Medicaid.

  • Only thugs pollute...||

    ...and believe in universal asthma and endocrine disruption for the masses.

  • ||

    Endrocrine Disruption would not be a very good name for a band.

  • Liberal||

    Only thugs like individual freedom.

  • Appalachian Australian||

    Come back when you've actually had someone in your car who is on an unholy combination of TRICARE and Medicaid.

  • Major Johnson||

    The real problem is that the federal government takes money from states and then tells the states they can't have their money back unless they do X, it's essentially legalized blackmail.

    Social services should be provided solely by the states themselves, not the federal government. If the people of a state decide they don't want to support the poor, the elderly and the disabled they should be able to not do so and live with the results of not doing so. If the result is a negative they'll find a way to do it, if it's a positive they'll continue not doing it.

    That's the real fear of both liberals and conservatives, any empirical proof that their massive centralization and federal nanny is the wrong solution to any problem.

  • adam||

    "the federal government takes money from states and then tells the states they can't have their money back unless they do X,"

    Maybe I'm ignorant, but I don't know of any federal taxes on the states. If there are any, they're certainly miniscule in comparison to individual income taxes and payroll taxes. Rather, the federal government takes money from people in the states, and then tells the states they can have that money if they do certain things.

  • Bill||

    Aren't there federal gas taxes?

  • Major Johnson||

    Actually if it were taxing the states directly we could see how bad this is, and I suspect people wouldn't put up with it any further.

    If the feds tax the citizens of the states those are all dollars the states could be taxing in order to achieve what the federal government is trying to do. By taking so many tax dollars from the citizens of the states that leaves little left for the states to tax in order to spend on their own citizens/infrastructure. That forces the states to fight at the federal level to get those monies back, which allows the federal government to tie strings to it.

  • Len||

    This is stupid, when the people of a state are taxed that is money being taken from that state.

  • ||

    ""This is stupid, when the people of a state are taxed that is money being taken from that state.""

    The citizens' money doesn't belong to the state. That money being taken is not from the state, but the citizens of the state.

  • ||

    The citizens' money doesn't belong to FedGov either.

  • ||

    Interesting. I like what he's talking about, but I could also see how this could be horribly run and/or become a political football. Anyone with experience in hospital administration want to critique this?

  • jacob||

    Well, not so much hospital administration, but I've dealt with EMTALA a lot.

    The idea behind EMTALA is not that hospitals are forced to use Medicaid; the hospital can choose to not submit claims to Medicaid and simply bill the patients directly. Happens all the time with privately-insured patients ("I'm sorry Mr. Smith, but Aetna only covered X, you need to pay the rest.") The idea behind EMTALA is that smaller, private hospitals can't simply dump patients on to bigger university hospitals or county hospitals at their will without a justifiable reason. Patients can be transferred to any hospital for any reason. If an uninsured person shows up in an ER with an intracranial bleed, the hospital he/she arrived at can say "well our neurosurgeon isn't available" or, even better "we called Johnny neurosurgeon and he feels uncomfortable taking care of this patient" and then transfer said patient to a place where there is a neurosurgeon. Never mind the fact that a large chunk of head bleeds don't need a neurosurgeon. This is not an EMTALA violation.

    I do agree with Dr. Singer that EMTALA should be scrapped because it's just a cash-grab for the government. I think EMTALA violations cost ten thousand dollars. If a patient is receiving substandard care, they are welcome to sue. Additionally, no hospital on this planet wants it known that they let a patient die in the ER without proper care. However, claiming that EMTALA is somehow forcing participation in Medicaid is a stretch.

  • ||

    The idea behind EMTALA is that smaller, private hospitals can't simply dump patients on to bigger university hospitals or county hospitals at their will without a justifiable reason.

    The punchline is that EMTALA has gone from being an anti-dumping law to being a mandatory-dumping law. As it has been amended/interpreted/enforced, hospitals are now required to take many transfers.

    We get transfers that drive past literally dozens of other hospitals to get here. Oddly, those transfers are all poor people. Even more oddly, the hospitals that get bypassed weasel out by making sure they don't have anyone on call.

    Because we maintain a full call rotation, we are required to take these patients. By EMTALA.

  • jacob||

    My experience mirrors yours, but I would add that receiving hospitals can make up just as much excuse for not accepting patients as sending hospitals can. I know of a major university hospital that will only accept neuro patients into its Neuro ICU. They will not allow them to go to the medical or surgical ICU (even though the patient would be fine there). On numerous instances they've turned down neuro patients when their neuro ICU is full. They've been doing this for so long that I don't believe they are simply paying EMTALA fines every time they do so.

  • ||

    Are there studies which show the increase in emergency care costs post-EMTALA? I have been looking, and they are not easy to find.

  • adam||

    This EMTALA/Medicaid has another consequence- the closing/moving of hospital in or near poor areas. If your emergency room is near a poor neighborhood, you're going to get swamped with people who can't/don't pay, or pay with Medicaid. That's going to bankrupt you. Solution, move away from that area or close. That's precisely what a number of hospitals in my city have done.

  • jacob||

    Bingo

  • ||

    Anyone with experience in hospital administration want to critique this?

    The devil is in the details. The system he describes (kind of) could work, I guess. Some problems/questions:

    (1) Would the hospital be able to transfer a patient to the designated indigent care hospital over the patient's objection?

    (2) What about patients who can't be transferred, either because they aren't stable or (and this is the real rub) the designated indigent care hospital is full up (as it will be a lot of the time)?

    (3) How do the hospitals that the patient walks into get paid for doing the evaluation/stabilization? The care they have to give because the indigent hospital is full?

  • jacob||

    Like all of my fellow residents, I would enthusiastically accept the patient (we were a teaching hospital and wanted the experience). They would get prompt treatment, supervised by full-time faculty, cared for in a ward setting.

    I'm going to respectfully disagree with the good doctor on this one.

    First of all, County hospitals are the absolute worst places for care. I was at the mother of all County hospitals, Cook County Hospital in Chicago (aka Stroger). The care was terrible. It would take a day and a half for a CT scan. The clerical staff and nurses basically were all government employees who honestly could give a shit about the patient's outcomes. The residents were good (I was a fellow at the time), but to say they were "enthusiastic" about accepting patients is a bit of a stretch. Particularly if the patient wasn't an acute abdomen. Try calling a resident and telling them you have a patient with pneumonia that you want to transfer to them, and see how "enthusiastic" they get.

  • Mensan||

    "First of all, County hospitals are the absolute worst places for care."

    And I'm going to respectfully disagree with this. In my experience VA hospitals are the worst.

  • jacob||

    OK fine it's a push. The VA and County hospitals are both gov't entities and training grounds for residents/students/fellows.

  • ||

    Let me see if I understand this. At both the VA and county hospitals you are getting free care; but you're complaining that it isn't as good as the care you'd get if you were a paying customer. Damn, who woulda thought/sarc.

  • There is no "we"||

    So true.

    Just like if I "opt out" of work I don't get money from the job-creators who have most of the money. Effectively, I'm cut off if I don't play by their rules. My "freedom" is fake.

    My employment is really involuntary servitude.

    I demand emancipation.

    Medicaid money should be given by the federal government to the states with no strings attached.

    And my paycheck should come with no strings attached, too.

  • Brendan||

    The money comes from the people in those states and is dangled in front of the states. The state can't afford to do it alone on their existing budget, nor will people tolerate a tax increase because they've already paid the federal government.

    With no real limit to their taxing and spending abilities, the federal government could implement an income tax rate or series of taxes that ended up with them collecting, say, 90% of your income. They could then turn around and "graciously" give you vouchers or cash type transfers to pay your bills, provided you comply with some "mild" conditions. Would this be legitimate, with detractors subjected to sarcastic comments like yours?

  • ||

    Anybody looked at EMTALA from the 13th amendment perspective? Requiring hospitals (the individuals who work there) to provide a service without being paid = slavery ...?

  • adam||

    I believe there are actually provisions under the medicare/medicaid laws that pay hospitals from uncompensated care. I'm sure it's not sufficient, but I think they do get something.

  • jacob||

    Hospitals do get money from the state, not the feds, for indigent care. They have to submit numbers on how many uninsured they care for to qualify.

    Believe me, from a pure money game, it's nowhere near enough.

  • ||

    HERSA is a big player for that kind of grant.

    http://stateprofiles.hrsa.gov/

  • brm||

    OK, lets say you run a brake shop. For every set of brakes you charge for parts and labor. Simple brakes cost less than complex brakes because their parts are cheaper and they are easier to fix.

    Let's say a simple repair is $100/wheel, out of which you make $50/wheel net profit.

    Let's say you get a very complex car in and this car needs every part of it's brakes replaced, the bill is going to be serious money. Lets say $300 per wheel. The parts bill that you have to pay is $125 per wheel, and your labor costs are $125 per wheel. Therefore you make $50/wheel to run your shop (out of which you get paid.)

    How long would it take you to stop taking these complex cars, if you could only receive $50/wheel? Its not enough, but its something...

    The problem with Medicaid is that the reimbursement rates were never tied to true costs of practice. Therefore, the provider (MD, Hospital, Homecare, Pharmacy) never got to decide on doing uncompensated care, they had to decide on just how much money they could afford to lose/patient. After all, if you have $250/wheel in costs, and only get $50/wheel in payment, you lose $200/wheel.

    Its not just that we don't get paid, that would be acceptable as I feel that as an MD, I should be willing to do some work for free. Its that we end up paying for the privilege and that takes food off my kid's table. They did not sign up for that deal.

    Medicaid was the problem and instead of being grown ups and fixing the system, and accepting the negatives that come with any system, the government and the politicians set things up so that we had to accept the negatives and they get to bash greedy doctors or act like they are protecting the treasury any time some problem comes up that would be fixed by increasing the true reimbursement or matching it to the true costs of practice.

  • Major Johnson||

    They get paid, they just get paid far less from a different bucket of borrowed money.

  • ||

    I believe there are actually provisions under the medicare/medicaid laws that pay hospitals from uncompensated care.

    Not really, no.

  • first||

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  • jacob||

    Well, if Petter Hegre says so, who can argue against that!

  • first||

    Exactly

  • protefeed||

    Especially the part where he says the model was "born lucky". Because being in circumstances where your best option seems to be posing nude when you turn 18 for a photographer who seems to be trying to capture the "painfully skinny legal near-pedophilia" demographic seems sooooo lucky.

  • first||

    Indeed

  • ||

    Just turned 18

    Uh-huh.

  • ||

    That's why her profile in Barely Legal magazine says.

  • ||

    Duh,

    That's what her profile in Barely Legal magazine says.

  • first||

    ?

  • first||

    yep

  • first||

    Yep

  • Chris||

    One problem I see with this argument is that this act would not stop a state or city from setting up public hospitals that would be the default center for receiving patients that do not have an explicit arrangement to go to a private hospital. Then they wouldn't have to move them for indigent services, they would already be there. Presumably the service would be such that one would opt to go to a private hospital if at all possible which should leave the load on public hospitals with only those who cannot afford private hospitals.

  • LarryA||

    How do you plan on forcing patients to walk into the default hospital, as opposed to walking into the private hospital and, under EMTALA, forcing the private hospital to care for them?

  • protefeed||

    Today, states confront the dilemma of having to choose between joining Medicaid or being forced to sacrifice any health care “safety net” for their indigent populations.

    I'm not seeing the "dilemma" or "forced" part. If you believer taxation is theft, then a state choosing to quit paying for Medicaid with stolen state taxes, not getting any stolen federal dollars for that service, and telling people it's up to them to provide for their own health care, or find a private charitable donor to help them out, are all moral things to do.

    Ending the partial slavery of EMTALA would be moral too.

  • ||

    Any choice to opt out of Medicaid effectively forces them to abandon indigent health care delivery.
    States won't abandon care, they never do. In this case it sounds like the state is saying you (the feds) addicted us to this 50% funding so you can't take it away. Boy does that sound familiar ideologically? Because the state can not afford it is besides the point. Like Ron Paul says; if you can't pay you do NOT get the service. AZ should stop wasting their money and budget.

  • first||

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  • first||

    Her name may mean goddess in Greek but it is German and American blood that Thea has running through her veins. And don’t be fooled by her fragile appearance - this 21-year-old powerhouse has will power and determination in spades!

    Described by Petter Hegre as ‘An iron will in a small body’ Thea takes her health seriously, and is what you may call something of a fitness fanatic. An Olympic champion in self-discipline - sports, green tea and red wine are her recipe for a healthy mind and body. She also follows a strictly no-carbohydrates diet to keep her figure lean and toned!

    Hegre met Thea during a dinner party in Cape Town and with her fine features and super-toned body immediately spotted her potential as a model. The rest, as they say is history…

    With her stunning looks, vibrant personality and her steely determination, Thea is certain to succeed in whatever she puts her mind to!

    http://www.hegre-art.com/models#action=show&id=166

  • first||

    Sorry about the double post.

  • first||

  • first||

    Meeting Mia for her first ever full frontal nude sessions proved to be a happy experience for both model and photographer.

    At the photo session in Paris, Mia proved herself to be perfect model material. Not only does this playful and sexy young woman have a superb body – with a particularly amazing ass - she also has the brains too.

    Mia recently moved to Budapest and is studying Public Management. She has plans to open her own model agency and experience in front of the camera is certain to help this ambitious girl on her way.

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    http://www.hegre-art.com/models#action=show&id=164

  • ||

    The problem is, if a state opts out of Medicaid losing the 50% federal government subsidy, its residents are still paying for the federal medicaid programming, money that is going to other states. The residents would then have to pay for California and then their own state's independent indigent program - double taxation.

    If the state could ask for a reduced federal tax burden on its residents which it would then apply to its own programs, it would be voluntary. Otherwise, it is anything but.

  • ||

    The state might as well opt out of federal money since federal funds seemingly cover only a small portion of the necessary expenditures and that amount gets even smaller when you consider the hassle and expense of federal red tape...

  • ||

    Where's Arizona' Sen. John McCain been on this all these years?

  • ||

    Well it seems to me if I understand it correctly, if a hospital refuses federal money they no longer need to worry about EMTALA...

    So quit taking federal money...

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