Undocumented Aliens Receive Limited Medicaid Benefits


Changes in federal Medicaid rules adopted in 1996 made most immigrants—including even legal permanent residents—ineligible for health care benefits. For immigrants in the country legitimately eligibility for Medicaid services is not available until they have been legal permanent residents for five years. Undocumented aliens, on the other hand, can only qualify for emergency medical care.

The limitation on Medicaid coverage for undocumented aliens arguably has more effect on hospitals than on the noncitizens themselves. Since hospitals are generally required to provide care for anyone they admit, regardless of citizenship status, the legal and financial problems often develop after the care has been provided and the hospital (or other health care provider) seeks reimbursement from Medicaid.

That scenario is exactly what played out in three related cases decided recently by the Arizona Supreme Court. In each case, Phoenix-area hospitals had provided care to undocumented aliens and sought reimbursement from AHCCCS, the Arizona Medicaid program. In each case AHCCCS acknowledged coverage for the emergency medical condition on admission, but denied coverage after each patient had been moved from acute care to a hospital rehabilitation unit.

AHCCCS maintained that its mandate was to provide emergency care only, and the fact that each patient had been stabilized medically (as evidenced by the move to a rehab unit) ended its liability. The hospitals argued that once AHCCCS acknowledged liability for a given patient’s care, it had to pay for that care until it was no longer medically necessary.

The Arizona Court of Appeals had ruled that once each patient’s medical condition had stabilized, Medicaid coverage should still be available if lack of medical care might lead to serious impairment of bodily functions or a serious health risk. The State Supreme Court disagreed, but remanded the cases for further fact-finding.

In the Supreme Court’s view, the important factual question is whether each patient still requires emergency medical care. That determination, in turn, depends on whether the patient’s condition is “acute” or “chronic.” Since the evidence at each trial had not focused on that question, the Court ordered further hearings to determine the nature of each patient’s condition. If the conditions remain “acute” even after transfer to the rehab unit, AHCCCS will be obliged to continue paying for the patient’s care. Scottsdale Healthcare, Inc., v. AHCCCS, August 21, 2003.

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