Question:
Is is legal for hospitals to refuse Medicaid for payment?

My daughter has private insurance and Medicaid. In case her private insurance will not pay for WLS, we plan to self-pay the surgeon and ask Medicaid to pay the hospital bill. I have no doubt that Medicaid will pay for the surgery, but we try not to use Medicaid unless absolutely necessary. The problem is that the insurance coordinator at the surgeon's office says that the hospital may not accept Medicaid payment for the surgery. Is this legal? I know Medicaid pays at a lower rate, but can they deny their services for this reason? Since Medicaid payment will be at a lower rate than private insurance, can the patient pay the difference in cost to the hospital? Thanks for any help you can give.    — LaDonna S. (posted on May 7, 2003)

May 7, 2003
The reason the hospital would most likely refuse to accept her Medicaid is not because it is Medicaid, but because the surgery hasn't been properly approved by Medicaid first. If Medicaid covers bariatric surgery in your state, they won't pay for it until it has been pre-approved first. My suggestion: Have her surgeon's office get prior approval from both her private insurance AND Medicaid as her secondary. Then the hospital will accept whichever company pays for it.
   — thumpiez

May 7, 2003
You may have to have a denial letter from the private insurance before Medicaid will pay. I believe doctors and institutions can refuse to accept Medicaid reimbursement. Seems rather odd, though. There are a few doctors around here that don't accept ANY insurance. You pay on the spot for your visits. I know of one GP who is old enough to retire, but has enough patients that will pay out of pocket to come to him, so he is still working!
   — koogy

May 10, 2003
YES--it's absolutely legal for the hospital to refuse Medicaid for payment. The only Medicaid reimbursement they MUST accept is "emergent" situations. This is especially true for states with highly organized healthcare systems (e.g. California's county hospitals). WLS is still elective-yes necessary, but still not an emergent procedure that Medicaid would be obligated to pay--Good Luck!
   — Wannabe A.