Health Advice



Families with sick kids on Medicaid seek easier access to out-of-state hospitals

Harris Meyer, Kaiser Health News on

Published in Health & Fitness

Three-year-old Elizabeth Zakutansky was born with a rare genetic condition that causes multiple seizures. Her neurologist, a top expert on treating her condition, practices at Lurie Children’s Hospital of Chicago, less than an hour’s drive from the Zakutanskys’ home in Hobart, Indiana. Her parents would like her to get all her care there.

But Lurie wouldn’t continue to treat Elizabeth, because her insurer, Indiana Medicaid, pays out-of-state providers much less than in-state facilities. That’s true for most state Medicaid programs. So the Zakutanskys pay the Lurie neurologist out-of-pocket for consultations, and the doctor gives detailed instructions for Elizabeth’s care to their local pediatrician.

When Elizabeth suffers uncontrolled seizures, however, she needs quick interventions. Her parents have to pull their two teenagers out of school and the whole family drives 2½ hours to Riley Hospital for Children in Indianapolis, the state’s only specialized pediatric facility. If she has to be admitted, the family sometimes must leave her there to return to their jobs and school.

“It’s terrible to leave your daughter and drive home so far away,” said Laura Zakutansky, Elizabeth’s mother. “You aren’t there to comfort her. One seizure could kill her. How would you feel about that if you weren’t there?”

Making top-quality care accessible at out-of-state children’s hospitals for kids with complex medical needs has long vexed families, providers and Medicaid programs. The choice of an out-of-state hospital can be a matter of convenience for patients and their families, and it may also mean ensuring state-of-the-art care, since only a limited number of hospitals and physicians in the country have the skills and experience to best treat children with certain conditions.

Congress has recognized the problem. Two years ago, it passed a law allowing states to voluntarily establish a “health home” program, potentially making it easier for out-of-state providers to serve as the coordinating caregiver for children with complex conditions. Participating states would receive a temporary boost in federal Medicaid funding to launch the program. But the Centers for Medicare & Medicaid Services said it has no “definitive timeline” for issuing guidance to the states on how to set this up.


State Medicaid officials argue that their states can’t afford to send children to out-of-state facilities that demand higher payment rates. Children’s hospitals say all they want is rates equal to what Medicaid pays in-state providers. Complicating matters is that most states have private Medicaid managed-care plans running their programs, and those plans decide which providers patients can go to and how much to pay them.

But Indiana lawmakers are moving on bills that would boost Medicaid payments to children’s hospitals in bordering states — Illinois, Kentucky, Michigan and Ohio — to near-parity with in-state facilities. Currently, a facility in Chicago might receive reimbursement as low as one-fourth of what an Indiana hospital would get for the same services. Both the House of Representatives and the Senate passed versions of the bill, and they are expected to reconcile the differences shortly and send it to the governor. The projected annual cost to the state is $300,000 to $950,000. To address fears that it may cost more, the bill would have to be reauthorized in two years.

“These families have to schlep down three hours in the snow to Indianapolis, and if they try to reschedule an appointment, they may have to wait another six weeks to get in,” said state Republican Sen. Mike Bohacek, one of the bill’s lead sponsors. He faced that situation with his own daughter, who was born in 2001 with Down syndrome in critical condition. “We can do better.”

Nearly 90% of children’s hospitals serve out-of-state patients, receiving payments from more than six states on average, according to a federal Medicaid commission report last year. Two-thirds of the states pay out-of-state hospitals a lower rate than in-state facilities. Kids with complex medical conditions account for 40% of Medicaid’s spending on pediatric care.


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