Paying for Language Services in Medicare: Preliminary Options and Recommendations

Executive Summary

An issue brief outlining how Medicare could pay for language services for limited English proficient (LEP) enrollees.

Preliminary Options and Recommendations
By Leighton Ku
Center on Budget and Policy Priorities
820 First St., NE
Suite 510
Washington, DC 20002
This report was produced under a subcontract from the National Health Law Program, under the direction of Mara Youdelman and Steve Hitov, and was supported by a grant from the California Endowment. A number of experts, including representatives of health care provider associations, the interpreter community, advocacy organizations, Medicare payment experts and others, offered helpful information and advice as this project developed. Any opinions expressed are the author?s, however, and do not necessarily reflect the opinions or positions of those interviewed, the Center on Budget and Policy Priorities, the National Health Law Program or the California Endowment.
Executive Summary 
To improve access to health care, advance the quality of care and reduce the risk of medical errors, many organizations have proposed that insurers, including the federal Medicare program, provide funding for language services, such as professional interpretation, for patients who are limited English proficient (LEP). Such a step would serve as a counterpart to current federal civil rights policies that interpreter services be made available for LEP patients, as well as to nationwide efforts to improve the quality of care, which suffers when patients and their doctors (or other caregivers) are unable to communicate because of language barriers. Although more than two million elderly people in the United States are LEP, Medicare does not provide funding for language assistance. Reducing language barriers could increase the quality of care for a growing group of Medicare patients and reduce racial and ethnic disparities in health care.
This report discusses how the federal government could design payment systems for language services in Medicare. Medicare has a number of complex payment systems for inpatient hospital care, outpatient hospital services, physician visits, managed care and other services. A method of paying for language services that works in one Medicare payment system may not be feasible or appropriate for another. This paper reviews information about current approaches to pay for language services, current Medicare payment systems and principles that could be considered in designing payment systems for language services. It then reviews a number of options for inpatient and outpatient hospital systems, physician services and managed care plans.
The report offers a number of preliminary recommendations, but these recommendations should be viewed as a starting point, not an ending point, for discussion of these complex issues. The five recommendations are:
  • Develop a flexible system of Medicare payment for language services in hospitals. Evidence shows that hospitals frequently offer interpretation and other language services, but are rarely reimbursed for these expenses. This discourages broader availability of language assistance. A twophase system for development of payments could provide immediate financing for language services in inpatient and outpatient settings and provide time to develop a more refined payment system.
In the first phase, hospitals could receive additional Medicare payments based broadly on the volume of LEP patients, as measured by Census data on the LEP population in their service areas. This would provide funding for language services and give time for hospitals to implement more consistent methods of recording data about patients? primary languages and how their language needs are met.

This information could be used to develop, in the second phase, a more refined system that adjusts individual inpatient and outpatient hospital payments (i.e., Diagnosis-Related Group-based and Ambulatory Payment Classification-based payments) on a claim-specific basis for LEP patients. It is important to develop a system that gives hospitals flexibility in determining how to provide language services, e.g., through in-person professional interpreters, through telephone language services or through increased availability of bilingual and multilingual clinicians.

  • Offer grants to hospitals, schools that train health professionals and community groups to increase the recruitment and training of bilingual and multilingual medical interpreters and clinicians. To improve services, it will be necessary to increase the stock of appropriately trained medical interpreters and bilingual or multilingual clinicians. This could benefit not only Medicare patients, but the Medicaid and privately insured patients who will receive care from the same health professionals.
  • To improve language services in physician settings, provide Medicare reimbursements to in-person interpreters and develop a system of federal contracts for telephone interpretation firms. This will increase the availability of interpretation services in primary and specialty care settings, but avoids making physicians the financial intermediaries for these services. A reimbursement system for payment of interpreters could be developed, like the reimbursement systems that exist for many other health professionals. The federal government could also arrange to contract with a number of telephone interpretation firms that physicians could call to get telephonic interpretation for Medicare patients. These firms would directly bill the federal government. There are many circumstances in which it is not feasible to arrange for in-person interpretation and telephone interpretation is the appropriate option.
  • Improve monitoring and oversight of existing requirements to provide language services in Medicare managed care. Medicare managed care contracts already require that the health plans provide language assistance to LEP patients, but there is no organized system of monitoring how or whether health plans meet these requirements.
  • Exempt language services from Medicare costsharing requirements. If there was no exemption, Medicare beneficiaries would be required to pay for a portion of the costs of interpretation in physician and outpatient settings. This might actually create a disincentive to the use of interpreters, reduce the quality of care provided and create additional liability risks for health care providers. This exemption would be akin to existing Medicare policies that exempt clinical laboratory tests from cost-sharing. It would assure consistency with existing federal civil rights laws and avoid creating a disincentive to not use language services.
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