NCB Not the Only Battleground, State Leaders Say

ATLANTA–While the industry’s providers are fighting for
their very lives as CMS prepares to implement national competitive
bidding July 1, thousands are also having to fend off threats at
home, such as Medicaid cuts and state taxes on HME.

Referring to impending cuts in his state, said Bob Achermann,
executive director of the California Association for Medical
Product Suppliers, “We’ve weathered through before, but
this may be the worst.”

Here are only a few issues some state associations are grappling
with:

–CAMPS: Prompted by a $17 billion budget
shortfall–the size of some smaller states’ entire annual
budgets–California legislators have decreed a 10 percent Medicaid
reimbursement cut to take effect July 1. On May 30, the state
Senate voted to reduce the cut to 5 percent; the state Assembly
eliminated it altogether. But for either alternative to supercede
the 10 percent cut, it must be part of the final state budget,
which could be months away. That means the 10 percent reduction is
likely to take effect.

“The budget news is very bad,” said Achermann,
noting that not only does the 10 percent cut loom, so does a budget
impasse.

“The health care deposit fund is what pays [Medi-Cal]
claims, and that money will get burned through by some time in
July,” he explained, adding that while a new budget is due
June 15, California legislators have a history of not passing a new
budget on time. “So there are general cash-flow issues of not
having money to pay Medicaid claims anyway.”

The June and August Medi-Cal payments are already scheduled to
be delayed; with the budget on hold, providers may likely need to
wait until September for another payment. “All that risk puts
everybody in jeopardy of not being paid at all. It’s all
about moving money from one fiscal year into the next,”
Achermann said.

There is an upside, however, he said. “The good news is
that there is a federal lawsuit filed in Los Angeles Superior Court
that would enjoin the 10 percent cut.”

The lawsuit, filed in May by the Alliance for Patient Choice, a
coalition of more than 100 health organizations, seeks an
injunction against the planned reimbursement cut on the grounds
that it violates “state and federal laws that require that
Medicaid (Medi-Cal) payments “must be sufficient to enlist enough
providers so that services under the [state’s Medicaid] plan
are available to recipients at least to the extent that those
services are available to the general public.”

At press time, no hearing had been set.

–GAMES: After investing months of concentrated
effort, the Georgia Association of Medical Equipment Services was
finally successful in getting medical equipment that is not
currently covered under the regulation (such as ventilators and
sleep equipment) exempt from state sales tax. Currently, patients
pay the tax.

H.B. 1078, a sales and use tax bill, was signed into law in May.
It will become effective July 1.

–MAMES: The Midwest Association of Medical
Equipment Services is dealing with pockets of problems among some
of its member states, which include Iowa, Kansas, Minnesota,
Missouri, Nebraska, North Dakota and South Dakota.

“One of the big issues in South Dakota is that Medicaid
has been denying all claims with [national provider identification]
numbers,” said Rose Schafhauser, executive director. While
CMS is requiring that all claims include the NPI only, the state
program is apparently not recognizing it, she said.

“It’s a huge cash drain on providers in South
Dakota,” Schafhauser said.

In Minnesota, a new law regarding paper simplification
“will dramatically impact organizations that bill the
state,” Schafhauser said. Currently, she noted, if an HME
product has no HCPCS code, one will be developed that can only be
used by Minnesota providers.

“But that goes away next year and they will have to have
standard codes,” she said. She has hopes that providers will
be able to sidestep any fiscal impacts; MAMES is represented on the
committee to address the issue.

–PAMES: For the ninth year in a row, the
Pacific Association for Medical Equipment Services, which covers
Washington and Oregon, is back in the battle to get HME exempt from
Washington’s sales tax.

“We have made eight attempts over eight years and four
bills, and we have failed to get it through the House Rules
Committee eight times,” said Tom Coogan, president of PAMES
and director of industry affairs for Care Medical, Portland,
Ore.

After more than 100 legislative visits to the state House and
Senate so far this year, support is building for the exemption,
Coogan said. “Many legislators say they support it, but their
support would be in the form of a ‘yes’ vote on a
bill.”

So far, PAMES has been unsuccessful at getting the bill that
far. It gets bottlenecked in the rules committee, Coogan said,
“so we are working [to come up with] a new strategy. The
frontal assault is not working,”

He said he was encouraged by GAMES’ success. “I was
just amazed they were able to get it through in one session,”
he said.

Washington isn’t the only state with issues, however.

Coogan and the PAMES membership have also been grappling with a
16.9 percent reduction in Medicaid that took effect in November in
Oregon. “We negotiated a temporary solution by giving up a
cost-of-living-adjustment over the next two years,” he
said.

That brought reimbursement back up to 95.5 percent of what it
had been, Coogan said. PAMES has appealed to the state emergency
board to get the remaining 4.5 percent reinstated. Even though
providers in most states are dealing with Medicaid problems and
other individual issues, state association directors said
competitive bidding remains the overwhelming concern.

Liz Moran, executive director of the Medical Equipment Suppliers
Association, which works with providers in Arkansas, Louisiana,
Oklahoma and Texas, said competitive bidding has been MESA’s
key focus. “Everybody is so focused on that and trying to get
this one-year delay,” she said. “That’s the
elephant in the room. Whatever else is going on pales compared to
that. It’s a bad idea badly executed.”