Massachusetts Scores 10% Medicaid Rate Hike Through American Rescue Plan Act Funding

BOSTON (July 22, 2021)—The MassHealth Medicaid program is implementing a 10% rate increase for durable medical equipment (DME) claims with dates of service effective July 1, 2021. The broad-based relief applies a 10% increase for all DME and augmentative and alternative communications codes and a 50% increase for labor code K0739, which covers repair or nonroutine service for DME other than oxygen equipment requiring a skilled technician.

“This is a big win when we needed it most,” said Jason Morin, president and CEO of the Home Medical Equipment and Services Association of New England (HOMES). “Between the pandemic impacts and the recent respiratory recall, providers are reeling and struggling to find ways to continue to absorb these rising costs. This action provides much-needed direct relief to the providers of Massachusetts and also shows us that the state’s Medicaid leadership is listening.”

In June, HOMES requested that DME suppliers receive a share of the health care focused relief funds granted to Massachusetts through the American Rescue Plan Act. This request, coupled with HOMES’ long-term efforts to build strong relationships with MassHealth leaders and other healthcare officials, gives suppliers serving Medicaid beneficiaries in the state a better footing to deal with higher product and operational costs related to the pandemic.

“It took a long time to develop, but we currently have an excellent relationship with the state Medicaid program. As a result, they have not only come to understand the value that our industry brings to their beneficiaries but also became provider advocates on a number of issues,” added Morin. “I also can’t overstate how instrumental Laura Williard, David Chandler, and the AAHomecare team have been in helping us to develop materials and resources and provide a national perspective in many of our meetings.”

AAHomecare has worked closely with state and regional association leaders to develop sample letters to request that DME suppliers receive a share of the $195 billion allocated to states to mitigate the fiscal effects of the COVID-19 pandemic on health care providers as well as a temporary 10% increase in federal matching funds for home and community-based services (HCBS). We will share more details on these efforts in an upcoming edition of Payer Relations in Focus.

“DME suppliers deserve a share of this support, and we’re committed to helping state leaders make the strongest possible case for being included in state-directed relief,” said Laura Williard, AAHomecare vice president of payer relations. “Now that the first state has explicitly approved our industry to share in this relief, we have an opportunity to let Medicaid officials in other states know about the precedent Massachusetts has set.”

Read the Massachusetts HHS announcement here.