California to Implement Medicaid Provider Rate Cut in 2006

Sacramento, Calif.

Providers are taking a 5 percent Medicaid rate cut in 2006.

Although DME is exempt from the cut to Medi-Cal, the state’s Medicaid program, it affects most services, medical supplies and incontinence supplies, according to the California Association of Medical Product Suppliers.

The 5 percent cut originally was scheduled to run Jan. 1, 2004, through Dec. 31, 2006, but the measure was temporarily put on hold by a federal court following a lawsuit filed by the California Medical Association in 2003. In August, a federal court of appeals reversed the order, clearing the way for the cuts to begin.

In late 2005, CMA launched what it called “an aggressive campaign to change the administration’s mind” and said it was going to sponsor legislation in an effort to block the cuts. “California’s neediest patients and their physicians will get a lump of coal for the holidays if the [Gov. Arnold] Schwarzenegger administration follows through with its plan to cut Medi-Cal payments by 5 percent on Jan. 1,” the organization stated last month.

The cut will not be retroactively implemented for claims before 2006 and is scheduled to last only this year.