California Providers Face Upper Billing Limit

Sacramento Attempting to curb the fraudulent practice of billing for free equipment, the California Department of Health Services last week filed an emergency regulation, creating an upper billing limit on the amount a provider may charge Medi-Cal for durable medical equipment, orthotics, prosthetics and supplies.

In situations that the department deems urgent, DHS has the authority to enact a rule before receiving comments, said Gloria Peterson, assistant executive director for the California Association of Medical Product Suppliers. In this case, the rule — which prohibits providers from submitting charges for any item that exceeds the “net purchase price” plus 100 percent — took effect March 1. The comment period begins March 14 and lasts until April 7.

“[DHS] feels that providers — either through rebates or discounts — may be getting merchandise for free and receiving payment on it from MediCal,” Peterson explained. “While [the department] doesn’t think the average provider does this, it does think there are providers making a lot of money off items they have paid nothing for.”

In principle, CAMPS supports such efforts to combat fraud and abuse. However, this rule could create an administrative nightmare for honest providers, Peterson continued. “Sometimes providers get early-pay discounts that don’t come into play until up to six months down the road,” she said. “How do you apply that discount to something you’ve already dispensed? How would DHS audit along these guidelines?”

To voice these concerns, CAMPS’ executive director, Bob Ackerman, met with DHS officials March 12. The association also is working to develop an alternative to the upper-billing-limit rule. “We understand you can’t just complain about a change, when the intention is good.” Peterson said.

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