State News

Legislation

Competitive Bidding Arises in Florida Budget: Florida’s Medicaid agency, the Agency for Health Care Administration, has a budget calling for a pilot program to test DME capitative competitive bidding. The proviso language requires “that we do a competitive procurement for a demonstration capitated DME program,” said Connie Ruggles, a senior management analyst at AHCA’s Medicaid office.

Although the program’s structure has yet to be determined, the agency’s request for proposal will be for organizations interested in bidding as a contractor for the plan. The selected company will receive a per member, per month fee to provide all DME services for Medicaid recipients in a “demonstration” geographic area yet to be determined. The capitated rate will be no more than 80 percent of the current Medicaid fee for service per member per month.

The proviso excludes customized wheelchairs, prosthetics, ostomy and colostomy supplies. Such items will continue to be paid on a fee-for-service basis.

Outside these exclusions, the selected company would have to “provide quality service to everyone that gets DME service [in the area] and they have to do it at a 20 percent savings,” Ruggles explained. The state plans to implement the program in early 2004.

Earlier this year, a lawsuit filed by the Florida Association of Medical Equipment Services successfully blocked the AHCA from implementing statewide competitive bidding for hospital beds and respiratory equipment and services.

“After we won our lawsuit, this is what they come back with. We’re getting together with the parties that will be affected” to discuss options, said Joan Cross, president of FAMES and C&C Homecare in Bradenton, Fla.

CAMPS Provides Alternatives to DME Cuts: Working to mitigate the possible negative effects of California’s new budget, the California Association of Medical Product Suppliers has proposed alternatives to the budget’s deep cuts in reimbursements for “unlisted items.” First, CAMPS suggested a rule that would require home medical equipment providers to pursue initial denials from Medicare before billing Medi-Cal. Second, CAMPS proposed a tiered reduction of reimbursements, ranging from 5 percent to 10 percent off the manufacturer’s suggested retail price for manual and power wheelchairs. Third, CAMPS said that Medi-Cal should require that providers become certified technicians before dispensing custom rehab equipment. More information about the association’s lobbying efforts is available at www.campsone.org.

NY Providers Fight Cuts for Dual-Eligibles: In its 2003-04 state budget, the New York legislature only partially restored funding for a Medicaid program that reimburses health care providers, medical equipment companies and pharmacies for co-insurance costs associated with beneficiaries eligible for both Medicaid and Medicare. But since July 1, the state has yet to implement the cuts because of arguments over how to interpret the legislation.

“Originally, the legislation reduced the copay to 20 percent of the 20 percent” co-insurance cost, said Jackie Negri, executive director of the New York Medical Equipment Providers Association, “so, essentially, it represents a 16 percent cut.”

For example, if a DME product costs $100, Medicare will pay $80. The state’s Medicaid program will now reimburse only $4 of the remaining $20, leaving $16 for the provider to absorb.

Over the summer, NYMEP communicated with lawmakers about specific application of the language and has come to agreement with New York’s Department of Health that the cuts would take effect only when the Medicare paid amount is higher than the Medicaid amount. Providers would pay for the cut in Medicaid reimbursement retroactively to July 1, although how such repayment would occur remains unresolved.

NYMEP plans to continue its political battle seeking a full repeal of the law. “A 16 percent cut is just not feasible for DME providers,” Negri said. “They will not be able to continue to service those in need.”

For breaking news, go to www.homecaremonday.com, the electronic news service of the home medical equipment industry.