California HMEs Attempt to Ward off Medi-Cal Blows

SACRAMENTO—California HME providers are working feverishly
to stave off the Medicaid hits that keep on coming as the
beleaguered state tries to cut itself out of a budget mess that has
left it $25 billion in the red.
           

However, it is almost certain that the state will hold payments
from Medicaid (called Medi-Cal in California) that were to go out
today, according to Bob Achermann, executive director of the
California Association of Medical Products Suppliers.
           

“The [payment] that comes out [June 25] will be held,”
he said. “This will be painful. This environment is a lot
more difficult than it used to be.”
 
Achermann said industry stakeholders have been successful in
warding off drastic Medicaid cuts: “We are now back to one
percent for DME with Medicaid cuts,” he said. Still, he
added, while there are no immediate cuts looming, “I do not
think we are out of the woods yet.”
 
Nor are they likely to be.
 
The state is also working toward contracting for adult non-power
wheelchairs and is in the process of accepting stakeholders’
comments, Achermann said.
 
“They’ve begun the process. They’ve had
stakeholders’ meetings and they have asked for
comments,” he said.
 
California has a precedent for such a plan, Achermann said. For
several years, it has contracted with manufacturers for medical
supplies, such as incontinence, wound and ostomy products.
Manufacturers guarantee to the state that they will sell such
products at a certain rate to providers. Providers are reimbursed
at a percentage rate above that figure—23 percent for medical
supplies, say, and 38 percent for incontinence products.
 
But as of Wednesday, the state had no mechanism in place for
determining what it would pay providers for the wheelchairs,
according to Achermann.
 
“There is no existing percentage as there is for
supplies,” he said, noting that wheelchair costs vary
significantly depending on the needs of the individual and a host
of other variables. He pointed out that, unlike supplies that can
simply be shipped to a patient, wheelchairs demand service.
 
“The difference with this plan is that there is a lot more to
it than the price of equipment,” Achermann said, adding that
CAMPS has already asked the state to exempt complex rehab from the
plan because it would present untenable problems for manufacturers,
providers and beneficiaries.
  
The state has not established a target date for implementation of
the plan, nor has it defined what it is looking for or what the
terms are.
 
“There are a lot more questions than answers at this point. I
think it is a lot more complicated than they think, and we are
trying to convince them of that,” said Achermann, who was
working Wednesday on CAMPS’ formal comments on the
plan.
 
He said he has hopes that the plan will ultimately be shelved. That
might not mean the end of any cuts, however. Achermann noted the
state likely targeted wheelchairs because 48 percent of the $100
million Medi-Cal spends annually is for wheelchairs, a big savings
target for a state that is billions in the hole.
 
Even if the economy swings upward, the pressure for Medi-Cal cuts
is unlikely to ease, Achermann said.
 
“We don’t know what is going to happen here,” he
said, “but whatever recovery occurs this year will not have
an immediate impact.”
 
California is suffering from drastic drops in sales and property
taxes, the highest unemployment rate in the nation, topping 11
percent, and expenses that outpace income by the billions.
 
So California providers will continue to feel the pressure for more
reimbursement cuts, Achermann said. “The pressure on this
contracting stuff is going to stay here, too. You’re not
going to convince the state of California that contracting is a bad
idea. They think they should use their clout to make sure they get
the best price.
 
“Nothing is going to get better here.”
 
Still, Achermann said, providers have the opportunity to make their
voices heard and to win some battles.
 
“We’re not going to slay the dragon; we’re just
going to get some blood once in a while,” he
said.