Texas Medicaid Wrangles with Incontinence Supplies, Possible DME ‘Competitive Procurement’

AUSTIN, Texas — On Feb. 11, Texas Medicaid providers were
surprised to learn of changes to incontinence products quantities
that will take effect April 1. According to Barry Johnson,
president of the Texas Alliance for Home Care Services, the change
was posted on the state’s Medicaid website “literally overnight
with no notice.”

“The manufacturers we contacted were very concerned and
uninformed,” Johnson said. “They must now re-tool their packaging
to meet the new supply requirements,” he said, noting at least one
major vendor has said meeting the April 1 date isn’t possible.

Johnson said affected items include diapers, pull-ups and
liners, which will be reduced from 300 per month per beneficiary to
240; and underpads, which will be reduced from 150 per month per
beneficiary to 120.

If beneficiaries need more, providers must get a letter of
medical necessity from the physician demonstrating need, although
“we have no guidance what would qualify on the LMN for approval of
additional supplies,” Johnson said.

“This is absolutely ridiculous because it affects special needs
beneficiaries with diseases such as cerebral palsy, spina bifida
and muscular dystrophy,” he continued, pointing out that patients
with “these and other neuromuscular diseases never experience
improvement in their urinary control. In fact, the loss of bladder
control becomes worse by age.

“These reductions will severely affect special needs
beneficiaries … most are children,” Johnson said. “Guess nobody
said the state had a heart for less fortunate individuals who
cannot go to the Capitol and complain.”

Another issue for Medicaid providers, Johnson said, has added
Texas to the list of states eying “competitive procurement” for
DME.

Based on a proposal from Thomas Suehs, executive commissioner of
the Texas Health and Human Services Commission, the new system
would take effect in September 2012 and would either limit Medicaid
providers to those selected through a competitive procurement
process or through competition for exclusive manufacturer
agreements.

“Either approach will result in lower reimbursement rates,”
Suehs said in a report presented Feb. 17 to the state’s Senate
Finance Committee on Medicaid.

Johnson said he would be testifying before the committee about
the effects of such a change “if they will listen.”

Last year, Texas Gov. Rick Perry threatened to opt out of
Medicaid. The state is now asking the federal government for
permission to operate the program as it sees fit.

Texas Medicaid covers 3.6 million beneficiaries, and the state
spends 25 to 30 percent of its budget on the massive program. That
figure could rise to 40 percent if growth trends continue, state
officials believe.