California budget deficits could mean big Medicaid cuts

Sunday, June 15, 2003

June 16, 2003

SACRAMENTO, Calif. - To help close a $38 billion budget deficit, California Gov. Gray Davis has proposed eliminating DME Medicaid benefits for anyone 21 or older who is not in a skilled nursing facility.

If enacted, that move would save the cash-strapped state about $70 million. But the proposed cuts for DME don’t stop there. Lawmakers have also suggested:

1. Dropping the reimbursement rate for unlisted custom wheelchairs and accessories to the Medicare rate or MSRP minus 20%, which ever is less. California Medicaid currently reimburses custom wheelchairs at MSRP;

2. Reimbursing DME at 80% of the Medicare rate for listed items. The state now reimburses most DME at the Medicare rate;

3. Slashing reimbursement for all Medicaid providers by 15%.

California was supposed to approve a new budget by June 15, and enact it by July 1. But with Democratic and Republican lawmakers unable to agree on how to cut the deficit, what the budget will look like is anyone’s guess. Additionally, considering the deficit’s mind-numbing size, there’s a good chance lawmakers won’t make the June or July deadlines, say industry watchers.

“ If you eliminated every state employee tomorrow and adopted all the taxes that have been suggested, you probably would not eliminate the deficit,” said Bob Achermann, executive director of the California Association of Medical Equipment Suppliers (CAMPS). “It is that huge.”