California cuts off negotiations

Tuesday, February 28, 2006

SACRAMENTO, Calif. - California's Department of Health Services in late 2005 slammed the brakes on negotiations with the state's HME association over a lawsuit to revamp coding for rehab and improve reimbursement for oxygen.
The California Association of Medical Products Suppliers (CAMPS) had been in negotiations with the department on and off since the association sued the state in July 2004, and the two parties had reached an out-of-court settlement, according to Gloria Peterson, assistant executive director of CAMPS.
(Peterson declined to detail the settlement.)
The state changed its mind, however, when the California Medical Association's lawsuit to overturn a 5% Medi-Cal rate cut failed on appeal. The reason: "neither Medicaid recipients nor providers have a private right to challenge California's compliance with Medicaid," according to the district court's decision.
"We got bounced," said Bob Acherman, executive director of CAMPS. "They said, 'We have no need to settle your lawsuit, because you don't have the right to sue us, anyway.'"
CMA and a dozen other plaintiffs, including CAMPS, had argued that the 5% cut--which affected disposable medical supplies and enteral formulas but not DME--was illegal because it didn't consider the impact on beneficiary access to care.
CAMPS may now look to address coding and reimbursement issues through legislation, Peterson said. It would like to see the state make its rehab codes more specific and increase the reimbursement rate for oxygen so it's at least on par with Medicare's. (Currently, Medi-Cal pays about $164 per month for equipment, service and maintenance to Medicare's $200.)
Mark Ehler, owner of Ehler's Health Supply in Stockton, Calif., said it's increasingly difficult to provide oxygen and related services, when the state continually cuts reimbursement. As a result, providers have begun thinking about what types of services they can and cannot afford to provide.
"California has 9,000 home oxygen patients, and something's going to give," said Ehler, who's a CAMPS member. "Unfortunately, that is what it's going to take. (The state's) painting themselves into a corner."