California: Medi-Cal providers face 10% cut

Sunday, January 20, 2008

SACRAMENTO, Calif. – Gov. Arnold Schwarzenegger proposed on Jan. 11 a 10% across-the-board cut to Medi-Cal provider rates as part of his sweeping plan to bridge a whopping $14.5 billion budget gap.

The proposed cut, which could go into effect as early as June 1, may force some providers to drop low-margin products like incontinence supplies and high-maintenance products like home oxygen therapy. Others may abandon Medi-Cal entirely.

“What does this mean for me?” said Mark Ehlers, owner of Ehlers Health Supply in Stockton, Calif. “I’m going to take a real long hard look about the middle of this year at phasing out of Medi-Cal.”

Schwarzenegger’s plan also proposes delaying Medi-Cal payments to improve the state’s cash flow. In an e-mail to members, the California Association of Medical Product Suppliers stated: “Currently, the last checkwrite in June is held and paid in July. The new proposal seeks to add a second June checkwrite, meaning the last two weekly checkwrites in June would get paid in July. Also, one checkwrite in August would be held until September.”

“You get paid, but not on time,” said Executive Director Bob Achermann. “These are disruptive changes for providers.”

The state legislature is reviewing Schwarzenegger’s plan in a special session. In addition to a $4.7-billion cut to health and human services spending, the plan proposes cutting education spending by $300 per student per year, shutting down dozens of state parks and releasing tens of thousands of inmates early.

“I can sympathize with Arnold,” Ehlers said. “He’s damned if he does and damned if he doesn’t. We’re in world of hurt.”

Report: Fraud prevention nets millions

MIAMI – Florida Medicaid got a strong return on its fraud prevention efforts, including those targeting durable medical equipment providers, spending $11.6 million to save $134 million last year, say state officials.

In a report released last week, the Agency for Health Care Administration (ACHA) said the Medicaid Fraud Control Unit (MCFU) recovered $70 million through arrests and other civil actions; AHCA prevented $29 million in overpayments and fraudulent bills, and it recovered $34.6 million that had been overpaid or fraudulently billed.

Florida's annual Medicaid budget is $16 billion and is one of the state's biggest expenditures.

"Every dollar recovered from Medicaid fraud and abuse is another dollar going to the Medicaid population we serve," AHCA Secretary Dr. Andrew Agwunobi said in a release. "Practices of fraud and abuse throughout Florida will not be tolerated. The combined efforts of our two agencies ensure that the Medicaid program retains its integrity and continues to efficiently serve our state's vulnerable population."

Last year, the MFCU made 109 warrants and arrests, and had 46 convictions and pre-trial interventions. DME providers accounted for 43 of the arrests; most of them came from South Florida.