Cuts force nat’l provider to stop accepting Medi-Cal

Friday, August 1, 2014

SACRAMENTO, Calif. – California’s 10% cut to Medicaid reimbursement is taking its toll: It has driven at least one complex rehab provider from the market and left California Children’s Services (CCS), the state program for children with certain health problems, scrambling.

Numotion has stopped accepting Medi-Cal in what spokesman Justin Richardson calls a difficult decision.

“We fully understand the implications for our customers,” he said. “We will continue working with the appropriate state agencies and local legislators to convey the importance of funding for these programs, and advocate on behalf of our customers.”

The cut, originally slated to take effect June 2011, was challenged in court and ended up being implemented in October 2013.

In this year’s budget, the state legislature moved to restore funding, but Gov. Jerry Brown vetoed the measure.

“When they passed the budget, one of the things they said is the department had the flexibility to apply or not apply the 10% or any portion thereof, if it felt there was an access issue,” said Douglas Zaer, president of Superior Medical Equipment in Torrance, Calif. “The department has always said, ‘We can find providers.’”

But National Seating & Mobility (NSM) has met with the state over several months to discuss the effect of the cut and the industry’s concerns may be starting to get through, said Charles Sargeant, vice president, Western Region.

“I think at this point they are educated on what CRT is and how this is affecting disabled children in California,” he said. “And they now have an understanding, which they didn’t have initially, that the availability of providers in California is very slim.”

Providers still doing business with Medi-Cal are looking for ways to absorb the cut. They say they can’t just drop out of the market.

“Most of the smaller companies like ourselves really don’t have any choice,” Zaer said. “We limit some of the items. There are just some items with the 10% cut and the reimbursement methodology that we can’t afford to do.”

Those include wheelchair ramps and certain bath equipment, he said.

For other providers, repairs are the biggest problem.

“At this point, I don’t really know how long we’re going to be able to provide services in the repair area,” said Martin Helsing, owner and president of San Diego-based Mobility Solutions, which has already laid off one employee and is contemplating cutting hours.

This summer, rumors were flying that NSM would follow in Numotion’s footsteps, but company reps say not so fast.

“We’re reviewing every aspect of how we service CCS and the products we utilize, and we’re going to make a black-and-white decision on what products we can continue to provide and what services we can continue to provide,” Sargeant said. “(But) we have no plans to discontinue service at this point.”