Kansas: Medicaid proposes drastic rate cut

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Thursday, January 24, 2019

TOPEKA, Kan. – A proposal to drastically reduce Medicaid rates for DMEPOS, published just before the holidays, came as a surprise to stakeholders, they say.

The Kansas Department of Health and Environment said it planned to submit an amendment to set the Medicaid fee schedule for DMEPOS items at 65% of the non-rural Medicare rates.

“We have no idea what the rationale behind this is,” said Rose Schafhauser, executive director of MAMES. “We met with them in February of last year and made them aware then that even going to the Medicare allowable would be problematic.”

States around the country have been adjusting fee schedules to comply with the 21st Century Cures Act, which sates that the federal portion of Medicaid reimbursement for HME cannot exceed what Medicare allows. States can base their Medicaid rates on Medicare’s lowest fee schedule or they can gather aggregated data using their Medicaid and utilization rates for 2018.

What Kansas is proposing is untenable, says Robert Clock, the state representative to MAMES and CEO of Winfield-based Clock Medical Supply.

“I think for most providers this is well below their product costs,” he said. “As people assess where they are with their goods and services, to receive a 35% reduction on the Medicare non-rural rates is unacceptable.”

That’s of particular concern in the large swathe of the western half of the state, which is largely rural and already underserved, says Clock.

“Patients will have to stay wherever they receive their primary service, usually a rural hospital, which is way too costly,” he said.

Complicating matters: the transition to a new administration. The Medicaid director is leaving, new lawmakers are being seated, and a newly-elected Democratic governor replaced the outgoing Republican, said Clock.

“It’s a whole new learning curve,” he said.

Providers had until Jan. 22 to submit comments on the proposal.