Kentucky: State proposes diabetes switch

Sunday, September 26, 2010

LOUISVILLE, Ky. - A couple of Medicaid changes that came out of seemingly nowhere had providers crying foul in August.

In a July 27 notice "buried" on its website, Kentucky Medicaid issued an "emergency administrative regulation" to move all diabetes testing equipment and related supplies from the DME benefit to the pharmacy benefit. Effective date? Aug. 1.

"We did not receive a notice letter," said Teresa Camfield, executive director of the Kentucky Medical Equipment Suppliers Association (KMESA). "If I hadn't clicked on it, we never would have known."

KMESA convinced state Medicaid officials to push the implementation date to Oct. 1; to hold a public hearing on the matter--held Aug. 23; and to seek public comments.

The state wants to make diabetes supplies a pharmacy-only benefit to take advantage of manufacturers' rebates worth approximately $2 million a year.

But other states use similar rebate programs without removing the supplies from the DME benefit, said Tammy Johnson, KMESA president.

"We have to determine how we can work with Kentucky Medicaid to keep the diabetic supplies under DME and still let the state take advantage of those rebates," she said.

A lot's at stake because the change could have an impact on beneficiaries, too, say providers.

"We have been working with some of these patients for 15 or 20 years," said David Chesnut, owner of Pennyrile Home Medical, which has four locations in western Kentucky. "Nobody likes to be forced (to change suppliers)."

Also included in the regulation: capped rental items like standard wheelchairs, CPAP and hospitals beds, which are now capped at 10 months, instead of 12 months--equating to about a 16% to 20% reduction in reimbursement, said Camfield. That change went into effect Aug. 1.