Medi-Cal to temporarily boost reimbursement rates

SACRAMENTO, Calif. – California’s Department of Health Care Services has reversed plans to reduce reimbursement for oxygen concentrators 40% and will instead increase rates until the end of the public health emergency. 

DHCS has submitted a waiver to CMS to increase the reimbursement rate for respiratory equipment from 80% to 100% of Medicare rural rates and eliminate a 10% clawback. Those rates will be retroactive to March 2020, the start of the PHE. 

“California has seen a surge in COVID-19 cases, with hospitals trying to get patients out of the hospital,” said Bob Achermann, executive director of CAMPS, which reached out to state officials in a Jan. 29 call. “We reached out again to tell them this is not the time to do (a cut). Patients are paying a hefty price.” 

In December, the department, which oversees Medi-Cal, issued a bulletin stating it needed to implement a “rate correction” for oxygen systems (E0424, E0439, E1390 and E1391), cutting the reimbursement from $144.47 to $107.77, retroactively to Jan. 1, 2019. 

Medi-Cal rates were already low at 80% of the Medicare fee schedule – part of the state’s efforts to comply with the 21st Century Cures Act. 

“They’ve had a hard time keeping up with Medicare changes and are a year to a year-and-a-half behind,” said Achermann. “It’s an ongoing problem. We’ve been urging them since June 2020 to eliminate the 10% on respiratory equipment.” 

Achermann hailed the move as a “breakthrough,” but says ultimately, providers need a permanent fix. 

“This is a lifeline to the provider community,” he said.