Medicaid

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Friday, February 28, 2003

INDIANAPOLIS - Indiana rehab providers who once did a healthy business with the state’s nursing homes and long-term care facilities are witnessing a dramatic disappearance of that business as the state responds to an $850 million budget deficit.

Until late last year, Medicaid would approve and pay for non-standard rehab equipment required by residents of long-term care facilities. But starting around Thanksgiving, the state has been to deny non-standard equipment, arguing that the facility should make those provisions as part of its per diem reimbursement.

Officially, the policy has not changed. But unofficially, say providers, the change has been significant.“They have changed how they are interpreting the policy, if not the policy itself,” said Paula Koenig, executive vice president of the Association of Indiana Home Medical Equipment Services.

Indiana’s fiscal crisis is shared by states across the country. Almost every state has cut, or plans to cut Medicaid spending this year. In Alabama, the governor’s office declared the current fiscal crisis as the worst since the Great Depression. In New York, the state is facing a $12 billion shortfall. Indiana is comparing its fiscal crisis to one suffered in the 1840s when the state went into debt building canals soon rendered obsolete by the railroads.

About 20% of a state’s budget outlays go to Medicaid.

“The problem is of such a magnitude that even people not in long term care facilities are being denied because Medicaid is asking what facility chairs have been tried, even when they are not in a facility,” said Nafe Alick, director of operations for Alick’s Home Medical in Elkhart, Ind.

About 30% of Alick’s business comes out of long-term care facilities.

Indiana providers are currently detailing examples of previous coverage policy and current coverage policy. Under discussion, says Alick, are lobbying efforts and court action. HME

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