Medicaid cuts stun Texas HME providers

Friday, February 28, 2003

SAN ANTONIO, Texas - Texas Medicaid dropped a bomb on providers in late January when it issued an unexpected 80-page blueprint to revamp the DME fee schedule effective March 3.

Texas HMEs were scrambling in early February to digest the plan. But the fear, providers say, is that Medicaid will so severely reduce reimbursement and curtail eligibility that it could throttle back provider ability to serve Medicaid beneficiaries.

Just as galling to providers: After working with Medicaid last year and offering up $6.7 million in savings through increased bureaucratic efficiencies, state officials didn’t involve providers in revamping the fee schedule.

“We kept on asking, what did they think of our recommendations,” said Michael Flores, president of the Medical Equipment Suppliers Association (MESA). “They kept saying they didn’t know, and then this came out.”

Not only does the new fee schedule eliminate many local codes, creating ambiguity in how some products should be billed, it also leaves reimbursement for some codes undetermined.

“We are confronted with operating in an arena where we have not a clue as to what the state intends to pay for products and services provided in our area,” said Ron Kieschnik, president of Seating Profiles in Houston. “That is an impossible situation for a business to function in an orderly fashion.”

Texas Medicaid spokesperson Kristy Zamrazil said the department condensed its 600+ DME codes to about 200 national codes to comply with HIPAA. The changes also incorporate provider suggestions on ways to save money, such as limiting incontinence supplies, she said.

Condensing the codes and incorporating provider suggestions added up to $3.2 million in savings, and Medicaid needs to reduce the DME fee schedule by $7.3 million. To reach that number, the state has not ruled out competitive bidding. HME