Medicaid payments resume

Friday, October 31, 2008

SACRAMENTO, Calif.--After the governor and the legislature finally agreed on a budget in September, HME providers in California were looking forward to getting paid again.

Provider Tom Lambert said he hasn’t seen a check from Medi-Cal, the state’s Medicaid program, since July.

“I’ve had to lay off about 15 employees,” said Lambert, president of Maximum Comfort in Redding, Calif. “We’ve had to take our trucks off the road, because we can’t afford to put gas in them. If patients can bring their equipment in, we’ll service it.”

The budget stalemate lasted 81 days, halting payments to healthcare institutions and other service providers. In July and August, the state withheld $4.25 billion in payments.

The check writes should resume “promptly,” said Bob Achermann, executive director of the California Association of Medical Product Suppliers (CAMPS), in late September.

The good news ends there, though, Achermann said. The budget continues a 10% Medi-Cal cut until March 1. After that, it becomes a 1% cut. Additionally, the budget doesn’t do much to close a $15 billion shortfall, he said.

“This budget will not do what it was intended to do, which doesn’t bode well for the future,” Achermann said. “It will be a matter of months and there will be a mashing of teeth and wringing of hands, and Medi-Cal will be a target again.”

In the meantime, CAMPS must decide whether it wants to continue with a lawsuit to exempt HME providers from the 10% cut. With the state scheduled to reduce the cut to 1% in March, it may not be worth it, Achermann said. Even if the association succeeds, the relief wouldn’t be retroactive.
Most recently, on Sept. 17, a federal circuit court denied the appeal of a broad coalition of providers, including CAMPS, to exempt certain providers from the cut. The courts have already exempted physicians, dentists and adult day health centers.