Provider pool stagnates in California

Friday, September 30, 2005

SACRAMENTO, Calif. - In a move that surprised few, California Medicaid extended a moratorium on provider numbers in September, stonewalling durable medical equipment companies that want to establish roots in the state for another six months.
The moratorium, extended like clockwork every six months since 1999, has whittled the number of DMEs in the state from roughly 1,300 to 900, said Gloria Peterson, assistant executive director of the California Association of Medical Product Suppliers. That's cause for concern for Jim Leedom, who six years ago missed picking up a provider number by three months.
"I'll turn away, on average, a customer a day who has a need for a product I can't fulfill," said Leedom, owner of Home Health Depot in Lomita, Calif.
Under the moratorium, only DMEs with existing provider numbers are allowed to do Medi-Cal business, leaving all other DMEs, with a few exceptions, high and dry. Even a DME with a provider number that decides to sell can't transfer its number to the new buyer.
The moratorium and the resulting shrinking number of DMEs is little cause for concern for Medi-Cal. State officials deny that any access-to-care issues exist, and as long as it hears no cries from beneficiaries, it's not required to lift the ban, Peterson said.
With the status quo expected indefinitely, one of the few options left on the table for DMEs looking to crack into California Medicaid is litigation, said Clay Stribling, an attorney with Brown & Fortunato.
"It would be a very expensive process," he said. "It would take the right combination of a company that's well financed and has a big enough stake that they can gain from getting this changed. As of yet, that supplier hasn't presented itself."
CAMPS has already worked with the state to revamp the provider application and screening process, such as the introduction of a "temporary" license, and it doesn't know what else it can do, Peterson said.
The moratorium may have a silver lining: DMEs with existing provider numbers like Cheryl Hartley have experienced less competition. Hartley, general manager of Merced Medical Supply in Merced, Calif., said she has watched her Medi-Cal business increase 50% since the moratorium went into effect, but she's not sure she can attribute it all to the moratorium.
"It's a 50-50 split," she said. "Half of the increase is (the moratorium) and half is fewer providers willing to take Medicaid business at all."