Providers compromise with state on new Medicaid rates

Friday, March 23, 2012

AMARILLO, Texas - In what could be a singular event, 12 HME providers all spoke in favor of new rates at a Medicaid hearing in Texas on Feb. 16.

Providers worked with Medicaid officials to cut rates for some codes and increase rates on others, says Barry Johnson, the legislative director for the Texas Alliance for Home Care Services (TAHCS).

"Everybody understood there should be some give and take on both sides of the table," he said. "It's a situation where I don't think anybody was a big winner, but I don't think anyone was a big loser, either."

The rates are the result of 18 months of negotiations that began when the Texas Legislature ordered a 10% across-the-board cut for home medical equipment for a two-year budget that began Sept. 1, 2011. The rates were effective March 1, 2012.

Providers and Medicaid officials found savings, for example, by limiting the maximum quantities allowed for diabetes supplies. Instead of allowing 200 test strips and 200 lancets per month, Medicaid now allows 100. Additionally, duplicate or similar codes were eliminated, and glucometers are no longer covered items.

Johnson said concessions like these gave Medicaid officials the wiggle room to increase rates for other codes, some as much as 8%. 

Still, no one expects the state's budget issues to go away. In fact, some worry there's not enough money in this most recent budget to fund Medicaid for a full two years and that the state will come knocking on the HME industry's door again.

"This is the real concern--what everybody needs to be ready to face is what's going to happen in those last 6 months when there is no money," said Liz Moran, executive director of the Medical Equipment Suppliers Association (MESA), whose members are in Texas and four other states.