Providers downplay Medi-Cal biz

Wednesday, May 31, 2006

SACRAMENTO, Calif. - The ongoing cuts and demanding paperwork requirements that make California a less-than-desirable payer have forced some larger providers to downplay their Medi-Cal (Medicaid) business in certain product categories, according to industry sources.
"Take wound care supplies--there's (only) a 23% markup," said Bob Achermann, executive director of the California Association of Medical Products Suppliers (CAMPS). "As (Medi-Cal) increasingly eliminates the difference between what it pays the provider and what the provider pays the manufacturer, profit is slim to none."
At least one national provider has even begun toying with the idea of downplaying its Medi-Cal business for oxygen in parts of California, one industry source reported. (Currently, Medi-Cal pays providers $140 a month for oxygen equipment and services, down from $245 a month two years ago, Achermann said.)
With larger providers downplaying their Medi-Cal businesses for certain product categories, smaller providers like Daryl Bowman have picked up where the larger providers have left off.
"I've been getting more calls from referral sources, where they'll say, 'We understand you'll bill Medi-Cal for wound care supplies,'" said Bowman, owner of Bowman Medical Supply in San Carlos, Calif.
Mark Ehler, owner of Ehler's Health Supply in Stockton, Calif., believes he's seen an increase in his Medi-Cal business for oxygen for the same reasons.
Eventually, some industry sources predict, no provider will accept Medi-Cal business for certain product categories, leaving the state no other choice but to re-negotiate reimbursement and paperwork requirements with the industry.
That's what happened with tracheotomy tubes, said Steve Vinci, a general manager for the Timberlake Corp., a hospital-owned HME in Sacramento, Calif.
"Because there was still a demand, the state had to bring everyone back to the table," he said.