Rehab divisions could fall victim to Medicaid cuts

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Monday, December 31, 2001

GREENVILLE, S.C. ­ Budget cuts by the state legislature have resulted in Medicaid eliminating its co-payments and suppliers reconsidering their assignment decisions, especially for rehab equipment, according to the state DME association.

In October, Medicaid was forced to change its allowable so it equaled Medicare's ­ 80%. Before, on a $100 item, Medicare paid $80 and Medicaid picked up the rest of the tab ­ $20 or 20%. Now, if a supplier takes assignment, he is left to pay that difference because there's no longer a Medicaid co-pay.

Steve Frantz, president of the South Carolina Medical Equipment Services Association (SCMesa), said he's currently surveying the association's members to see how much of an impact the cuts will have on suppliers and the equipment they take assignment on.

At his business here, Carolina Homecare Medical Equipment Center, Michael Causey, rehab services manager, said the cuts will have their biggest impact on whether the company takes assignment on equipment like high-end wheelchairs.

"We're already just barely squeezing out a profit," Causey said. "You could potentially lose a couple thousand on reimbursement."

The $5 million-plus Carolina Homecare does about 30% of its business in rehab equipment, Causey said. Up to 70% of the company's business is with Medicare, and of that, at least 75% is with Medicaid as a secondary insurance.

Frantz said Medicaid made the cuts after the legislature made an across-the-board, 4% cut to the insurance program's budget. For that reason, SCMesa is aiming its lobbying efforts at the legislature and not the state Medicaid program.

"We don't want to shoot the messenger," he said.

When you add federal matching monies, the 4% cut translates into a 13% cut to DME suppliers, Frantz said.

"It's a pretty big deal," he said.

Causey said a supplier could lose a quarter of a million dollars in secondary insurance money a year, as a result of the cut. HME

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