Which Providers Get 10% Reimbursement Cuts?

Toby Douglas did not bring good tidings. Yesterday, the director of the Department of Health Care Services outlined the recently approved 10% cuts for California providers of Medi-Cal services.

“This is really hard,” Douglas said. “These are extremely painful reductions.”

The California Hospital Association on Tuesday filed a lawsuit in federal court in Los Angeles seeking to halt the implementation of Medi-Cal rate cuts approved last week by CMS.

The state got what it requested from CMS when federal officials signed off on a number of cost-reduction measures, including a 10% cut in provider reimbursements.

Douglas outlined those cuts yesterday, as well as some exemptions to the 10% reduction including exemptions for home care, hospice and visits to clinics and physicians for children.

The provider reimbursement cuts outlined yesterday only apply to fee-for-service patients. Douglas said managed care rate cuts would be revealed by the end of this week, “either Thursday or Friday,” he said.

Douglas also announced that an 800 number will be established to help answer questions about the cuts from providers and beneficiaries.

The 10% provider cuts will be retroactive to June, when the Legislature first passed the budget-reduction measure. In the case of adult day health care centers, that not only means that the state plans to eliminate ADHC as a Medi-Cal benefit on Dec. 1, but centers will owe 10% of the money they’ve received since June.

Douglas said a few rural ADHC centers would be exempted from the reduction.

The exemptions were made to programs the DHCS felt would threaten access for Medi-Cal patients, Douglas said. “The three areas we looked at were the population, the provider network capacity, and utilization trends,” he said.

The provider cuts will be implemented “over the next month or two months,” Douglas said, “probably around mid-December to early January. We acknowledge that recoupment [of retroactive cuts] will be a large recoupment, but we will do that in a way that allows us to maintain access and ensure we preserve access to services.”

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Capitol Desk Medi-Cal