CAMPS met with staff of the DHCS Medi-Cal Rate Development Branch to emphasize the problems with Medicare Competitive Rates and their likely impact on beneficiary access to services. Current law requires Medi-Cal to track Medicare rates at 80% for most DME and 100% for custom rehab equipment of the respective Medicare allowable. Medi-Cal is behind in adopting some of the CB rates and currently is using the 1/1/16 Medicare rates and applying the percentage reduction.

 

Our discussions focused on the new rates for ventilator rentals, though not impacted by CB,  have been reduced dramatically through Medicare and now Medi-Cal adoption of new vent rental codes. Monthly rental allowables have dropped from roughly $1,200 to $645 and the costs of other support equipment, supplies and RT support are substantial. Likewise the unique aspects of custom rehab equipment and accessories necessitate a recognition of those costs and the unique modifiers that apply to this equipment.

 

Though the conversation was cordial current law still requires DHCS to track Medicare changes and use the 80% or 100% ratios. DHCS has not yet implemented all the CB rate reductions that have been enacted in Medicare. Providers should be aware that they are at risk for these lower rates being implemented this year and then applied retroactively back to 7/1/16. There is activity at the federal level to delay the implementation of the non-rural rates but we have no assurance as to the eventual impact.

 

We outlined our concerns over the sustainability of these rates as well as the yet to be implemented 10% clawback. Beneficiary access to DME will be impaired and we requested that these rate reductions not be implemented. We committed to provide additional information they will request to document both the costs of some of this equipment and the large percentages of patient base that both Medicare and Medi-Cal represent for most DME providers. We will continue to push back on the impact of these rates but it is clear that access will drive any rate relief barring dramatic changes in CB with new leadership of CMS. We will also try and get these issues into play in the upcoming state budget process. 

CMS today released guidance to the DME MACs for retroactive reimbursement adjustments for rural/non-bid area providers for equipment & services furnished between July 1-Dec. 31, 2016. These adjustments follow provisions in last year's CURES legislation providing a measure of relief for rural/non-bid area providers.

From our initial reading of the guidance, it appears that CMS will recalculate the fee schedule to extend the 50/50 blended fee schedule in effect from Jan. 1-June 1, 2016 to the July 1-Dec. 31, period, and have added the KE modifier back to the fee schedule file. The revised file will be available to the DME MACs for download on or after May 1, 2017.

Although the implementation date on CMS' guidance is set for July 3, 2017, it is noted that DME MACs can start reprocessing the affected claims as soon as the revised fee schedule files are loaded into their systems.

Suppliers will not need to submit any new claims or other materials.  The DME MACs will create a one-time process to validate and adjust claims using the new fee schedule, and will automatically perform a mass reprocessing of the claims.  If a supplier subsequently believes the DME MACs missed reprocessing their claims, the supplier will then need to submit a request.

The guidance also notes that a provider education article related to this issue will be available at the MLN Matters section on the CMS website shortly.  We will provide additional perspective on the guidance as it becomes available.
 
While this interim relief is welcome news for rural and non-bid area providers, AAHomecare remains committed to advocating for a longer-term solution to deliver sustainable reimbursement rates for rural and non-bid area providers.

CMS' full guidance  can be found here.