The Legislature passed and the Governor has signed a new budget for 2020-21 that took effect on 7/1/20. With the prospects of a massive budget shortfall estimated between $32-$54 billion the final budget deal is based upon assumptions of significant federal support to states like California. The Governor’s approach was to make more cuts now while the Legislature preferred an approach that would make some cuts now and trigger additional cuts in the future if federal dollars do not arrive.
For DME/Supplies there are no new reductions. The optional services that were restored on 1/1/20 in the prior budget deal, which included incontinence creams and washes, were not eliminated as was suggested in the Governor’s May Revise. They continue the expanded coverage for adult but could be eliminated in July 2021 if adequate funding is not available.
This adopted budget assumes that the budget sub-committees in both Houses will do more work in their area in August to make additional changes based upon a more realistic gauge of state revenues after income taxes are due 7/15/20. CAMPS had begun efforts to seek a change to using 100% of the Medicare rural rates for all DME, eliminating the 10% cut, and recognition of the KU modifier for rehab equipment. The COVID pandemic put a stop to any real chance to do that before the budget was adopted. Leadership made clear that new costs or revenue reductions would not be considered in the budget deficit environment.
CAMPS has continued dialogue with DHCS on the 10% cut and retroactivity of the new Medi-Cal rates effective 4/15/20 and retroactive to 1/1/19. DME providers need relief.
Meanwhile the Legislature that adjourned earlier in late March did return after the expanded summer recess. Both Houses intended to reconvene on 7/13/20 with adjournment t the end of August. Their return is now delayed until at least 7/27/20 and the procedures for the remainder of the session are not clear. We will update the members once more information becomes available.
New Provider Relief FAQs Include Update on Tax Implications
May a health care provider that receives a payment from the Provider Relief Fund exclude this payment from gross income as a qualified disaster relief payment under section 139 of the Internal Revenue Code (Code)? (added 7/10/2020 – see page 2)No. A payment to a business, even if the business is a sole proprietorship, does not qualify as a qualified disaster relief payment under section 139. The payment from the Provider Relief Fund is includible in gross income under section 61 of the Code. For more information, visit the Internal Revenue Services’ website at https://www.irs.gov/newsroom/frequently-asked-questions-about-taxation-of-provider-relief-payments.
AAHomecare will continue to support the major healthcare organizations asking Congress to remove this penalty that will increase financial pressures on healthcare providers bearing the burden of the COVID-19 pandemic and ultimately impact the patients and communities they serve.
Details on Tracking Application Status Also Available
HHS has also added new information on tracking relief applications and payments to the
FAQs:
How can a healthcare provider find more information on the status of their Provider Relief Fund payment or application? (added 7/8/2020 - see page 2) Providers should contact the Provider Support Line at (866) 569-3522 (for TTY, dial 711), if they have questions about the status of their payment or application. When calling, providers should have ready the last four digits of the recipient’s or applicant’s Tax Identification Number (TIN), the name of the recipient or applicant as it appears on the most recent tax filing, the mailing address for the recipient or applicant as it appears on the most recent tax filing, and the application number (begins with either “DS” or “CR”) if they have submitted an application in the Provider Relief Fun Payment Portal.
