CMS Approves Medi-Cal 10% Provider Rate Cut

Today DHCS announced that CMS had approved the Medi-Cal State Plan Amendments to implement a number of budget driven changes including a 10% provider rate reduction. DHCS indicated that CMS was satisfied with the information they provided that demonstrates no appreciable impact on beneficiary access to providers after these reimbursement reductions. They did create a small number of exceptions to the reductions for clinics, services to children, and pediatric sub-acute facilities.

DHCS states that the 10% reduction will be retroactive to June 1, 2011.  For radiology it is further complicated by the rate reduction to no more than 80% of Medicare that was supposed to be implemented a year ago on 10/1/10. That has never occurred and we have to determine how DHCS will approach that issue and the new 10% reduction. We will be providing additional information on that issue as it becomes available. They have yet to announce exactly when the claims processing system will be altered to recoup those prior payments. We will monitor additional potential  legal actions to block implementation similar to the injunction on the 2009 provider rate reduction. There may be additional avenues.