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California HME Update
Budget Deal Announced
 

This afternoon the Governor held a news conference with Democratic leadership announcing the budget deal. There is nothing in the agreement regarding the Medi-Cal provider rate reductions or the claw back for DME/ Medical supplies either retroactively or prospectively. The Legislature's version of the budget would have eliminated 5% of the 10% provider rate cut and 5% of the claw back in April 0f 2016. The only action regarding rates in the budget agreement was to eliminate the 10% cut for dental services.


 

The Governor did announce that there would be were two special sessions of the Legislature; one on infrastructure and the other on the health care delivery system. The latter would focus on a bill to enact the Managed Care Organization ( MCO) Tax to provide permanent funding for Medi-Cal including provider rate increases "that will increase access to services". There has been an MCO tax on the premiums paid for Medi-Cal managed care plans but recent federal regulations require that the tax be applied to all plan premiums.


 

The special session begins on June 19th and will run concurrently with the regular session. The Governor wants to have this discussion outside of the budget process, which means the MCO money is what is available for any changes in provider rates. CAMPS will continue to advocate for relief from both the provider rate reductions and the claw back. This is not good news in terms of short term relief but the reality of the Legislature's solution was that it was insufficient since only provided partial relief for a few months. Further action would have been required in the next budget cycle to provide greater relief.


 





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