DHCS released the notice reprinted below on initiation of the 10% provider rate cuts with dates of implementation by provider type. You will note that they indicate the recoupment of overpayments going back to June 1, 2011 is still not finalized and that it will occur after all the prospective reductions are implemented and there will then be a 60 day notice. CAMPS will engage with DHCS to get more specifics on implementation.

Implementation of AB 97 Reductions

The Department of Health Care Services (DHCS) is announcing today the implementation plan for the provider payment reductions required pursuant to Assembly Bill 97 (Chapter 3, Statutes of 2011). AB 97 requires DHCS to implement 10% provider payment reductions to most categories of services in Medi-Cal fee-for-service (FFS) as well as actuarially equivalent reductions in Medi-Cal managed care.

DHCS received federal approval for the reductions, effective June 1, 2011, but has been prevented from implementing many of these reductions due to a court injunction in the Managed Pharmacy Care, et al v. Kathleen Sebelius, et al case. On June 14, 2013, the United States Court of Appeals for the Ninth Circuit denied the plaintiffs' motion for a stay of mandate in this case, allowing the implementation of all of the AB 97 Medi-Cal provider 10% payment reductions.

Providers affected by the earlier court injunction that blocked the payment reductions will soon have a 10% prospective payment reduction applied to all claims they submit for services. The chart below shows the date on which providers will begin to see the reductions.

Additionally, since the 10% payment reduction is effective for services provided on or after June 1, 2011, DHCS will also begin recouping a percentage of provider payments to recover overpaid funds during this retroactive period. These retroactive payment recoveries will not occur until after the prospective 10% payment reductions are implemented. DHCS will provide at least sixty (60) day advanced notification of scheduled recoveries.

FFS Payments

In order to preserve and protect access to care for Medi-Cal members, DHCS is also announcing the following provider payment reduction exemptions, subject to federal approval of State Plan Amendments (SPA):

• Nonprofit dental pediatric surgery centers that provide at least 99% of their services under general anesthesia to children with severe dental disease under age 21 will be exempted prospectively from the 10% payment reduction. After required public notice, the effective date of this prospective exemption will be in the near future.

• Distinct part nursing facilities, Level B, classified as rural or frontier, based upon the California Medical Service Study Area's definitions, will be exempted prospectively from the 10% payment reductions and will not be subject to the rate freeze at the 2008-09 levels on a prospective basis. After required public notice, the effective date of this prospective exemption will also be in the near future.

• Certain prescription drugs (or categories of drugs) that are generally high-cost drugs used to treat extremely serious conditions, such as hemophilia, multiple sclerosis, hepatitis and others will be exempt from the 10% payment reduction. DHCS has submitted a SPA (SPA12-014) to exempt these categories of drugs, with an effective date for the exemption of March 31, 2012.

Managed Care

As noted above, DHCS is required to make actuarially equivalent reductions to Medi-Cal managed care. Such reductions will be effective on October 1, 2013, on a prospective basis only. DHCS previously announced that given the differences between managed care and FFS, reductions to pharmacy would not be applied in managed care. DHCS is now announcing that specialty physician services in Medi-Cal managed care will not be subject to a reduction. Guidance on the Medi-Cal managed care implementation will be issued soon in an All Plan Letter.

Future information may be found at www.medi-cal.ca.gov.

Beginning in 2015, Medicare eligible professionals, eligible hospitals, and critical access hospitals that do not successfully demonstrate meaningful use will be subject to a payment adjustment. CMS experts on the call will explain who will be affected by payment adjustments, how to apply for an exception if you are eligible, and how the payment adjustment will be applied.

Agenda
The following topics will be discussed on the call:

• Who is subject to payment adjustments
• Who can request an exception
• Adjustments for eligible professionals
• Adjustments for eligible hospitals and CAHs

A link to the slide presentation will be posted prior to the call.

Date and Time: Thursday, August 15; 1:30pm-3pm ET

Registration

To register for the National Provider Call, please visit the MLN Connects Upcoming Calls webpage. Registration will close at 12:00 p.m. ET on the day of the call or when available space has been filled; no exceptions will be made, so please register early.

Note: Providers which are not eligible for the Medicare EHR Incentive Program, or who successfully attest to meeting meaningful use for the Medicaid EHR Incentive Program, will not be subject to payment adjustments.  

For More Information

Sen. Ed Hernandez, Chair of the Senate Health Committee had introduced three bills to expand the scope of practice for Nurse Practitioners, pharmacists and optometrists. His motivation is to make available a wider range of health care professionals in advance of ACA rollout and the coverage of a larger number of uninsured.

This week two of the bills dealing with NPs and pharmacists are moving to final consideration in the Assembly after substantial amendments and a move to neutrality by the CMA. The NP proposal would not allow totally independent practice but allow a broader scope when an NP works within a hospital or clinic in a collaborative role with a physician. The pharmacist bill allows higher credentialed pharmacists to order and interpret lab tests for drug therapy monitoring and an expanded role in providing vaccinations.

The third bill dealing with optometrists was not taken up in the Assembly this week and is now on a two year track.

As the Legislature enters its final month of session for the year there are rumors that the Consumer Attorneys of Ca. may amend a bill to raise the current MICRA cap on non-economic damages. No bill has surfaced yet and the chances of passage seem unlikely due to the ongoing efforts of the coalition to preserve MICRA. The trial attorneys have indicated that they will seek a ballot initiative to raise the cap on a future statewide ballot. The initiative would be required to go into circulation  and obtain about 800,000 signatures to get the required number for qualification. It is early on in that process and we will keep you informed on any progress.