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January 31, 2013  


Medi-Cal Transition of Dual Eligibles to Managed Care Plan      

We have written previously about DHCS plans to continue moving Medi-Cal enrollees to managed care. It is known as the Coordinated Care Initiative (CCI) . They are one of several states that will operate under a CMS waiver to move dual eligible beneficiaries, those that are both Medi-Cal and Medicare eligible, into local managed care plans. Those could be county operated health systems  or private plans like Anthem or HealthNet. Last year DHCS transitioned Seniors and Persons with Disabilities ( SPDs), and the plan was to have begun transitioning dual eligible in June of 2013 in a number of large counties.


In the Governor's proposed budget for 2013-14 released on 1/10/13 he announced a revised schedule for this transition that will delay implementation for all counties and in the case of LA county will actually extend the transition to 18 months rather than 12. Beneficiaries are transitioned in their birth month and typically receive a notice of the change 3 months prior to that. A beneficiary can choose to opt out of including their Medicare coverage into the managed care plan but must transition for the Medi-Cal portion. If a  patient opts out they could continue their Medicare coverage in a Medicare Advantage plan or fee for service.  DHCS must still gain CMS approval of the pilot elements so it is possible that there could be further delays. The specifics of the counties involved and the new projected start dates are as follows;

  • Timeline. The proposed budget calls for implementing both parts of the CCI, the duals demonstration and transition to managed care for Long Term Supports and Services, in September 2013.
    • This means that the first notices that any beneficiaries would receive about these transitions would come no earlier than June 2013.
  • Enrollment Phase-in. There are eight counties in the CCI: Alameda, Los Angeles, San Bernardino, San Diego, San Mateo, Santa Clara, Orange and Riverside. According to the budget announcement:
    • In Los Angeles County, enrollment will phase in over 18 months.
    • In San Mateo, enrollment will occur all at once in September 2013.  
    • For all other counties, enrollment will phase-in over 12 months.  

Medi-Cal Change to Clinical Lab Reimbursement Methodolgy 


We previously informed you that a last minute addition to the 2012-13 state budget called for a reassessment of the current Medi-Cal reimbursement rates for laboratory services. The budget provisions call for an immediate 10% reduction in reimbursement rates and the use of a stakeholder process to gather data from current lab providers on payment rates from other payers. The CSP has participated in three stakeholder meetings to date. The CSP has submitted multiple sets of comments as the proposal has been altered in draft form. Though originally providers would have had to submit data on payments for services by other payers by 1/31/13 that date was pushed back to 3/31/13 in the latest version and may be even later. The CSP's major comments on the DHCS proposal and changes to date are as follows;

  • The original proposal would have required that all providers who billed for an anatomic or clinical pathology 80000 series code to report what every payer reimbursed them for that specific code. The latest version said report only for your top 5 payers by volume of the CPT code to account for 80% of your payments. If your top 5 don't account for 80% than the maximum would move to no more than 10. It still would apply to all biller of lab codes including physician office labs, hospital outpatient labs etc.
  • Since submission would be required for hospital based pathologists, DHCS would need to recognize modifiers, such as -26, in evaluating payment amounts which reflect PC, TC and global payments. We continued to seek to exempt -26 payments  and this last time were supported by the hospitals who sought to exclude both in and outpatient payments. We are hopeful that the next version will deal with our objections.
  • Data elements currently require submission of NPI numbers of the entity drawing/gathering the specimen, which presents special problem for AP and where the biopsy specimen was removed. This requirement was eliminated from the last version.

The CSP will participate in another stakeholder meeting in February and keep you informed on the timing and requirement for payment data submission.


Palmetto Loses Appeal to Remain Ca. Part B Claims Administrator


Late last year CMS announced that Noridian had been awarded the new contract to be the Part B MAC for the area that includes California. Palmetto the current MAC had appealed that decision and award. The appeal was denied this month and Noridian will assume this function in June of this year. In the meantime Palmetto will continue to process claims.


Report on Insurer's Market Share in California


In 2011, Kaiser Permanente had the largest share of California's $59 billion health insurance market for employers and individuals, at 40%, according to a report by Citigroup analyst Carl McDonald.


California Findings


The report found that Kaiser in 2011 collected $23.3 billion in premiums and served 5.5 million commercial policyholders in California.

Other insurers with large market shares in California were:

  • Anthem Blue Cross, which had a 23% market share;
  • Blue Shield of California, which had a 14% share;
  • Health Net, which had a 9% share; and
  • UnitedHealth Group, which had a 5% share


California Society of Pathologists
One Capitol Mall Suite 320
Sacramento, CA 95814 
Tel : 916-446-6001
Fax :  916-444-7462