Last week 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 laboratory payments made between 2011-2014. DHCS has interpreted that the 10% rate cut for labs implemented in 2011 while a new lab reimbursement methodology was being developed is in addition to the 10% across the board provider rate reduction. 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 of 2016. The only action regarding rates in the budget agreement was to eliminate the 10% cut for dental services. This only applies to fee for service Medi-Cal and has not yet been implemented.

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 began 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. CSP 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.

Last week we asked that you reach out to members of the Senate Health Committee indicating our opposition to AB 533 (Bonta) on out of network billing and essentially a ban on balance billing. The bill was set to be heard on 7/1 but was pulled from the agenda and reset for 7/15. There are also amendments that are under discussion and we will communicate those changes. If you did send an email or make calls we appreciate your effort in doing so and will update you soon on the changes and whether our opposition has been removed.

Earlier this year the CSP became aware of an issue with Lab Field Services legal counsel interpretation of state law that would have prohibited clinical lab use of EQC, which is recognized by both CMS and CAP as an approved quality control program. The problem was that state law had never been updated since 2004 to recognize this QA tool even though it has been in use for many years by labs in California. CSP contacted LFS and sought agreement to "fix" California law on an expedited basis to eliminate labs being out of compliance if inspected by LFS and to avoid large costs to individual labs to eliminate the use of EQC.

ACA Billing and Enrollment Requirements for ORP Providers

June 25, 2015

Based on the Affordable Care Act (ACA) of 2010, providers are now required to list the National Provider Identifier (NPI) and name of the provider who ordered, referred or prescribed the goods or services being billed. In addition, all ordering, referring or prescribing (ORP) providers must be enrolled as participating providers in Medicare or Medi-Cal, with a Type 1 (individual) NPI, even if these providers do not send claims to Medi-Cal for the services they provide.

If the ORP provider identified on the claim is not enrolled in Medi-Cal or Medicare, claims for reimbursement of the goods or services provided in filling the order, prescription or referral from the ORP provider will not be paid.

Providers can find more information on the Provider Enrollment Division page of the Department of Health Care Services website.