Draft Joint letter to DHCS re impact of DME rate reductions

Mr. Robert Ducay
Assistant Deputy Director Health Care Financing
Department of Health Care Services

Dear Mr. Ducay,

We the undersigned are existing enrolled providers of DME in the Medi-Cal program. We are aware of the pending State Plan Amendment that would change the Medi-Cal reimbursement rates for most DME items, other than wheelchairs and accessories, to 80% of the Medicare non-rural rates.

The typical reductions for many DME items will be substantial likely 50-70% and include the further 10% provider rate reduction as a result of AB 97. If these rates are enacted and there is also a retroactive application and claw back to 1/1/19 we will no longer be able to provide services to Medi-Cal beneficiaries. This level of reimbursement will not allow our companies to be financially able to provide equipment and services. Medi-Cal patient access to DME is already being impacted under the current rates and these cuts will further reduce access.

We urge you to use your administrative adoptions to eliminate the 10% cut and pursue budget or legislative changes to eliminate the use of the 80% of Medicare methodology. Rates should be based upon 100% of the Medicare rural rate.