Important: Public input on this controversial amendment must reach the DHCS no later than Monday, July 27, 2020, to guarantee consideration before SPA 20-0010 is submitted. See various ways to contact the DHCS at the end of this article.
The Department of Health Care Services (DHCS) plans to submit its State Planned Amendment (SPA) 20-0010 to the Centers for Medicare & Medicaid Services (CMS). The amendment seeks federal authority to adjust specific Medi-Cal fee-for-service reimbursement rates for clinical laboratory services, and it’s drawing concern from the laboratory community.
SPA 20-0010 would obtain approval to adjust reimbursement rates per the Welfare and Institutions Code section 14105.22, which requires reimbursement to not exceed the lowest of:
- The amount billed
- The charge to the general public
- 80% of the lowest maximum allowance established by the federal Medicare program for the same or similar service
- A reimbursement rate based on an average of the lowest amount that other payors and other state Medicaid programs are paying for similar clinical laboratory or laboratory services
The DHCS estimates that the annual aggregate Medi-Cal expenditures for clinical laboratory or laboratory services will decrease by approximately $11.7 million in total funds. At the same time, the California Clinical Laboratory Association (CCLA) said that the amendment would “drastically lower” Medi-Cal reimbursement rates.
With the California legislature actively working on legislation to remove the 80% of Medicare cap on Medi-Cal clinical laboratory reimbursement rates, CCLA is asking at the very least that the DHCS postpone submission of the amendment until the California legislature finishes considering the issue.
The DHCS estimates that the annual aggregate Medi-Cal expenditures for clinical laboratory or laboratory services will decrease by approximately $11.7 million in total funds. The California Clinical Laboratory Association (CCLA) said in a prepared response that the amendment would "drastically lower" Medi-Cal reimbursement rates—making the Medi-Cal rates significantly lower than both the national and California market rates.
“CCLA adamantly opposes this proposal,” wrote letter co-authors Michael J. Arnold, Legislative Advocate, and Kristian E. Foy, Legal Counsel. “As you know, federal law requires that DHCS ensure that Medi-Cal patients are given access to the services that California’s clinical laboratories provide that is at least equal to the care and services available to the general population in California. Implementing SPA 20-0010 will result in Medi-Cal reimbursement rates for all tests that are lower than 80% of the new PAMA rates, which will be significantly lower than the DHCS rates that have been developed by DHCS for the last few years under the California-specific process implemented by A.B. 1494 (codified at Welfare & Institutions Code section 14105.22). Adopting such low rates for California (especially with the AB 97 10% payment reduction, which lowers payments even more) will threaten the ability of many California clinical labs to continue to provide fee-for-service testing to California’s Medi-Cal patients.”
Pressure to Withdraw
The CCLA recently sent a strongly worded letter to DHCS administrators, asking them to withdraw the amendment.
The CCLA’s letter targets DHCS’s plan to reduce the current, market-based clinical laboratory rates applicable in California in any instance where the California rate exceeds 80% of the new, lower Medicare rates for clinical laboratory services recently developed under the Protecting Access to Medicare Act (PAMA).
To convey your concerns about SPA-20-0010, email comments to PublicInput@dhcs.ca.gov, or send written comments to: Department of Health Care Services Fee-for-Service Rates Development Division P.O. Box 997413, MS 4600
Sacramento, California 95899-7417.
Please indicate SPA 20-0010 in the subject line or message.