Brown Administration Will Implement Short-Term Delay In Medi-Cal Payments For Month of March

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By Marty Omoto
California Disability Community Action Network

The Brown Administration announced yesterday that it will implement short-term payment delays of about 2 weeks to Medi-Cal institutional providers including long term care facilities, adult day health centers, and home health agencies, for reimbursements paid during the month of March, due to a temporary severe cash flow shortage that California is facing in the coming weeks. Some institutional providers are exempt from this delay and payments to Medi-Cal non-institutional providers, such as doctors, will not be held.

State Controller John Chiang reported earlier this week that California will run out of cash by early March if immediate action is not taken to identify $3.3 billion in cash solutions.  The State normally faces cash flow problems during certain times of the year that are usually covered by short term loans. In recent years, due to the economy, the cash flow problem has been worse, forcing the State to take other measures to deal with the problem, including delays in paying Medi-Cal institutional providers.

The Department of Health Care Services, the state agency that oversees the Medicaid program (called “Medi-Cal”) in its announcement today said that the department  “…understands that this difficult decision is painful for our valued provider partners, but Medi-Cal, as the state’s second largest General Fund expenditure, must be part of the state’s budget solution.”

The department indicated it is implementing the following action in response to the cash flow problem:

1. Payments due to certain Medi-Cal fee-for-service providers on February 27, issuing them instead on March
2. Reimbursement for Medi-Cal institutional providers, except for clinics, designated public hospitals, and Local Educational Agencies (LEAs), will be held based on the following schedule:
3. Payments to those institutional providers scheduled for a warrant release date of March 1, 2012 (Electronic Funds Transfer [EFT] date of March 5, 2012) will be held until the warrant release date of March 15, 2012 (EFT date of March 19, 2012) and will be paid along with all services normally scheduled for payment that week.
4. Payments to those institutional providers scheduled for a warrant release date of March 8, 2012 (EFT date of March 12, 2012) will be held until the warrant release date of March 22, 2012 (EFT date of March 26, 2012) and will be paid along with all services normally scheduled for payment that week. 
5. Payments to Medi-Cal non-institutional providers will not be held. 

Impact of Delay Will Vary Depending on the Provider

The impact of the payment delay will have different impacts depending on the specific provider. Some larger providers may have cash reserves or loans that will enable them to handle the 2 week delay. Other smaller providers operating on much leaner budgets and without access to short term loans or cash reserves – some of which are gone due to previous budget reductions and cutbacks – will have a difficult time making ends meet, including payroll.

The direct impact to the Medi-Cal recipients the providers serve, including hundreds of thousands of people with disabilities, mental health needs, the blind, seniors and others will also vary and is less certain, depending on the provider.  

LIST OF MEDI-CAL INSTITUTIONAL PROVIDERS IMPACTED BY DELAY IN PAYMENT

According to announcement by the Department of Health Care Services (DHCS), the State will hold reimbursement to the following Medi-Cal institutional providers (Please note that the list below is limited to providers whose claims are processed by the Medi-Cal Fiscal Intermediary (FI):

• Medi-Cal Institutional Providers
• Adult Day Health Care Centers (ADHC)
• Assistive Device and Sick Room Supply Dealers
• Blood Banks
• Clinical Laboratories
• Fabricating Optical Laboratory/Prison Industry Authority (PIA)
• Home Health Agencies (HHA)
• Community Hospital Outpatient Departments
• Community Hospital Inpatient (with the exception of designated public hospitals)
• Long-Term Care (LTC) facilities
• Subacute Care – LTC
• Ground Medical Transportation
• Genetic Disease Testing
• Air Ambulance Transportation Services
• Certified Hospice Service
• Home and Community Based Services (HCBS) Nursing Facilities
• Mental Health Inpatient
• County Hospital Inpatient (with the exception of designated public hospitals)
• County Hospital Outpatient
• Multipurpose Senior Services Program (MSSP)
• Residential Care Facilities for the Elderly

MEDI-CAL INSTITUTIONAL PROVIDERS EXEMPT FROM PAYMENT DELAY

The Department of Health Care Services reported that the following institutional providers are exempt from the temporary payment delay:

• Indian Health Clinics
• Rural Health Clinics
• Federally Qualified Health Centers
• Free Clinics
• Community Clinics
• Chronic Dialysis Clinics
• Multi-Specialty Clinics
• Surgical Clinics
• Exempt from Licensure Clinics
• Rehabilitation Clinics
• County Clinics Not Associated with a Hospital
• Birthing Centers – Primary Care Clinics
• Clinic Otherwise Undesignated
• Alternate Birthing Centers – Specialty Clinics
• Expanded Access to Primary Care Clinics
• Designated Public Hospitals
• Local Education Agencies

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Marty Omoto is Executive Director of the California Disability Community Action Network, a non-partisan link to thousands of Californians with developmental and other disabilities, people with traumatic brain injuries, the blind, the deaf, their families, community organizations and providers, direct care, homecare and other workers, and other advocates to provide information on state and local public policy issues.