CSP Pushes to Repeal 10% Medi-Cal Provider Rate Cut for Pathology/Lab - Final Budget Action

The CSP has taken leadership in establishing a coalition of medical specialty societies and the CMA to repeal the current Medi-Cal 10% provider rate cut from 2011. The cut was made in 2011 at a time of large budget deficit that triggered a number of cuts to Medi-Cal and other state spending. It has continued at a time of massive state budget surpluses and Medi-Cal reimbursement is recognized as among the lowest rates in the US. Medi-Cal enrollment is now almost $16 million with 1 of every 3 Californians is on Medi-Cal.

The exemptions from the 10% cut has only been applied to certain types of services and is within the discretion of DHCS to exempt certain providers. To date most physicians services, including all pathology services, continue to be subject to the 10% reduction.

The elimination was included in the Legislature’s version of the state budget with an estimated annual cost of $182M. Then the final negotiations between Legislative leadership and the Governor occurred behind closed doors to resolve any differences. Unfortunately , the Governor/ Administration did want to provide relief for all providers/services based upon the ongoing fiscal impact and instead expanded the relief to limited provider types. The budget trailer bills AB 184/ SB 184 are the vehicles for the Medi-Cal provisions and were passed today. There is no relief for pathology/lab services or other physician services. The 10% was only eliminated for COVID related lab testing. It is beyond frustrating but the Governor is fixated on doing only one time expenditures. The relief he allowed does include some the limited services /providers like nurse mid-wives, podiatrists, hearing aid dispensers but is very narrow.

Status of CSP Demand to LA Care on

Payment of Clinical Pathology

In April CSP sent a demand letter to LA Care over their change in policy on the recognition of the Professional Component -26 modifier for reimbursement of clinical pathology services for their Medi-Cal patients.

In October LA Care, one of the largest Medi-Cal Managed Care Organizations, issued a notice indicating that they would no longer recognize the -26 modifier on clinical pathology for reimbursement. CSP had two meetings with LA Care objecting to this change and indicating that Medi-Cal policy clearly recognizes reimbursement for hospital based pathologists and further that Medi-Cal policy on payment to hospitals usually excludes any reimbursement for the professional component for pathologists services.

Despite this strong policy support LA Care had informed the CSP that they would consider the information but would not make any changes to their announcement for now. Pathology groups had begun to experience denials from LA Care beginning in January.

CSP engaged outside counsel and sent a demand letter to LA Care requesting them to reverse the new policy. The letter again provided the existing Medi-Cal Fee For Service policy, the general exemption of physician professional fee from Medi-Cal hospital APR-DRG program, and the recognition in CPT of the professional component modifier for pathology services.

We still have no resolution and this week the CSP filed a formal complaint with both the Department of Health Care Services and the Department of Managed Health Care. Both agencies have jurisdiction over LA Care. We know that LA Care had reached out to DHCS to confirm the current pathology payment policy and we preemptively reached out to DHCS to confirm the origin and rationale for the methodology.

SAVE THE DATE for the CSP 75th Annual Meeting!