Denti-Cal rate cuts to begin Sept. 5

After a series of court decisions upholding the legality of the state’s 10 percent reduction to Medi-Cal provider reimbursement rates, the Department of Health Care Services (DHCS) has announced that it will begin implementing the cuts for Denti-Cal providers on Sept. 5.

The retroactive “clawback” of the 10 percent on fees received since the 2011 budget was enacted will be implemented at a later date.

The rate reductions were authorized in June 2011 as part of a state budget agreement between the governor and the Legislature. The reductions were quickly challenged in court by a broad health care coalition, of which CDA was a part, and were delayed since then while the legal process unfolded. That process culminated on June 14 with a final denial of the coalition’s appeal by the U.S. Court of Appeals Ninth Circuit. This final ruling enabled DHCS to move forward with implementation of the rate reductions.

The Department’s announcement states that the prospective rate reduction will be phased in by provider type, beginning with dental and medical transportation on Sept. 5 and ending with pharmacies, physicians and distinct-part nursing facilities on Jan. 9, 2014.  According to DHCS, “nonprofit dental pediatric surgery centers that provide at least 99 percent of their services under general anesthesia to children with severe dental disease” will be exempted from the cuts.  

The announcement added that recoupment of a percentage of provider payments to recover overpaid funds will begin after implementation of the prospective reductions, and that “DHCS will provide at least sixty (60) days advanced notification of scheduled recoveries.”

CDA is seeking additional information from the Department about these implementation decisions and will keep members informed of further developments.