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Assembly Bill 97 Provider Payment Reductions

June 25, 2013

Managed Pharmacy Care, et al v. Kathleen Sebelius, et al
On June 14, 2013, the United States Court of Appeals for the Ninth Circuit denied the plaintiffs’ motion for a stay of its mandate in this case, clearing the way for California to implement Medi-Cal provider 10 percent payment reductions.

The specific implementation dates for the reductions and recoupments are still under development. The Department of Health Care Services (DHCS) will provide more definitive implementation dates as soon as these dates are known. 

Background
On May 24, 2013, the Ninth Circuit denied the plaintiffs’ request to rehear a December 2012 federal appellate court decision that lifted four preliminary injunctions against payment reductions for certain Medi-Cal providers. The injunctions had prevented DHCS from implementing Assembly Bill 97 payment reductions for services rendered on or after the date injunctions were issued. The four injunctions impacted AB 97 payment reductions for the following services:

  • Emergency and Non-Emergency Medical Transportation
  • Pharmacy
  • Durable Medical Equipment
  • Medical Supplies
  • Physician and Clinic Services for Adults
  • Dental Services
  • Distinct-Part Nursing Facilities Level B (DP/NF-B)

Please note that the 10 percent reduction for DP/NF-B is calculated based upon payment rates that were in effect in 2008 – 2009.

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