DHCS begins recouping retroactive Medi-Cal radiology cuts

May 11, 2016
Area(s) of Interest: Payor Issues and Reimbursement 

In 2010, the California state budget included cuts to Medi-Cal radiology rates, stipulating that the maximum reimbursement rates for radiology services could not exceed 80 percent of the Medicare rate for the same or similar services. The Department of Health Care Services (DHCS) did not, however, implement the rate reduction until July 20, 2015, with retroactive cuts going back to October 2012.

To recoup the retroactive cuts, DHCS recently announced that it would be offsetting overpayments against amounts due. Physicians affected by this retroactive recoupment were notified by DHCS in late March.

The California Medical Association raised concerns with DHCS about the financial burden that such a large recoupment would place on practices. As a result, DHCS agreed to cap the overpayment withholding at 20 percent of the physician's reimbursements until the total amount of retroactive overpayments are reached. Standard practice for DHCS is to withhold 100 percent of physician reimbursements until the total amount is repaid.

Just last week, affected physicians began receiving "zero pay" notices with patient level detail of all their claims impacted by the retroactive radiology cuts. These notices understandably have caused some alarm among physician practices.

These notices do NOT mean that physicians’ Medi-Cal reimbursements will be withheld until the retroactive overpayments are recouped. These notices simply provide an accounting of all the affected claims and the total that will be recouped. The actual recoupment will begin with the following week's checkwrite, and will be capped at 20 percent of each check until the total amount due has been recouped. Your adjusted payment, after the 20 percent recoupment, can be found on line 11 of the "individual financial summary."

In cases of financial hardship, DHCS is willing to consider extended payment options. Physicians interested in discussing this option are encouraged to contact Medi-Cal at (800) 541-5555. There are three prompts. The first one will require language selection. At the second prompt, select 1 for provider and then select option 5 for other general billing inquiries.

Contact: Kris Marck, (916) 551-2037 or kmarck@cmadocs.org.


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