Exemption Granted for Pediatric Day Health

by David Gorn

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For months, Terry Racciato has been trying to get the state to reverse its imposition of a 10% Medi-Cal provider rate cut on the 14 pediatric day health care centers in California.

Racciato, who runs two PDHC centers in the San Diego area, has been arguing with the Department of Health Care Services that pediatric day health care services should be exempted from that 10% rate cut, as home health agencies were.

On Friday, the state agreed.

"The centers were not exempted because we did not have all of the information from them about the potential impact of the reductions until after the reductions were implemented," according to a written statement from DHCS spokesperson Norman Williams. "Once the centers reached out to us and shared their information, we investigated as a part of our ongoing commitment to ensure access is not unacceptably impacted. Our analysis led us to conclude that an exemption is appropriate."

The state's new course means PDHC centers will remain open, Racciato said.

"This is great news for us. And I think this was hard for [the state] to do," Racciato said. "So maybe we can put this one in the win column."

When the state first imposed the 10% Medi-Cal provider rate cut, home health agencies were exempted from those cuts because of access issues. However, up until now, the state felt that pediatric home health care services could be picked up by other providers, presumably by those home health agencies.

"We have reviewed data and preliminarily believe that your consumers will be able to receive access to services from other entities/providers if you were to close," DHCS director Toby Douglas recently wrote to the San Diego-area PDHC centers. "Obviously, we do not want your center to close and really value your participation in the program.  But we have to look at access from the beneficiary perspective and if they can receive like services from other providers.  Our preliminary analysis shows that they will be able to continue to receive services from others."

Home health agencies disagreed with that assessment.

"That's impossible for home health [because] that's not what we do," according to Dave Dial of the California Association for Health Services at Home, who also runs ProCare home health agency in Sacramento. "About 90% of home health agencies' business is not Medi-Cal business to begin with. Most of our business is Medicare, not Medi-Cal. And of the agencies that do Medi-Cal, a small percentage of them do shift nursing [required for PDHC patients]."

So, according to Dial, even though there are so few of the pediatric centers in California, the loss of the PDHCs would create a definite access problem for the state.

"And most of these kids, they're the frailest of the frail," Dial said. "For me, when you start messing with the kids, that gets my heart. That disturbs me. And even budgetarily, it doesn't make sense. To the state, this is budget dust."

The state's decision to exempt PDHCs still does leave one question open, though. Since the exemption came months after the rate cut was implemented, that means the PDHC centers may still need to pay that 10% difference, going back retroactively to June.

In the case of Racciato's two centers, she said, that's about $180,000 -- and that's money the centers don't really have. But she also is extremely grateful for the state exemption, and is hoping the policy switch can be made retroactive to June.

Williams said that question is still up in the air. So, first things first, he wrote: "We are working now to process and enact that exemption."


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