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Senator Nellie Pou, D-Passaic and Bergen, asks a question during a Senate Budget and Appropriations Committee hearing on the Governor’s proposed FY 2012 Budget.

Bill Would Set Negotiation Process Between Medicaid Managed Care Organizations and Service Providers

TRENTON – A bill sponsored by Senator Nellie Pou and Senate Majority Leader Loretta Weinberg that would open up a dialogue between Medicaid home health care service providers and Medicaid insurance providers to ensure that cost saving measures do not translate into quality of care cuts received final Legislative approval today and now heads to the Governor’s desk.

“A Medicaid managed care organizations’  unilateral cuts in reimbursement rates for providers of home health services could cause an unfair squeeze to an industry that provides vital services to sick and elderly patients,” said Senator Pou, D-Passaic and Bergen. “Providing an opportunity to discuss the obstacles and needs associated with providing these services will provide the MCOs with a clear understanding of the long-term negative effects that these cuts can cause on the quality of care individuals are receiving. Through this legislation, we can bring all interested parties to the table to begin a negotiating process.”

The bill, S-2284, creates a process to ensure good-faith negotiations between Medicaid managed care organizations (MCOs) and home health care providers. The bill requires that prior to a reduction in reimbursement rates for services, the MCO would need to meet individually with home health care providers who would be affected and who deliver personal care assistant services or home-based supportive care services in aggregate to no fewer than 25 percent of the total clients receiving these services under managed care plans.

“These cuts could reduce rates to unsustainable levels and restrict access to care making the Medicaid model almost impossible to operate,” said Senator Weinberg, D-Bergen. “Long-term, it could convince some providers to stop participating in the Medicaid program, limiting access for some of our state’s most vulnerable population to care and resulting in a loss of health care jobs. Creating a transparent and open process for which these adjustments can be discussed and negotiated will provide a sense of cooperation among the MCOs and the home health care agencies.”

The MCO would  have to provide written certification  to the Division of Medical Assistance and Health Services within the Department of Human Services and provide an assurance that meetings have occurred, the name of the home health care providers attending the meeting and the number of clients receiving services under the MCO plan. The MCO would be required to wait an additional 90 days after the certification is received by the Division before implementing any reduction in reimbursement rates.

The Senate concurred with Assembly amendments 36-0 and now the bill heads to the Governor’s office.

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