Delays in Reimbursements Upsetting : Medical Stores Refuse to Fill Medi-Cal Orders

Some medical equipment stores in Los Angeles County are refusing to fill expensive orders from low-income disabled people because the state Medi-Cal health program is months behind in reimbursing them.

As a result, Medi-Cal recipients are finding it increasingly difficult to obtain costly but essential items such as wheelchairs and respirators that cost thousands of dollars.

“We are having a lot of trouble finding someone to supply this equipment,” said Lynn MacDonald, a physical therapist with clients in Lynwood, Glendale, Azusa and Pomona. She orders equipment for 330 clients, many of whom cannot buy what they need without help from Medi-Cal.

“I’ve been turned down by three vendors in the last year,” she said. “My clients are on hold right now for their equipment. If nothing happens by the first of the year, I don’t know what will happen.”

Stores Are in a Bind

When Medi-Cal patients bring a prescription for medical equipment to a store, the store gets tentative approval from the state and then fills the order. Once the store has given the equipment to the patient, it sends the bill to Medi-Cal.

However, a large backlog of unprocessed claims at Medi-Cal has put many stores in a financial bind. Some have waited more than 6 months to be paid for tens of thousands of dollars in equipment and repairs that they have already delivered.

“We can no longer afford to give things away, and that is essentially what we are doing,” said Sue Fitzsimmons of Abby/Foster’s West Covina store, which serves the Southeast and San Gabriel Valley areas.

Medi-Cal official William White acknowledged last month that an unusual reimbursement backlog developed in April when the state switched to a new claim-processing company. But White said that the backlog is decreasing and that things should return to normal by next year.

For more than 6 months, Medi-Cal has owed Abby/Foster’s 19 Southern California stores more than $2 million, said Bruce Burns, a vice president in charge of Abby/Foster’s Southern California operations. Abby/Foster is the largest medical supply chain in the country.

$500 Limit Imposed

So in September, Burns ordered the West Covina store to stop taking Medi-Cal orders for items exceeding $500, which includes almost all wheelchair sales and repairs, and directed Abby/Foster’s other Southern California stores to limit their Medi-Cal business.

White, chief of provider services for the state Department of Health Services, said the state is aiming to pay bills within 30 days. In the meantime, he said, medical supply stores have been asked to continue serving people on Medi-Cal until the state can catch up.

“That’s fiscally impossible,” Burns said. “If we are not getting paid and continue to provide services, we would not have enough cash to pay our bills.”

Burns said most medical supply companies are trying to work with the state to find a solution.

“But if 4 to 6 months down the road, if in fact things don’t improve, these beneficiarieswill not be able to get equipment,” Burns said.

Smaller medical supply companies without Abby/Foster’s resources are either limiting their Medi-Cal business or are taking out loans to tide them over until the state payments arrive.

One business, Riverside Medical Supply, closed its doors Oct. 1 in part because of lagging Medi-Cal reimbursements. Manager Charles E. Pennington said recently that the state program still owes his company about $30,000 to $40,000.

Lee Vyskocil, a co-owner of Universal Orthopedics in Whittier, has sold medical equipment for 35 years. She said Medi-Cal used to pay within 3 or 4 months but is now taking 6 months to a year.

As a result, Vyskocil limits herself to about five Medi-Cal wheelchair orders a month, and she usually accepts only orders from those with the most dire needs. If she did not limit the number of Medi-Cal orders she accepted for expensive items, Vyskocil said, she could take about 30 orders a month.

Customized wheelchairs can cost as much as $8,000 to $10,000, according to medical suppliers and physical therapists. And customizing wheelchairs is the norm, not the exception, because many disabled people have injuries or deformities that will worsen without special braces and other equipment.

“I am more than willing to take Medi-Cal, but we can only take it to a certain point,” she said. “When they owe us too much money in Sacramento, I have to cut off Medi-Cal until I get paid.”

Vyskocil said equipment manufacturers demand payment from stores within 30 days. “I can’t accept orders if I don’t have the money to pay ‘em,” she said.

Lewis Wheelchair in Long Beach is not able to turn away Medi-Cal business, said Barney Deichert, assistant manager. “When the majority of your business is Medi-Cal, you can hardly turn them down or you won’t have any business at all,” he said.

Deichert said that at one point, the state owed his employer $140,000, although more than half of that has since been paid.

“For a little independent, that is a lot of money,” he said. “We just borrow enough to pay overhead while waiting to get reimbursed.”

Problem Worsened

Stores all over the state are complaining about late Medi-Cal payments, said Bill Butler, president of the California Assn. of Medical Products Suppliers, a trade group representing 254 stores. Butler said the late payment problem slowly worsened over time and has become severe in recent months.

“If I were an advocate for the Medi-Cal population, I would be mad as hell,” Butler said. “This program was intended to make medical care available for everybody, but it is not. I am certain there are times when people who need equipment don’t get it.”

Patti Aguilar is a 27-year-old divorced mother whose 6-year-old Phillip has cerebral palsy and must use a customized wheelchair.

Aguilar’s regular supplier, Abby/Foster’s West Covina store, declined to take her Medi-Cal order for a bath lift, a device that lifts a person into and out of a bathtub.

“It makes me very angry,” the San Gabriel resident said. Medi-Cal is “depriving all handicapped people of the service they need. Those people in Medi-Cal should realize my kid is why they have a job. They should get off their butts and run the program correctly.”

Running Medi-Cal efficiently is exactly what the state is trying to do, White said.

The backup in the Medi-Cal system is a result of the state changing the contractors that process bills sent into the system, White said. But the problem is compounded by the fact that bills for many items used by the disabled must be processed by hand.

“Durable medical equipment almost always requires manual pricing,” White said. Prices for medical equipment used by the disabled change so often that it does not pay to have claims processed by computer, he said.

So “clean claims,” those without any paper-work errors, may take 6 months to be paid, White said.

Medi-Cal does not have a breakdown for how much of a backlog has accumulated in medical equipment. But there are figures for a category called “medical claims” that include all Medi-Cal claims except those for prescription medicines and stays in hospitals and other institutions.

According to White, there were about 1 million claims totaling $90 million pending on April 1, when the change in processing companies went into effect. By July 15, the number of medical claims pending had jumped to 1,860,000, representing a total bill of $340 million.

Things are moving in the right direction, White said, with pending medical claims down to 1,490,000, worth $170 million, as of Oct. 15.

“There is light at the end of the tunnel,” White said.

Medi-Cal encourages medical equipment stores “to deal with the Medi-Cal population and to continue with the Medi-Cal population,” he said.

Advance Payments Offered

White said he is not asking stores to provide services out of their own pockets.

“If they have cash problems, they should contact us and we will do all we can to alleviate those problems,” he said.

The state can sometimes arrange to give a store advance payments that will be paid back when the claims are processed, White said.

“Medi-Cal, even under the best of circumstances, is a difficult program,” White said. “But we don’t forget that we are here to deal with people and provide services to California’s poor population.”

But the state’s efforts are too late for Riverside’s Pennington, who is looking for a job.

“We’re just one of the little guys,” he said. “But I know from talking to other people in the business, they are hurting all over.”