The Centers for Medicare and Medicaid Services (CMS) recently approved State Plan Amendment (SPA) 17-030 submitted by the California Department of Health Care Services (DHCS), allowing for the distribution of supplemental payments to physicians funded by the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (Proposition 56).

SPA 17-030 authorizes supplemental payments for certain fee-for-service physician services provided between July 1, 2017, and June 30, 2018. The supplemental payments are for new and established patient office/outpatient visits, psychiatric diagnostic evaluations, psychiatric diagnostic evaluation with medical services and psychiatric pharmacological management services as identified by the CPT codes indicated.

Fee-for-service providers billing the identified CPT codes will receive the associated supplemental payment identified per claim, in addition to whatever other payment they receive from DHCS. No change to billing is required. (Note: the supplemental payment is in addition to the amount you are currently reimbursed.)

Retroactive payments for eligible services dating back to July 1, 2017, will be handled separately through the Erroneous Payment Correction process. The timeline for retroactive payments is not yet available.

Distribution of supplemental payments to physicians providing services to Medi-Cal managed care patients is still pending CMS approval.

Issuance of these supplemental payments represents a significant victory in the California Medical Association’s (CMA) fight to regain the majority of the funds dedicated to physicians through the Prop 56 tobacco tax funds that were intended to improve access to care for Medi-Cal patients. As CMA previously, Gov. Jerry Brown’s 2017-18 preliminary budget proposal pulled $1.2 billion in Prop 56 tobacco tax to use for state general fund obligations. Through CMA’s leadership and advocacy efforts, California’s Senate and Assembly both rejected the Governor’s proposal and laid out a different framework for appropriating tobacco tax revenues into the final budget.

In June 2017, state legislators approved a state budget that provided over $1 billion ($546 million in state funds plus a federal match) for the 2017-18 fiscal year to improve provider payments to physicians who participate in Medi-Cal fee-for-service or managed care.

Physicians with questions can contact the Medi-Cal Telephone Service Center at (800) 541-5555 or CMA’s Reimbursement Helpline at (888) 401-5911 or economicservices@cmadocs.org.