The California Health Care, Research and Prevention Tobacco Tax Act of 2016 (Prop 56) created new revenues dedicated to the Medi-Cal program. Physicians receive supplemental payments in both fee-for-service and Medi-Cal managed care when providing Medi-Cal services under certain CPT codes. A total of $325 million was allocated for physician payments in the budget for 2017-18, with $488 million proposed for 2018-19.

The California Department of Health Care Services (DHCS) began disbursing supplemental fee-for-service payments in January 2018 and completed the issuance of retroactive payments (dating back to July 1, 2017, dates of service) in March 2018.

Federal approval of the supplemental Medi-Cal managed care payments was delayed, which resulted in delayed payment for Medi-Cal managed care services. DHCS issued an All Plan Letter that contained instructions for managed care plan distribution of the funds on May 1, 2018,  and began dispersing the funds to the plans as part of its capitated payments in May.  

As a result of advocacy by the California Medical Association (CMA), DHCS is requiring managed care plans to ensure that Prop 56 supplemental payments are issued to providers within 90 calendar days of the date the plan receives the funds from DHCS. This includes both the go-forward payments and the retroactive payment for clean claims or accepted encounter data with dates of service between July 1, 2017, and the date the plan received the Prop 56 funds.

DHCS also included language suggested by CMA requiring plans to have a formal process to resolve provider grievances related to the payments, as well as a designated point of contact for provider questions, which will be published on the DHCS website.

Medi-Cal managed care plans are also required to have a process to communicate with providers about the payment process that must, at a minimum, include how payments will be processed, how to file a grievance and how to determine who the payor will be.

Since capitated payments to plans are disbursed throughout the month, physicians may not start seeing the supplemental payments until late August (i.e., 90 days after the plans received the money).

Physicians with questions can contact CMA’s Reimbursement Helpline at (888) 401-5911 or economicservices@cmadocs.org.