Governor Jerry Brown last week signed a $139 billion California budget for the 2018-2019 fiscal year. The budget continues the Administration’s commitment to using the Proposition 56 tobacco tax funding to provide supplemental payments for Medi-Cal providers, with $500 million in tobacco tax funds allocated to improve provider reimbursement through supplemental payments. The total funding for provider payments is approximately $1.3 billion.

DHCS plans to allocate the tobacco tax funds to increase payments for a total of 23 CPT codes, which includes 10 new preventive CPT codes. The supplemental rate proposal is contingent on federal approval, and would be effective July 1, 2018.

DHCS has proposed increasing the supplemental payment for the currently eligible CPT codes to 85 percent of Medicare (a 40 percent average increase in payments for these eligible codes compared with 2017 – 2018 payment levels). The 10 newly added preventive CPT codes would be paid at 100 percent of Medicare.

The supplemental payments would apply to both fee-for-service and managed care delivery systems. A full list of the eligible CPT codes is listed below.

The supplemental rate proposals are effective July 1, 2018, contingent on receipt of federal approval, which was requested through a State Plan Amendment on June 29, 2018.  

* The supplemental payment on these four codes remains unchanged with their existing supplemental payment already between 90 – 120 percent of Medicare.