On January 1, 2024, the California Department of Health Care Services (DHCS) implemented targeted rate increases (TRI) for Medi-Cal, focused on primary care, obstetric and non-specialty mental health services.

These increases were part of the 2023-24 budget deal negotiated by the California Medical Association. While the effective date for the increases was Jan. 1, DHCS gave health plans additional time to start making the payments because implementing the rate increases required system and contract updates.

Under the targeted rate increases, DHCS is increasing Medi-Cal rates for targeted services to at least 87.5% of the Medicare rate. Health plans must ensure that providers receive no less than the applicable minimum fee schedule rates for qualifying services. While the rate increases are focused on primary care, obstetric and non-specialty mental health services, any eligible provider billing eligible CPT codes will receive the TRI, without regard to the rendering provider’s specialty.

Managed care plans and subcontractors must implement the targeted rate increases and make all retroactive payments to eligible network providers no later than December 31, 2024, except when payment would not otherwise be due by that date. Managed care plans that fail to meet this timeline may be subject to interest payments. DHCS may also impose corrective action plans, as well as administrative and/or monetary sanctions for plan non-compliance.

The new TRI rates are published on the Medi-Cal fee schedule and are indicated by procedure type “X.” (DHCS has also retained the legacy Medi-Cal fee schedule on the Medi-Cal website.)

For more information about the targeted rate increases, see DHCS APL 24-007.

Practices who haven’t been paid by the Dec. 31 deadline should reach out to the payor and/or contact CMA at (800) 786-4262 or economicservices@cmadocs.org for assistance.