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Medi-Cal - Proposition 56 Funding

The California Medical Association (CMA) is dedicated to ensuring all Californians have access to medical care and can see a doctor when they need one. As physicians, we know that it is most effective to treat patients as soon as health issues arise. 

California has the highest Medicaid population in the nation – but some of the lowest reimbursement rates for providers, creating an unsustainable disparity between the number of Californians a Medi-Cal provider can afford to accept as patients:

  • Over half of Medi-Cal's 13 million enrollees report difficulty finding a specialist, are more likely to delay needed care due to long appointment wait times, and twice as likely to use emergency room visits to access specialty care (compared to private insurance and/or Medicare).
  • Fee-for-service physicians are reimbursed an average 36 percent less for Medi-Cal compared to Medicare ($10-21 for Medi-Cal versus $21-76 for Medicare).
  • In managed care, the average annual amount of payment per beneficiary is $2,784. This varies greatly from states like Pennsylvania whose managed care plans receive $5,180 annually per beneficiary.

In 2016, CMA took on Big Tobacco (and won!) by co-sponsoring the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (also known as Proposition 56), which raised the state’s tobacco tax by $2 per pack. The measure will save countless lives by preventing children from getting addicted to tobacco, and generate revenue to improve health care and fight tobacco-related illnesses.

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.

In 2018, the Centers for Medicare and Medicaid Services (CMS) recently approved State Plan Amendment (SPA) 17-030 allowing for the distribution of supplemental payments to physicians funded by the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (Proposition 56). 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.

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

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