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How will the increase in Medi-Cal reimbursement for primary care services work?



February 08, 2013
Area(s) of Interest: Payor Issues and Reimbursement Practice Management 

The Centers for Medicare and Medicaid Services (CMS) released regulations in early November implementing rate increases for primary care physicians who treat Medicaid patients. The goal of the increase is to recruit more physicians to treat low-income patients who will be newly eligible for health coverage under the Affordable Care Act (ACA). Under the ACA, primary care physicians will see their reimbursement rates raised to Medicare levels in 2013 and 2014. According to CMS, states must also incorporate the increased payment rates into their contracts with managed care plans so that primary care physicians contracting with Medi-Cal managed care plans see the higher rates. The increase is financed 100 percent by the federal government.


The California Medical Association (CMA) has prepared answers to the most commonly asked questions regarding the Medi-Cal primary care fee increases:


Which physicians are eligible for the increase?
According to the California Department of Health Care Services, physicians must be practicing in an eligible specialty in order to qualify for the increase. For purposes of this regulation, primary care is defined as family medicine, general internal medicine, pediatric medicine or related subspecialties. The regulation specifies that specialists and subspecialists within those designations recognized by the American Board of Medical Specialties (ABMS), American Board of Physician Specialties (ABPS) or the American Osteopathic Association (AOA) are eligible to receive the increased fees. If a physician is not board certified, eligibility can be determined by the physician’s billing history. Physicians will qualify if 60 percent of the codes they bill are for the evaluation and management (E/M) codes and vaccine administration codes covered by this rule. CMS will allow physicians to self-attest to their board certification or billing history.


Can a physician qualify solely on the basis of meeting the 60 percent claims threshold, irrespective of specialty designation?
According to CMS, in order to be eligible for the higher payment, physicians must first self-attest to a covered specialty or subspecialty designation. Only physicians who can legitimately self-attest to a specialty designation of family medicine, general internal medicine or pediatric medicine or a subspecialty recognized by the ABMS, ABPS or AOA qualify.


Which codes are affected by the increase?
The rate increase will apply to the following codes:



  • Evaluation and management codes 99201-99499

  • Vaccine administration codes 90460, 90461, and 90471-90474

  • Preventive care codes 99381-99387 and 99391-99397

  • Counseling risk/behavior intervention codes 99401, 99404, 99408-409, 99411, 99412, 99420 and 99429


What specific rates can I expect to be paid?
CMS is allowing states some flexibility on payment methodology. For example, states can reimburse at the Medicare non-facility rates. Additionally, states can reimburse using locality adjustments or may pay based on the mean of overall localities. DHCS will be required to include its proposed payment methodology in the State Plan Amendment (SPA) they submit to CMS for approval.


For services not reimbursed by Medicare, such as consultations, CMS will develop reimbursement rates based on the formula used to set Medicare rates. We expect CMS will be releasing these codes and payment rates soon.

Vaccine payments will be made at the lesser of the Vaccines for Children (VFC) rates, the Medicare fee schedule or the physician’s billed charges.


The final rule also updates the maximum fees that providers may charge for the administration of pediatric vaccines to federally vaccine-eligible children under the VFC program, raising it from $17.55 to $26.03.

When can I expect to see the increased payments?
DHCS has indicated that it do not expect to implement the rate increase until summer 2013 at the earliest. DHCS has until March 31, 2013, to submit its SPA to CMS for approval and CMS then has 90-days to review and make a decision as to whether to approve. Once approved, the increased payments will be made retroactively to physicians.


Medi-Cal requires I submit claims using local codes rather than the E/M codes identified in this rule. Will I be eligible to receive the higher payment?
States will need to submit for approval a crosswalk of those local codes to the eligible E/M codes as part of their required SPAs. Once approved, higher payment will be made for services billed using qualifying local codes.


It’s important to note that Medi-Cal payments are made at the lesser of the Medi-Cal fee schedule or the provider’s billed charges. Therefore, CMA suggests that physicians bill their usual and customary fees for services to Medi-Cal patients. Billing at your customary fee ensures that national data reflects actual charges rather than payment rates and ensures that Medi-Cal pays you at the highest amount possible when the claim is processed or reprocessed. Do not bill at a lower amount; you may not have the benefit of automatic reprocessing of your claims if the amount allowed is more than you charged.


CMA will publish updates as they are available.


Contact: CMA’s reimbursement help line (888) 401-5911 or economicservices@cmadocs.org.

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