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Have you received your FY 18-19 Prop 56 supplemental payments?

September 05, 2019
Area(s) of Interest: Practice Management Payor Issues and Reimbursement 


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. 

While the California Department of Health Care Services (DHCS) began disbursing the FY 2018-2019 supplemental payments in fee-for-service Medi-Cal last fall, federal approval of the supplemental Medi-Cal managed care payments was delayed until February.

DHCS began dispersing the FY 2018-2019 funds to the managed care plans as part of its capitated payments in March. 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, 2018, and the date the plan received the Prop 56 funds.

Per DHCS instructions, for clean claims or accepted encounters received, plans are required to issue supplemental payments to qualifying physicians within 90-days of receipt of the funds from the DHCS. DHCS clarified in these instructions that the 90-day timeframe for distribution of funds also applies to the plan’s delegated groups. Additionally, the DHCS is requiring plans to demonstrate that 95%of the funds were distributed to providers or refund the funds to DHCS.

The California Medical Association (CMA) surveyed the plans to determine which entity, plan or delegated group would be responsible for distributing payments and has created a Prop 56 Payment Source Table. Practices that have not received their supplemental payments, are encouraged to contact the plan or delegated group responsible for distributing payments. Physicians can utilize the payment source information along with the plan contacts table for additional information on who to contact regarding any underpayments.

How do I know if I’ve been paid correctly?

CMA recently published an updated Prop 56 Payment Monitoring Worksheet to help physicians determine whether they have been paid correctly based on the FY 18-19 supplemental payment amounts (utilize the 2018-2019 worksheet).

Is any physician action required to receive the supplemental payments?

If you are submitting claims to the managed care plans and are reimbursed on a fee-for-service basis, there is no additional action required. Payments should be automatic. However, physicians who have a capitated contract with either a Medi-Cal managed care plan or one of its delegated entities for eligible services must submit encounter data to the payor in order to receive the supplemental funds. Without the encounter data, the plan or its delegated entity will be unable to determine the services eligible for payment, which will result in non-payment of the supplemental funds. If you are unsure how to submit encounter data, contact the plan or delegated entity for more information.

More information on Prop 56 can be found on the DHCS website.

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

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