On June 27, 2019, Governor Newsom signed his first state budget, which included significant new funding for health care programs. The funding – made possible by the Proposition 56 tobacco tax – continues the increased payment on 23 CPT codes, including 10 preventive codes, in both the fee-for-service and Medi-Cal managed care delivery systems.

The budget also includes the following new funding from Prop 56 (and the corresponding federal match):

• $544 million for the Medi-Cal Value-Based Payments Program, with $140 million specifically earmarked for behavioral health integration
• $105 million to fund supplemental payments for developmental and trauma screening
• $60 million over three years to train providers to conduct these screenings
• Additional $120 million one-time funding for the physician and dentist loan repayment program (CalHealthCares)

New Funding

For at least three years, the value-based payment program will provide incentive payments to physicians providing in-network services to Medi-Cal managed care patients if they meet specific measures aimed at improving care for certain high-cost or high-need populations. These risk-based incentive payments will be targeted at physicians who meet specific achievement on metrics targeting prenatal/post-partum care, early childhood prevention, chronic disease management and behavioral health integration.

The amount and timing of the value-based payments is unknown at this time as the Department of Health Care Services (DHCS) is awaiting federal approval on the proposal. However, once approved, the supplemental payments will apply retroactively to services provided beginning July 1, 2019. Additional details on the performance measures, including slides from a June DHCS webinar, can be found on the DHCS website.

Both the developmental and trauma screening incentive payments will be available in the fee-for-service and Medi-Cal managed care settings, Developmental screening payments will apply to CPT code 96110 and the supplemental payment of $59.90 will be in addition to the office visit that accompanies the screening services. Trauma screening payments will apply to CPT code 96160 and the payment of $29 will be in addition to the office visit that accompanies the screening services. Additional details on the developmental and trauma screening programs can be found on the DHCS website.

The behavioral health integration, as well as the trauma and developmental screenings, have an implementation date of January 1, 2020.

Continued Funding

The budget includes funds for continued supplemental payments on 23 CPT codes, including 10 preventive codes. DHCS and the Governor’s administration have committed to continuing these supplemental payments for 2.5 years. A full list of the eligible CPT codes is below.

DHCS has advised that while awaiting federal approval, it is continuing to issue the supplemental payments to physicians for eligible FY 19-20 services provided to fee-for-service Medi-Cal patients. Additionally, DHCS continues to provide funding to the Medi-Cal managed care plans through the monthly capitation payments and the plans are expected to also continue the payments.

Medi-Cal managed care plans are required to distribute supplemental payments to physicians within 90 calendar days of receipt of the funds from DHCS. At the request of the California Medical Association, DHCS clarified that this 90-day requirement includes delegated entities and subcontracts.

Is any action required to receive the supplemental payments?

There is no additional action required by providers who are submitting claims to the managed care plans and are reimbursed on a fee-for-service basis., 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.

Physician with questions should contact the managed care plan directly. More information on Prop 56 can be found on the DHCS website.