Provider Alerts

Pursuant to the 2023 Budget Act and Assembly Bill (AB) 118 (Chapter 42, Statutes of 2023), which enacted Welfare and Institutions (W&I) Code Section 14105.201, the Department of Health Care Services (DHCS) increased rates for targeted primary care, obstetric, and non-specialty mental health services to no less than 87.5% of the lowest California-specific Medicare locality rate for dates of service on or after January 1, 2024 (hereinafter “Targeted Rate Increases” or “TRI”). The TRI rates incorporate applicable Proposition 56 physician services supplemental payments into the fee schedule. For services that did not have a rate established by Medicare, DHCS calculated an equivalent rate benchmark and increase.

Eligible Network Providers

Procedure codes identified a​s Primary/General Care will be reimbursed at the CY 2024 TRI rate if the service is billed using Health Insurance Claim Form (CMS-1500) and rendered by a provider in the provider types below, without regard to the provider’s specialty:

• ​Physicians
• Physician Assistants
• Nurse Practitioners
• Podiatrists
• Certified Nurse Midwives
• Licensed Midwives
• Doula Providers
• Psychologists
• Licensed Professional Clinical Counselor
• Licensed Clinical Social Workers
• Marriage and Family Therapists​

Procedure codes identified as Obstetric and Non-Specialty Mental Health Services will be reimbursed at the CY 2024 TRI rate when billed by an eligible provider without regard to claim type of the provider’s specialty.

What is Changing

Effective November 1, 2024:

• You will no longer receive a separate Proposition 56 physician services supplemental payment. Proposition 56 physician services supplemental payment program ended on December 31, 2023.
• DHCS requires Health Plan to pay Covered Services that are subject to the TRI at a minimum of the TRI Fee Schedule rate. Therefore, for Covered Services that are subject to the TRI, Health Plan will reimburse you at your contracted rate or at the TRI Fee Schedule provided the TRI Fee Schedule rate exceeds your contracted rate.
• DHCS does not require Health Plan to pay the greater of the TRI rate or your contracted rate plus any amounts equivalent to the Proposition 56 supplemental payments. As stated above, the Proposition 56 program ended in 2023 and DHCS intended for TRI to incorporate the old Proposition 56 payments. Health Plan has continued to pay Proposition 56 equivalent payments to date at its sole discretion even though W&I Code section 14105.201 does not require Health Plan to pay any amounts greater than TRI. Regardless, in recognition of our continued partnership and the services you have provided to our members, Health Plan has decided to pay you your contracted rate plus Proposition 56 equivalent payments if your contracted rate plus Proposition 56 equivalents payments exceeds the TRI rate for the same services. Health Plan will continue this “greater of” calculation through June 30, 2025, after which Health Plan will assess whether it should phase out the calculation and begin reimbursing you at the greater of your contracted rate or the TRI Fee Schedule rate.
• Health Plan will perform a retroactive reconciliation for services rendered since January 1, 2024 and reimburse you for any positive difference between the TRI rate minus your contracted rate plus Proposition 56 equivalent payments no later than December 31, 2024.
• For all other Covered Services that are not subject to the TRI, Health Plan will continue to reimburse you at your current contracted rate.

The CY 2024 TRI Fee Schedule and eligible procedure codes can be found here:  https://www.dhcs.ca.gov/Pages/Medi-Cal-Targeted-Provider-Rate-Increases.aspx

For more information on TRI, please review APL 24-007, Targeted Rate Increases on the DHCS website found here: https://www.dhcs.ca.gov/formsandpubs/Documents/MMCDAPLsandPolicyLetters/APL%202024/APL24-007.pdf

Fee-for-Service (FFS) Contracts

To align with DHCS’ recently updated guidelines, Health Plan is re-issuing contracts to incorporate the required regulatory language. Health Plan will use this opportunity to remove references to Proposition 56 Directed Payments, as they were incorporated into the TRI rates.

If you have any further questions, please contact your Provider Services Representative, or call our Customer Service Department at 1-888-936-PLAN (7526). You may also visit https://www.hpsj.com/alerts/ for online access to the documents shared. The most recent information about Health Plan and our services is always available on our website WWW.HPSJ-MVHP.ORG