Provider Alerts

Health Plan is introducing new Primary Care Provider (PCP) capitation payment rates effective December 1, 2024. Below is an overview of the changes and key details PCPs need to know.

Background

Targeted Rate Increase and Proposition 56

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.

DHCS requires Health Plan to pay for covered services that are subject to the TRI at a minimum of the TRI fee schedule rate.

What is Changing

New Capitation Rates: All-Inclusive and Data-Driven

Health Plan has established all-inclusive capitation rates based on utilization experience (including encounters and claims paid). These rates will provide a more streamlined payment approach and reflect:

• Primary care services that were previously paid Fee-For-Service (FFS) are now included within the capitation.
• Capitation was adjusted to incorporate and account for TRI rates.
• Applicable Proposition 56 payments are now integrated into the capitation.

The new PCP capitation rates will be effective December 1, 2024. Health Plan will evaluate the capitation reimbursement on an annual basis and will adjust rates based on encounters and the Medi-Cal fee schedule.

Note: Health Plan will be reconciling previous payments issued to providers since January 1, 2024 against the TRI rates and, if the TRI rates are greater than what was previously paid, Health Plan will be reimbursing the difference by the end of the calendar year.

Capitated Services: Scope of Coverage

The new capitation includes any services customarily provided by primary care physicians or practitioners within their professional licensure and practice scope are included, unless stated otherwise in your contract.

Services falling outside PCP scope or responsibility under Medi-Cal regulations remain under Health Plan’s financial responsibility and are reimbursable on a FFS basis:

• Drugs provided in the office setting and billed on a medical claim.
• Laboratory services when performed as point of care in the office setting.
• Administration fee for immunizations covered under the Vaccines for Children program.
• Immunizations not covered under the Vaccines for Children program and provided as point of care in the office setting.

Services falling outside the scope of Health Plan’s coverage may be the financial responsibility of Health Plan or another entity and should be directed appropriately.

What is Next

PCP Capitated Contracts

To align with the DHCS updated provider reimbursement guidelines, Health Plan is re-issuing contracts to incorporate the required regulatory language and reflect the updated capitation structure.

If you have any further questions, please contact your Provider Services Representative, or call our Customer Service Department at 1-888-936-7526 (PLAN). 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