CHA News Article

DHCS Provides Update on Medi-Cal DP/NF, Subacute Rates

In response to inquiries from CHA, the California Department of Health Services (DHCS) reported that its fiscal intermediary (FI) completed updating rates for distinct-part skilled-nursing facilities (DP/NFs) to 2011-12 rate levels in late September. A DHCS provider bulletin, scheduled for publication Oct. 15, will include a rate chart providing individual DP/NF facility rates, effective Dec. 28, 2011, as well as rates and effective dates subject to the payment reduction and rate freeze. Providers may begin billing the new reimbursement rates, effective Dec.  28, 2011, immediately. 

Following the rate update to 2011-12 levels, the state will proceed with retroactive payment reduction for services prior to Dec. 28, 2011. This action will apply only to claims for services rendered June 1, 2011, through Dec. 27, 2011, if such claims were not paid before Dec. 28, 2011. 

In addition, DHCS stated the FI has initiated an Erroneous Payment Correction process, which may take up two to three months to complete. Once the process is complete, providers will automatically receive a lump sum payment of the difference in the rate previously paid and the new rates, retroactive to Dec. 28, 2011.

DHCS also reported the FI expects to complete implementing DP adult subacute-care rate increases effective retroactively to Aug. 1, 2011, to be implemented by the end of November 2012.


The Budget Act of 2011 included a reduction to Medi-Cal reimbursement rates for SNFs and subacute-care units that are distinct parts of hospitals to “rates that were applicable … in the 2008-09 rate year, reduced by 10%.” As a result of legal challenges brought by CHA on behalf of members, the U.S. District Court issued a preliminary injunction blocking implementation of the rates, effective Dec. 28, 2011.