CHA News Article

DHCS to Seek Approval of Proposed Supplemental Payments for Selected Physician Services
Payments would apply to 2017-18 state fiscal year

The California Department of Health Care Services (DHCS) has announced it will submit State Plan Amendment (SPA) 17-030 to the Centers for Medicare & Medicaid Services (CMS) to authorize a time-limited supplemental payment program for selected physician services. These services include new and established patient office/outpatient visits, psychiatric diagnostic evaluations, psychiatric diagnostic evaluation with medical services and psychiatric pharmacological management services. The supplemental payment amounts are fixed and will be paid per claim, according to the current procedural terminology (CPT) codes below:

CPT Code  
90863 $5.00
99201, 99277 $10.00
99202, 99212, 99213 $15.00
99203, 99204, 99214, 99215 $25.00
90791, 90792 $35.00
99205 $50.00

The payments are being made through the California Healthcare, Research and Prevention Tobacco Tax Act (Proposition 56), which increases the excise tax rate on cigarettes and tobacco products. Under Prop. 56, a specified portion of the tobacco tax revenue is allocated to DHCS for the nonfederal share of health care expenditures in accordance with the annual state budget process.

AB 120 (Chapter 22, Statutes of 2017) amended the Budget Act of 2017 to appropriate $1.3 billion of Prop. 56 tobacco tax revenue to fund $546 million in supplemental payments to certain providers, including $325 million for physicians and $140 million for dentists; the remaining money will go to other programs. The supplemental payments could increase to $800 million in the 2018-19 budget year, depending on the state’s fiscal condition and other factors.

DHCS projects the overall budgetary impact of the proposed supplemental payments for fee-for-service to result in an aggregate expenditure increase of $24 million in total funds, including $10 million in Prop. 56 funds. The proposed effective dates for the proposed SPA are July 1, 2017, to June 30, 2018. DHCS will also seek federal approval to authorize corollary directed payments for certain physician services in Medi-Cal managed care using Prop. 56 funds allocated for this purpose in the 2017-18 state fiscal year. To the extent approved by CMS, these directed payments would be available for the physician services identified above when rendered by network providers in a Medi-Cal managed care plan.

A copy of proposed SPA 17-030 will be published on the DHCS website once it is submitted to CMS.