Brighter Days Ahead for Medi-Cal Reimbursement in Primary Care
Primary care Medi-Cal reimbursement rates are about to get a long-needed boost. The Managed Care Organization (MCO) Tax recently approved by the federal government will infuse an additional $19.4 billion dollars into California Medi-Cal funding for the years of 2023-2027 (Legislative Analyst’s Office, 2023). So, what does this mean for family medicine in California?
First and foremost, primary care, obstetrics and non-specialty mental health services will begin being reimbursed to at least 87.5% of the Medicare rate as of January 1, 2024. This is being achieved by infusing $820 million into state funding to reverse the AB 97 reductions of 2011-2012, which cut Medi-Cal reimbursement by 10% and have only partially been restored in the past decade. This infusion of MCO tax funds combined with the existing Proposition 56 supplemental payments bring rates to the new 87.5% threshold (Legislative Analyst’s Office, 2023).
In the future, there is an additional $10.3 billion through 2026-2027 that will be allocated to improve provider participation in Medi-Cal services. This could come in the form of additional payment increases or other programs to incentivize participation. This funding is expected to be spent in the next 8-10 years. (Legislative Analyst’s Office, 2023)
Funding of $75 million annually has also been set aside to invest in GME to create new residency programs, and to create new residency slots in established programs to improve physician workforce and patient access to care. (California Medical Association, 2023)
In the state of California, this moves us toward our goal of improved healthcare equity and justice. In the US, California ranks 40th in Medicaid reimbursement, while serving the greatest number of patients. Of our total population receiving Medi-Cal, 80% are non-white (Michener, 2022). The low reimbursement rates in California often do not meet the cost of care provided, which directly limits the capacity of practices to care for the Medi-Cal population. This lack of access falls greatest on our minority and underserved populations and serves to widen the racial healthcare disparity gap. This increase in reimbursement rates is a step in the right direction for Californians and for family physicians who struggle to meet the needs of this growing population.
Works Cited
California Medical Association. (2023, June 27). Medi-Cal Budget Trailer Bill Frequently Asked Questions. Retrieved from cmadocs.org: https://www.cmadocs.org/LinkClick.aspxfileticket=ODaJCpNa5hQ=&portalid=53
Legislative Analyst’s Office. (2023, May 30). Managed Care Organization Tax: Background and Issues for Consideration on Administration’s Proposal. Retrieved from lao.ca.gov: https://lao.ca.gov/handouts/health/2023/MCO-Tax-053023.pdf
Michener, T. N. (2022, June 16). CommonwealthFund.org. Retrieved from “Medicaid Reimbursement Rates Are a Racial Justice Issue,” To the Point (blog): https://www.commonwealthfund.org/blog/2022/medicaid-reimbursement-rates-are-racial-justice-issue
