2003 Budget Act: Provider Payment Reductions
Effective for dates of service on or after January 1, 2004, Medi-Cal will reduce payments for services by five percent. These reductions, required by the Welfare and Institutions Code (W & I), Section 14105.19, are due to the projected state budget deficit and changes in the funding level for health care services. This action will not reduce Medi-Cal rates, only reimbursements. The reductions will remain in effect until January 1, 2007.
The five percent reductions also apply to non-Medi-Cal programs described in the W & I, Section 14105.18. Non-Medi-Cal programs affected by the payment reductions include the following:
- California Children's Services (CCS)
- Cancer Detection Programs: Every Woman Counts
- Family Planning Access, Care and Treatment (Family PACT)
- Genetically Handicapped Persons Program (GHPP)
The reductions also apply to the Child Health and Disability Prevention (CHDP) Program.
The following are exempt from the payment reductions:
- Acute hospital inpatient services
- Adult Day Health Care (ADHC) services
- Children's Treatment Program (CTP) services
- Clinical laboratory or laboratory services as defined in the California Code of Regulations (CCR), Title 22, Section 51137.2
- County Medical Services Program (CMSP) services
- Department of Mental Health (DMH) specialty mental health services
- Durable Medical Equipment (DME)
- Expanded Access to Primary Care (EAPC) services
- Federally Qualified Health Center (FQHC) services
- Hospice services
- Indian Health Services (IHS)
- Local Educational Agency (LEA) services
- Outpatient services billed by a hospital
- Payments to Long Term Care (LTC) facilities, including but not limited to freestanding nursing facilities, distinct-part nursing facilities, intermediate care facilities for developmentally disabled individuals, sub-acute care units of skilled nursing facilities, rural swing beds, ventilator weaning services and special treatment program services
- Rural Health Clinic (RHC) services
- Multipurpose Senior Services Program (MSSP) services
- Developmentally Disabled Home and Community-Based Services (HCBS) Waiver services
- Payments to managed health care plans (a five percent actuarial equivalent reduction will take place at the time of each plan's next rate determination)
Except for the above listed exemptions, the payment reductions will apply to services rendered by any provider authorized to bill Medi-Cal for services.