Medi-Cal payment rates update

Shannon Smith-CrowleyShannon Smith-Crowley, JD, MHA, District IX director of government relations

Medi-Cal payment rates to California physicians and the state’s per capita spending on Medi-Cal beneficiaries are among the lowest in the nation. The low rates have created a climate in which only half of physicians accept new Medi-Cal patients.

California expects to add another 2 to 3 million Medi-Cal beneficiaries to its current 6.8 million as part of the Affordable Care Act implementation beginning in 2014. Significantly increasing the number of Medi-Cal patients is concerning at a time when we are facing insufficient physician payment rates and physician program participation.  

Given the backdrop of the massive state budget deficits in California over the last few years, Gov. Jerry Brown looked everywhere for savings. Significant portions of the state budget are locked into formulas, and areas where cuts can be made are limited.

In 2011, the governor cut Medi-Cal rates by 10%. Since then, the cuts have not been implemented due to legal maneuvering by the California Medical Association and others. The last legal ruling in December 2012 of a three-judge panel of the Ninth Circuit Court of Appeals would allow California to proceed with the cuts, which would apply retroactively to June 1, 2011.

The legal appeals continue. One hope is that by the time legal appeals are exhausted, even if the state is given legal authority to proceed, its fiscal house will be in order and the cuts may not be necessary. However, it would be wise to be circumspect and plan for the potential rate changes and recovery of previous payments.

Please let District IX know how the Medi-Cal payment rate uncertainty and potential cuts affect your practice. Email me at