Medi-Cal Implementation of Assembly Bill 97 Reductions

The Department of Health Care Services (DHCS) is announcing the implementation plan for the provider payment reductions required pursuant to Assembly Bill 97. AB 97 requires DHCS to implement 10 percent provider payment reductions to most categories of services in Medi-Cal fee-for-service (FFS) as well as actuarially equivalent reductions in Medi-Cal managed care. Physicians will begin to see the reductions starting 1/9/2014. Additionally, since the 10 percent payment reduction is effective for services provided on or after June 1, 2011, DHCS will also begin recouping a percentage of provider payments to recover overpaid funds during this retroactive period. These retroactive payment recoveries will not occur until after the prospective 10 percent payment reductions are implemented.  DHCS will provide at least sixty (60) day advanced notification of scheduled recoveries. Guidance on the Medi-Cal managed care implementation will be issued soon in an All Plan Letter.