Primary Care Rate Increases: Why Are They Important and What's the Reason for the Delay in Implementation in California?

August 7, 2013

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California could be the last state in the nation to implement the primary care improvements of the ACA, but if so, let’s at least make it the most successful, transformative and enduring. The ACA requires states to increase their Medi-Cal reimbursements for primary care to the Medicare level with the federal government paying 100% of the costs for two years (2013 and 2014).[1] In California this will more than double the reimbursement rates for primary care.

Federal funding for this increase was effective January 1, 2013; so the longer the state’s delays, the bigger the retroactive bonus for those providers now treating Medi-Cal patients. Also the longer the state delays, the state and health plan’s opportunities to recruit new primary care providers and build strong primary care networks prior to the launch of the Medicaid expansion for low income adults diminish. The enhanced federal funds are only available for 2013 and 2014 so we have a short time frame to lay the foundations of a stronger primary care system.

The enhanced payments are available for listed primary care services to physicians in Medi-Cal fee for service and in managed care.[2] Medi-Cal managed care plans must pass through the increase in full to the providers. Non-physicians, such as nurse practitioners or physician assistants, are not eligible for the increase.

Since the rate increase was in the California budgets for 2012-13 and 2013-14 and since the increase is fully funded by the federal government, there is no state budgetary reason for the delay. It is certainly true that the Department of Health Care Services has had its hands full with the Medi-Cal simplification and the just concluded negotiations with the counties and the legislature to implement the expansion of Medi-Cal to the medically indigent adults (MIAs).

[1] Wulsin, Primary Care Reimbursement Rates — Summary of Summary of New Fed Regulations (ITUP, November 25, 2012) at

[2] Ibid.