California governor pitches higher Medi-Cal rates

California Gov. Gavin Newsom is proposing upping Medicaid reimbursement rates for certain providers. 

According to a proposed budget published May 12, the state would increase Medi-Cal reimbursements for primary care, maternal care and mental health services to 87.5 percent of Medicare rates, beginning in 2024. 

These reimbursements will be expanded to some other specialties in 2025 and beyond under the proposed budget. 

The increases in reimbursement will be offset by reinstating taxes on managed care plan revenue, which expired at the end of 2022. The tax would offset $6.5 billion in spending over three years, according to the budget. 

The proposed budget reverses a 10 percent cut in Medi-Cal reimbursement rates approved in 2011. 

In a news release, the California Medical Association praised the proposed reimbursement increases. 

"The provider reimbursement rate cuts from 2011 have had a detrimental impact on patient access to care for more than a decade and I am very happy to see the Governor's May revised budget today, which will help us achieve justice and equity in access to care for Medi-Cal patients," California Medical Association President Donaldo Hernandez, MD, said in the release. 

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