In the upcoming weeks, some providers might see changes to their claims because of DHCS targeted rate increases (TRI). This is related to APL 24-007, which increases payment rates for certain services and provider types to no less than 87.5 percent of the lowest California-specific Medicare locality rate. These changes aim to address disparities, ensure the financial viability of providers and improve overall quality of care and access for Medi-Cal members.
TRI eliminate applicable AB 97 provider payment reductions and include any applicable Proposition 56 payments.
The Alliance is required to ensure that network providers, as defined in APL 19-001, receive no less than the TRI for applicable services. TRI does not apply to non-contracted providers or providers operating under a Letter of Agreement. Where there is a conflict between this notice and state law and/or DHCS guidance, the Alliance plans to follow state law and/or DHCS guidance, as applicable.
TRI will primarily benefit the following provider types:
- Physicians.
- Physician assistants.
- Nurse practitioners.
- Podiatrists.
- Certified nurse midwives.
- Licensed midwives.
- Doula providers.
- Psychologists.
- Licensed professional clinical counselors.
- Licensed clinical social workers.
- Licensed marriage and family therapists.
The specifics of these increases can vary.
The Alliance is in the process of completing its evaluation of how TRI may affect Primary Care Physician (PCP) capitation rates. Fee for service (FFS) reimbursement will be adjusted according to TRI where applicable. While Federally Qualified Health Center (FQHC) or Rural Health Center (RHC) providers are excluded from TRI, the Alliance will ensure that FFS reimbursement is no less than TRI rates when applicable.
For information on submitting claims to the Alliance or billing appeals, please contact the Alliance Claims Department at 831-430-5503.
Implementation details
- Alliance implementation of payments in accordance with TRI will begin in November 2024.
- Providers who have submitted complete claims with dates of service beginning Jan. 1, 2024, should start receiving payment adjustments in December 2024. No further action is required from providers to facilitate this retroactive payment process.
The Alliance will make available an itemization of the reimbursement adjustments in an electronic format to eligible providers’ remittance advice. The itemization will include information for providers to identify the value of the adjustment for each claim for qualifying services or each assigned member, as applicable, for which a Reconciliation Period payment adjustment was made. Further details are available under the Claims Adjustment Reason Codes (CARC) for TRI section.
Corrections, disputes and appeals
Should you have a correction to claim (i.e., coding or modifiers) please follow the process outlined in Alliance policy. For disputes regarding payment amount, please fill out the Provider Inquiry Form.
Proposition 56 payment impact
Proposition 56 Physician Services (Physician Prop 56) add-on payments were incorporated into the TRI fee schedule, where applicable and retired by DHCS effective Jan. 1, 2024. This means that once the Alliance implements TRI, services paid at the TRI rate will not receive an additional Physician Prop 56 payment.
However, where the Physician Prop 56 amount for a particular code plus the provider’s contracted rate is higher than TRI, the Alliance has chosen to voluntarily continue to pay the Physician Prop 56 amount until further notice. This amount will be now included in the total paid on the claim for the applicable code for FFS claims.
FQHC and RHC providers were excluded from the DHCS Physician Prop 56 program and did not receive this pass-through payment. However, to ensure FQHC and RHC reimbursement is not less than the payment for the same services to non-FQHC or RHC providers, the Alliance will now pay such amounts to FQHC and RHC providers until further notice. Prop 56 programs for 1166 Developmental Services, 1148 Family Planning, 1154 (A) Adverse Childhood Experiences Screening, or 1176 (A-B) Hyde (Woman Health Services) (CPT codes 59840 and 59841) are not currently impacted by TRI.
Claims payment under TRI
FFS claims
- The Alliance will pay the greater of the provider’s contracted rate plus Physician Prop 56 amount (where applicable, until further notice) or the TRI rate (see examples in table below).
- Previous Physician Prop 56 amounts (where applicable, until further notice) will be paid with the FFS claim and not paid separately.
|
Step 1: Calculate current contracted rate + Physician Prop 56 amount
|
Step 2: Determine TRI fee schedule amount | Step 3: Pay using the greater amount from steps 1 and 2 | |
| Example 1 | Billed amount = $50
Contracted rate = $36 Lessor of = $36 Physician Prop 56 amount = $44
Total = $80
|
TRI rate = $82.02 |
The Alliance will pay the TRI rate because the TRI rate is greater than the contracted rate plus the Physician Prop 56 amount.
($82.02 > $80).
Claim includes CARC 172 indicating it was paid at the TRI rate. |
| Example 2 | Billed amount = $105
Contracted rate = $90.40 Lessor of = $90.40 Physician Prop 56 amount = $44
Total = $134.40
|
TRI rate = $82.02 |
The Alliance will pay the contracted rate plus the Physician Prop 56 amount because that total is greater than the TRI rate.
($134.40 > $82.02)
Claim includes CARC 144 indicating it was paid at the contracted rate plus Physician Prop 56 amount. |
Capitated claims
Until further notice, providers will continue to receive a separate Physician Prop 56 payment in addition to capitation, where applicable.
Where an FQHC or RHC is paid capitation, they will start to receive the above referenced Physician Prop 56 payment in addition to capitation for which they were ineligible under the DHCS Physician Prop 56 program.
Claims Adjustment Reason Codes (CARC) for TRI
Providers can reference the following CARC codes for their convenience on their Remittance Advice (RA).
| TRI eligible claim line | CARC | Description |
| Claim line paid at TRI rate. | 172 | Payment is adjusted when performed/billed by a provider of this specialty. |
| Claim line paid at contracted rate plus Physician Prop 56 amount. | 144 | Incentive adjustment, e.g. preferred product/service.
|
| Claim line paid at contracted rate only (no Physician Prop 56 amount for the code). | n/a | There is no CARC for this scenario. |
The Alliance will automatically make TRI rate updates. Providers should ensure that any claims submissions reflect their usual and customary charges.
The Alliance is the payor for all TRI services provided to Alliance Medi-Cal members that are not Non-Specialty Mental Health Services. Non-Specialty Mental Health Services provided to Alliance members are paid by Carelon.
Questions?
If you have a question about TRI requirements or the program in general, please contact your Provider Relations Representative at 831-430-5504.
If you have specific questions regarding your claims and TRI, please contact:
- Carelon at 855-765-9700 for Non-Specialty Mental Health claims questions.
- The Alliance Claims Department at 831-430-5503 for all other TRI related claims questions.
Resources
To facilitate your understanding and implementation of these changes, please reference the following resources:
