Medi-Cal rate methodology boosted under new law

August 6, 2021

California pathologists who have grown frustrated with retroactive recoupments from Medi-Cal in recent years due to their outdated rate-setting methodology now have some relief after California Gov. Gavin Newsom signed a comprehensive health care budget bill (AB 133) on July 27.

The bill raises the Medi-Cal rate methodology to 100% of Medicare for clinical or laboratory services and prevents future retroactive reimbursement reductions and recoupments, according to the College of American Pathologists (CAP).

Previously, the 2021-2022 California State Budget included relief on Medi-Cal laboratory rates including certain anatomic pathology codes. Medi-Cal utilized a rate methodology of no more than 80% of Medicare or the lowest of enumerated criteria. Numerous retroactive recoupments to labs and pathology groups have been made since due to “a lack of timeliness in Medi-Cal updating their rates.” Beginning on July 1, 2022, the raised Medi-Cal rates will be implemented.

The California Society of Pathologists (CSP) successfully advocated for increasing the Medi-Cal payment rates to 100% of Medicare as reflected in the new law.

“Though the new rates won’t take effect until 2022, this was the culmination of a legislative effort over a number of years supported by the CSP” stated Executive Director of CSP, Robert J Achermann, JD.

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