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Targeted Rate Increase Frequently Asked Questions

Updated June 7, 2024
24-221b

  1. What is the Medi-Cal targeted rate increase (TRI)?

    To improve access to care, quality and equity, the California Department of Health Care Services (DHCS) is increasing rates for certain Medi-Cal services to 87.5% of Medicare. The DHCS will add funding to health plan premiums, which will then be passed on to eligible contracted providers.
  2. Which contracted providers will receive the TRI?

    • Physicians
    • Physician Assistants
    • Nurse Practitioners
    • Podiatrists
    • Certified Nurse Midwives
    • Licensed Midwives
    • Doula Providers
    • Psychologists
    • Licensed Professional Clinical Counselor
    • Licensed Clinical Social Workers
    • Marriage and Family Therapists
    Only eligible contracted providers, as defined in All Plan Letter 19-001 (PDF), providing qualifying physician services are eligible to receive the TRI. The TRI is not applicable to any services provided by non-contracted providers. Please see FAQ below for providers performing services under a single-case agreement or letter of agreement.
  3. What CPT codes apply?

    Refer to CY 2024 TRI Fee Schedule v1.06.01082024 (XLSX) for rate information.
  4. What do I need to know about Proposition 56 Physician Services Payments (APL 23-019 [PDF])?

    Medi-Cal TRI incorporates Prop 56 Physician Services payments. All other Prop 56 programs (dental, family planning, sensitive services) will remain unchanged in 2024.
  5. Do health plans have to pay their downstream providers at TRI rates?

    Yes. Health plans are required to attest to payments to contracted and eligible downstream providers.
  6. Are Prop 56 Physician Services payments included in the TRI calculation?

    Yes. Prop 56 Physician Services payments are incorporated into the TRI fee schedule. See item 1 under Fee-for-service providers below.
  7. Are incentive, bonus, and profit share payments excluded from the TRI calculations?

    Yes.
  8. Are providers who are on Single Case Agreements (SCAs) or Letters of Agreements (LOAs) eligible for TRI payments?

    No. Only network providers, as defined in DHCS All Plan Letter (APL) 19-001 are eligible to receive the TRI. SCAs or LOAs do not meet the requirements of APL 19-001. Providers who are presently on SCA or LOA and wish to be eligible for TRI payments would need to contract with Health Net according to the requirements of APL 19-001.

  1. How is the fee-for-service (FFS) TRI payment methodology calculated?

    Fee-for-service (FFS) TRI Payment Calculation
    Step 1:
    Calculate current contract + Prop 56 physician services payment amount    		 Step 2:
    Determine the TRI fee schedule amount    		 Step 3:
    Pay using the greater amount from steps 1 and 2
    Billed $60, contract $40
    Lesser of = $40
    Prop 56 Physician Services payment = $30

    Total = $70    		 Greater than the TRI fee schedule

    TRI $50    		 Health Net pays the current contracted rate + Prop 56 Physician Services payments

    Payment = $70
    Billed $40, contract $60
    Lesser of = $40
    Prop 56 Physician Services payment = $30

    Total = $70    		 Less than the TRI fee schedule

    TRI $100    		 Health Net pays based on the TRI fee schedule

    Payment = $100
  2. When will FFS claims processed by Health Net be paid at TRI rates?

    TRI rates are effective January 1, 2024. Health plans have until July 31, 2024, to start paying at TRI rates for any new claims for dates on service on or after July 31, 2024. Health plans have until October 31, 2024, to retroactively implement rate increases for FFS claims for dates of service on or after January 1, 2024, through July 30, 2024. Health Net will pay Prop 56 Physician Services payments until July 31, 2024, at which point our claims system will be updated for TRI.
  3. Does my FFS contract have to indicate that I will be paid at TRI rates?

    No. TRI is a pass-through funding program and is a separate fee schedule from the Medi-Cal fee or any contractual schedule. Contractual rates cover all services within the scope of the contract. TRI fee schedule only covers specifically eligible services as indicated in the TRI fee schedule. TRI does not modify contractual fee schedules. Instead, our claims system will automatically apply the additional TRI payments for eligible services and providers during the claim adjudication process. Health Net is updating our claims systems to include TRI by July 31, 2024, as required by DHCS. Furthermore, TRI is a DCHS requirement, and our Medi-Cal contracts automatically incorporate DHCS requirements.
  4. Will Health Net be amending FFS contracts to include TRI rates?

    No. Health Net will not amend FFS provider contracts because the fee schedule in the contracts is not changing. Instead, the TRI fee schedule, which is the same for all providers, is applied in addition to the fee schedule in the contract, as described above.

  1. When will Health Net's capitation rates to PPGs include TRI rates?

    Capitation rates need to be updated no later than December 31, 2024, to include TRI rates. We are working to finalize rates as soon as possible. Health Net will continue to pay Prop 56 Physicians Services payment directly to providers for 2024 dates of service. By December 31, 2024, Health Net will make retroactive TRI add-on capitated payments to PPGs. These retroactive TRI add-on capitated payments will not include the value of Prop 56 Physicians Services. Health Net will share the Prop 56 Physicians Services payment data for 2024 with PPGs. Health Net will make prospective TRI add-on capitated payments effective January 1, 2025. The prospective add-on capitation payments will include the value of Prop 56 Physicians Services Payment.
  2. What do PPGs need to do to obtain the applicable TRI rates owed to them?

    To calculate TRI rates owed to PPGs, Health Net needs PPGs to submit their capitated encounters and FFS claims to Health Net through the secure file transfer protocol (SFTP) site, Health Net Data Request - DHCS Medi-Cal TRI (Targeted Rate Increase) template (XLSX). To submit encounters please:
    1. Assign a designated individual, on behalf of your PPG, to submit the requested data to Health Net.
    2. Submit the designated individual's contact information, including their name, email and phone to the regulatory and legislative implementation intake team.
    3. Your designated individual will be emailed and given a temporary password to log in to the SFTP site. Once logged in, they can change the temporary password.
    4. Prior to June 30, 2024, your designated individual must submit the data to the SFTP site using Health Net Data Request - DHCS Medi-Cal TRI (Targeted Rate Increase) template (XLSX).
    5. Once the TRI rate amount due to a PPG is calculated, Health Net will send a proposed amendment to your contract. Health Net will target to send proposed PPG amendments inclusive of the TRI capitation rate increases in August 2024, assuming timely data submission by PPGs in Step 4 above.
  3. Why is this data submission needed?

    PPGs already submit encounter data to Health Net, but the following two elements are missing from existing encounter submissions and necessary to calculate the appropriate TRI rates:
    • FFS Claims: Accurate paid amounts for all TRI-eligible services.
    • Sub-capitation: Sub-capitation payments, and encounter detail of all sub-capitation services.
  4. Once the PPGs submit their capitated encounters and FFS claims, how will Health Net process the information to determine TRI capitation rate due to the PPG?

    1. For FFS encounters, the exact TRI add-on is calculated using the paid amount. For capitation, the capitated encounters will be analyzed to determine how much additional capitation is needed to support TRI.
    2. The 2024 TRI capitation per member per month equals the total add-on from the FFS encounters plus the total capitated encounters, minus Prop 56 Physicians' Services payments.

      Note: Health Net will pay Prop 56 Physician Services in 2024. As a result, you will receive two sets of capitated amounts:
      • 2024 TRI capitation rates: which do not include the value of Prop 56 Physicians' Services payments.
      • 2025 TRI capitation rates: which will include the value of Prop 56 physicians' services payments.
      Health Net will retroactively pay PPGs the TRI capitation rates back to January 1, 2024. The PPGs are responsible for paying their downstream providers the TRI add-on for 2024, while Health Net will continue to pay Prop 56 Physicians Services payment directly to physicians through 2024.

      Health Net will stop paying Prop 56 Physicians Services payments starting with 2025 dates of service and will communicate to all physicians to work directly with PPGs for the full payment, inclusive of Prop 56 Physicians Services payment.
  5. Do PPGs have to pay their downstream providers at TRI rates?

    Yes. PPGs will be required to attest to appropriate reimbursement to downstream providers.
  6. When will PPGs have to include TRI rates in their fee-for-service claims to their downstream providers?

    TRI rates are effective January 1, 2024. PPGs have until July 31, 2024, to start paying at TRI rates for any new claims.
  7. When will PPGs' capitation rates to their downstream providers need to include TRI rates?

    As soon as possible, but no later than December 31, 2024.
  8. What are the attestation requirements to ensure PPGs have paid their downstream providers?

    DHCS requires health plans to attest that rendering providers are being paid in a manner that is compliant with the TRI APL. As such, Health Net will also require PPGs to attest to complying with TRI requirements, including confirmation that rendering providers are paid in accordance with the TRI APL. Health Net will implement an attestation process that includes an attestation form. Attestation forms must be signed by the PPG's finance executive and include the accounting documentation that TRI funds received from Health Net were distributed to PPGs' downstream providers.
  9. Will Health Net be amending capitated contracts to include TRI rates?

    Yes. Capitated agreements must be amended to reflect the additional payment amounts beyond the base capitation rates. The amendments will include TRI capitation rates for 2024, and separately for 2025. Amended contracts will also include language related to compliance with TRI requirements.
Last Updated: 06/06/2024