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Medi-Cal Provider Rates to Increase Under Governor’s 23-24 Budget

Despite a projected $31.5 billion shortfall, Governor proposes significant investment in Medi-Cal system

Last week, Governor Gavin Newsom released his revised 2023-24 state budget, proposing the reinstatement of the Managed Care Organization (MCO) Tax, which will result in $19.4 billion in revenue from April 1, 2023, through December 31, 2026, to help maintain and increase investment in the Medi-Cal program, CMA reports.

"In a win for physicians and patients, the budget proposal released today includes an increase to some Medi-Cal provider rates for t

he first time in more than two decades."

Over the past several months, the California Medical Association (CMA) has advocated to reinstate and increase the MCO tax, which expired late last year, to improve Medi-Cal access to care by raising physician reimbursement rates.


In a win for physicians and patients, the budget proposal released today includes an increase to some Medi-Cal provider rates for the first time in more than two decades.


Effective January 1, 2024, the budget proposal would increase provider rates to at least 87.5% of Medicare for primary care, maternity care, and non-specialty mental health services. Starting in the 2024-25 budget year, the provider rate increases would be expanded to some additional healthcare services and specialists.


Gov. Newsom’s newly proposed rate increases will be an adjustment to base rates, and the California Department of Health Care Services has indicated it will direct managed care plans to pay providers at least these rates.



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