What Providers Still Need to Know About Medi-Cal Payment Reform

During a recent webinar, I walked attendees through a tour of the regulatory turbulence that has reshaped California’s Medi-Cal behavioral health billing since 2023. For providers still adjusting to the changes, the session doubled as both a brief history lesson and a preview of what’s ahead. 

Here’s a high-level look at what attendees learned about Medi-Cal’s recent reforms. 

 

A Reform Three Years in the Making

2023 was the year CalAIM payment reform applied perhaps the largest change in decades to Medi-Cal billing. The reform introduced an entirely new set of CPT and HCPCS codes and rewrote the basic mechanics of how services are billed: some codes now bill in fifteen-minute units while others bill as a single unit regardless of time up to a defined cap. Reimbursement rates began varying by provider type meaning the same service could pay differently depending on who delivered it. Add-on codes entered the picture as well, starting with G2212 for prolonged duration along with standardized billing for interactive complexity and for encounters that used language interpretation. 

The thorniest change was a new same-day duplicate service rule: if a provider billed the same service to the same client on the same date twice, the second claim would simply be denied. The fix requires providers to combine same-day services into a single claim before billing. 

 

The Twofold Response

Netsmart responded to these changes with a twofold strategy. On one side sat the technology: myAvatar, the electronic health record used by both counties and provider agencies across California, had to generate compliant claims and — on the county side — adjudicate them using the same state logic. On opposite side sat education, including user groups Netsmart began running in 2022, a year before the reform took effect, to help clients understand and configure the coming changes. Tools like the Service Fee Cross Reference helped agencies map billing outputs to program, rendering practitioner and place of service while automation quietly generated add-on codes like G2212 based on documented duration rather than asking users to remember them. 

 

T-Code Swapping and the End of G2212

The reform continued evolving into 2024. There's a shift I refer to as “T-code swapping,” tied to coordination-of-benefits issues: when Medi-Cal is billed after Medicare and a service runs 68 minutes or longer, the claim now uses codes like T2024 or T2021 rather than the standard assessment or therapy codes. New supervisor-claiming rules required listing a supervising provider’s name and NPI alongside the rendering provider for certain staff, which myAvatar supports configuring by program, payer and date range. And in one of my favorite changes, the state retired G2212 altogether, replacing it with 99415 and 99416 as extensions to E/M codes 99205 and 99215 — a swap Netsmart automation absorbed almost immediately. 

 

What’s Next: BHSA and BH Connect

Looking ahead, there are two initiatives layered on top of the original reform. The Behavioral Health Services Act carries its own billing implications still taking shape. BH Connect, an optional program counties may adopt, represents a bigger departure: rather than billing per encounter, qualifying programs — assertive community treatment, its forensic counterpart, multisystemic therapy for youth and supported employment among them — bill a monthly bundled claim based on how many contacts a dedicated team logs with a client during the month, with the state paying a full or partial rate depending on whether a contact threshold is met. 

Three years into a multiyear initiative, the steady pace of response to change may be the most useful takeaway of all for agencies still adjusting. The specific codes and requirements will keep shifting but the underlying story stays the same: Medi-Cal billing in California is a moving target and the providers who keep up are the ones who treat their technology and their vendor relationships as part of the compliance strategy rather than an afterthought.