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Elimination of Prop 56 Supplemental Payments
Beginning 1de julio de 2026 , Prop 56 supplemental incentive payments to Medi-Cal Dental providers will be discontinued. Claims for services on or after this date will be reimbursed at the Schedule of Maximum Allowances (SMA) only.
Visión general
On November 8, 2016, California voters approved the California Healthcare, Research and Prevention Tobacco Tax Act (commonly known as Prop. 56) to increase the excise tax rate on cigarettes and tobacco products. Under Prop. 56, a specified portion of the tobacco tax revenue is allocated to DHCS for use as the nonfederal share of health care expenditures in accordance with the annual state budget process. In accordance with Assembly Bill 120 (Ch. 22, §3, Item 4260-101-3305, Statutes of 2017), Senate Bill 856 (Ch. 30, §3, Item 4260-101-3305, Statutes of 2018), and approved State Plan Amendments (SPA) 17-031 and SPA 18-0024, DHCS provided supplemental payments during Fiscal Year (FY) 2017-18, and FY 2018-19, as an increase to the current dental Schedule of Maximum Allowances (SMA) for specific dental procedures. The supplemental payment, effective July 1, 2017, through June 30, 2018, was at a rate equal to 40 percent of the SMA for specific restorative, endodontic, prosthodontic, oral and maxillofacial, adjunctive, and visits and diagnostic services. For FY 2018-19, the existing codes and supplemental payments were continued with the exception of 8 codes that were increased and 23 new codes were added (including general anesthesia, periodontal, and orthodontia) to receive supplemental payments which vary between 20-60 percent of the SMA, or a specific dollar increase effective July 1, 2018 through June 30, 2019.
Pursuant to Assembly Bill 74 (Chapter 23, §3, Item 4260-101-3305, Statutes of 2019), and approved SPA 19-0038, DHCS was authorized to continue the supplemental payments for the specified codes identified for FY 2018-19, for an additional 29 months effective July 1, 2019 through December 31, 2021.
SPA 20-0015 specifies the removal and addition of Current Dental Terminology (CDT) codes eligible for supplemental payments using Prop 56 funds. New procedure codes approved in SPA 20-0015 are effective March 14, 2020 through December 31, 2021.
Pursuant to AB 128 (Chapter 21, Statutes of 2021, §4, Item 4260-101-3305) and approved SPA 21-0030, DHCS is authorized to continue the supplemental payments for the specified codes.
Noticia
On May 14, 2025, the Fiscal Year (FY) 2025-26 Governor’s May Revision Budget era published and included the elimination of approximately $504 million in FYs 2025-27 and $550 million ongoing for Prop. 56 supplemental payments to Medi-Cal Dental providers.
Senate Bill 101 (Statutes of 2025, Chapter 4, Item 4260-101-3305) amended the Budget Act of 2025, including changes to the allocation of Prop. 56 tobacco tax revenues. The budget eliminates the use of Prop 56 funds for supplemental payments to Medi-Cal providers and instead shifts these expenditures to the General Fund. The elimination of these supplemental payments was proposed in the Governor’s May Revision. The elimination of these supplemental payments will begin in the 2026-27 fiscal year.
Prop. 56 supplemental incentive payments to Medi-Cal Dental providers will discontinue effective July 1, 2026. Claims submitted for date of service on or after July 1, 2026, will be reimbursed solely at the Schedule of Maximum Allowances (SMA) amount. The last supplemental payments will be issued for services rendered on or before June 30, 2026. A one-year claims runout period begins July 1, 2026, through June 30, 2027, for submission of any outstanding claims for services. Failure to submit claims by the runout deadline may result in claims being denied or paid at base rates only.
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