The Department of Health Care Services (DHCS) is implementing a one-time $140 million* Equity and Practice Transformation (EPT) Program for primary care practices to advance health equity and reduce disparities by working on up-stream care models, improving quality of care, value-based payment models, and practice transformation. These efforts aligned with value-based payment models will allow Medi-Cal providers to better serve the state’s diverse Medi-Cal enrollee population. To align with the goals of the DHCS Comprehensive Quality and Strategy and Health Equity Roadmap and “50 by 2025: Bold Goals” Initiative, these funds will incentivize delivery system transformation in primary care practices (pediatrics, family practice, adult medicine primary care, primary care OB/GYN, and behavioral health providers in primary care settings) and prepare them to participate in value-based payment contracting. These funds are allocated to three components throughout the phases of the program year(s) described below.
*The original version of EPT had a total of $700 million in funding. In the final State of California Fiscal Year 2024-2025 budget, the amount of funding was reduced to $140 million. Please see
this website for more on the budget.
Medi-Cal Managed Care Plan (MCP) Initial Provider Planning Incentive Payments
$25 million (12.5 million General Fund) incentivized MCPs to identify and work with
small-to medium-sized independent practices in 2023 using a standardized
assessment PhmCAT to
support these practices as they developed practice transformation plans and
applications to the larger EPT Provider Directed Payment Program.
EPT Provider Directed Payment Program
$97 million ($48.5 million General Fund) over 3 years supports delivery system transformation, specifically targeting primary care practices that provide primary care pediatrics, family medicine, internal medicine, primary care OB/GYN services, or behavioral health services that are integrated in a primary care setting to Medi-Cal members.
A total of 197 practices are participating in the program with the potential to earn an adjusted maximum payout based on the assigned Medi-Cal lives and successful completion of activities/milestones.
The selection process for the Provider Directed Payment Program included two steps: (1) using a DHCS provided rubric, a review and points scoring (out of 90 total) of all applications by the MCP indicated in the practice's application, and then (2) a DHCS review of applications recommended by the MCPs. Please see EPT Cohort 1 Selection Methodology for a detailed description of the selection process for practices.
Technical assistance and milestones focus on the following population health management (PHM) domains: access, empanelment, data to enable PHM, care delivery model (includes mental health, social health, and care delivery for populations of focus), value-based payment, and key performance indicators. Please see The Population Health Learning Center for more on milestones.
The Payment Structure includes the following:
- Total potential payments = Assigned Medi-Cal members (from November 2024) × PMPY multiplier.
- Per milestone payment = Total potential payment ÷ 23 or 25 milestones (depending on how many milestones are relevant to the practice).
Example of Practice Payment Scenario:
- Assigned members for primary care: 920
- Multiplier/add-on: $305
- Total Potential Practice Payment (Assigned member x multiplier): 920 x $305= $280,6000
- Payment per Milestone achieved (Total Potential Practice Payment / 25 milestones): $11,224
Table 1.
A
| 1
| 500
| $580.00
|
B
| 501
| 700
| $397.00
|
C
| 701
| 850
| $349.00
|
D
| 851
| 1000
| $305.00
|
E
| 1001
| 1200
| $300.00
|
F
| 1201
| 1400
| $260.00
|
G
| 1401
| 1600
| $180.00
|
H
| 1601
| 1800
| $170.00
|
I
| 1801
| 2000
| $162.00
|
J
| 2001
| 2250
| $144.00
|
K
| 2251
| 2500
| $146.00
|
L
| 2501
| 2750
| $145.00
|
M
| 2751
| 3000
| $121.00
|
N
| 3001
| 3250
| $110.00
|
O
| 3251
| 3500
| $106.00
|
P
| 3501
| 4000
| $95.00
|
Q
| 4001
| 4500
| $88.00
|
R
| 4501
| 5000
| $85.00
|
S
| 5001
| 5500
| $79.00 |
T
| 5501
| 6000
| $77.00
|
U
| 6001
| 6500
| $61.50
|
V
| 6501
| 7000
| $50.25
|
W
| 7001
| 7500
| $59.00
|
X
| 7501
| 8000
| $53.00
|
Y
| 8001
| 8500
| $49.50 |
Z
| 8501
| 9000
| $50.50
|
AA
| 9001
| 9500
| $48.00
|
BB
| 9501
| 10000
| $46.00
|
CC
| 10001
| 11500
| $40.50
|
DD
| 11501
| 13000
| $45.00
|
EE
| 13001
| 14500
| $33.30
|
FF
| 14501
| 16000
| $40.00
|
GG
| 16001
| 17500
| $38.00
|
HH
| 17501
| 20000
| $37.00
|
II
| 20001
| 22500
| $36.50
|
JJ
| 22501
| 25000
| $31.50
|
KK
| 25001
| 27500
| $30.50
|
LL
| 27501
| 30000
| $28.50
|
MM
| 30001
| 35000
| $28.00
|
NN
| 35001
| 45000
| $26.00
|
OO
| 45001
| 55000
| $22.50
|
PP
| 55001
| 60000
| $28.50
|
QQ
| 60001
| 65000
| $23.00
|
RR
| 65001
| 75000
| $22.00
|
SS
| 75001
| 90000
| $22.00
|
TT
| 90001
| 105000
| $21.00
|
UU
| 105001
| 120000
| $18.00
|
This methodology applies to all EPT milestones. The EPT program is subject to annual approval by CMS and thus may be submit to changes. The EPT program is subject to future budgetary authorization and appropriation by the California Legislature and the necessary federal approvals of the directed payment arrangement.
Note: Payment calculations for 2024–2026 are in accordance with CMS guidelines issued in March 2025 and based on November 2024 Medi-Cal member counts, excluding D-SNP members (as required by CMS).
Population Health Learning Center
$18 million ($9 million General Fund) over 3 years funds the program office for the Provider Directed Payment Program. The program office will be monitoring and supporting implementation of practices' transformation activities, sharing, and spreading of best practices, facilitating technical assistance for practices (through state and national partners), and support the achievement of the state’s quality and health equity goals. DHCS partners with the Population Health Learning Center to provide the Learning Collaborative and serve as the program office for the Provider Directed Payment Program.
Resources
Please contact us with questions at ept@dhcs.ca.gov.
