SMCMA Physician

California Voters Approve Prop 56

CMA’s one-time $1 million investment reaps billions a year for health care in CA

In 2016, and with a one-time $1 million investment, the California Medical Association (CMA) led a coalition of health care advocates to take on Big Tobacco and drastically expand funding for existing health programs and research into cures for cancer and other illnesses caused by tobacco products.

Under CMA’s leadership, California voters overwhelmingly approved Proposition 56, which imposed a $2 per pack tax hike on tobacco products that will generate over $1 billion a year dedicated to increasing access to health care by improving provider payments and other crucial health care programs.

Provider Payments

The largest portion of Proposition 56 funds – over $500 million a year with an additional $500 million federal match – is dedicated to increasing provider payments in the Medi-Cal program, which serves one-third of the state’s population and half of the state’s children, so that more Medi-Cal patients can access care when they need it most. The tobacco tax funds are being used to provide supplemental payments for a total of 23 CPT codes, through both the fee-for-service and managed care delivery systems.  

DHCS will be increasing the supplemental payment for the eligible CPT codes to 85-100 percent of Medicare. This will in many instances more than double the amount that physicians are paid for caring for Medi-Cal patients. 

While California’s base payment rates for Medi-Cal physicians are still among the nation’s lowest, these supplemental payments will help increase access for the nearly 14 million Californians, including half of the state’s children, currently covered by the program.

Graduate Medical Education

Thanks to Prop. 56, the California Legislature created a $40 million graduate medical education (GME) fund for the University of California (UC) to sustain, retain and expand GME programs, with the goal of increasing the number of primary care and emergency physicians in California. This program will be administered by CMA’s foundation—Physicians for a Healthy California (PHC)—on behalf of the UC and in coordination with a five-member executive board and 15-member Advisory Council. PHC expects to release these funds to GME programs in the current fiscal year.

This GME funding is critically important as California is facing a serious physician shortage. A robust and well-trained primary care workforce is essential to meeting the health care demands of all Californians. There is overwhelming data that physicians who complete training in California are very likely to set down roots and practice in the communities in which they trained. This funding will allow California to train more physicians to address the serious physician shortages and resultant access to care challenges that are plaguing our state.

CMA is committed to ensuring California is training enough physicians to meet current and future demand. Expanding funding for graduate medical education to ensure that there are enough residency slots to train physicians in regions where health care services are needed most is one of our top priorities. 

Physician Loan Repayment

The Prop. 56 tobacco tax also provided $190 million in expanded loan repayment opportunities for physicians practicing in underserved areas. Nationally, for the class of 2017, 75 percent of medical school graduates had education debt, with a median medical education debt of $180,000.

CMA’s modest investment in support of Proposition 56 and its leadership in anti-tobacco initiatives, which will generate billions in new health care dollars, are part of our greater effort to combat the critical physician workforce shortage in California, which limits access to health care for patients – particularly in rural communities.

To learn more about how this money may apply to you as a physician or medical group, visit cmadocs.org/prop56.