If you’re running a home health or hospice agency in California, you’ve probably wondered: Should I consider working with Medi-Cal patients? Is it worth the lower reimbursement rates, or will it hurt my business?
At The Home Health Consultant, we’ve helped countless agencies navigate Medi-Cal enrollment, reimbursement, and compliance. We’ve seen agencies thrive—and others struggle—when adding Medi-Cal to their payer mix.
In this guide, we’ll break down:
- how Medi-Cal differs from Medicare
- the pros and cons for your agency
- how to enroll if it makes sense for your business.
By the end, you’ll know exactly whether Medi-Cal is a smart move for your agency and how to enroll if you decide it's right for you.
What’s the Difference Between Medicare & Medi-Cal?
Before deciding whether to work with Medi-Cal, it's important to understand how it differs from Medicare. The first thing to understand is that Medicare and Medi-Cal serve different populations and operate under different funding structures.
- Medicare is a federal program primarily serving individuals 65 and older. However Medicare can also serve some younger people with disabilities. It covers hospital stays (Part A), outpatient care (Part B), and prescription drugs (Part D).
- Medi-Cal is California’s version of Medicaid, a state-funded program for low-income individuals. While it follows some federal guidelines, each state operates its Medicaid program differently. This means that Medicaid in one state may look very different from Medi-Cal in California.
For home health and hospice providers, these two programs function very differently in terms of:
- reimbursement rates
- documentation requirements
- approval processes
Understanding these distinctions will help you determine whether Medi-Cal is a viable option for your agency.
Should Your Home Health or Hospice Agency Work with Medi-Cal?
Now that you understand the difference between Medicare and Medi-Cal, the next question is whether participating in Medi-Cal is the right choice for your agency. The answer depends on your agency type and financial considerations.
Should Your Hospice Agency Work with Medi-Cal?
Medi-Cal is often a more viable option for hospice care. Unlike Medicare, it provides consistent payments without a cap system, making financial planning more predictable.
Should Your Home Health Agency Work with Medi-Cal?
Many home health agencies opt out of Medi-Cal due to lower reimbursement rates, which may not cover the cost of providing certain elements of care. However, accepting Medi-Cal patients can expand your agency’s reach and help build trust with referrers like doctors and hospitals who struggle to place Medi-Cal patients. Establishing these relationships can lead to future referrals for higher-paying insurance types.
For new home health agencies, starting with Medi-Cal as one of your first insurers may put your agency in financial jeopardy. This can be attributed to low reimbursements, a pre-authorization process, and a longer “billing to payment” timeframe than Medicare. Starting to work with Medi-Cal after you have a consistent patient base from other insurance types can help expand your patient base with limited financial hit.
Just because hospice agencies typically see more benefit from working with Medi-Cal, it doesn’t mean your home health agency is automatically a bad candidate. Be sure to evaluate your agency’s specific circumstances before making an informed decision.
How Can Home Health & Hospice Agencies Enroll as a Medi-Cal Provider?
If you’ve decided to move forward with Medi-Cal, the next step is enrollment. If your agency is already Medicare-certified, you are automatically issued a Medicare provider number. However, Medi-Cal requires a separate application process. Here’s what you need to do:
1. Apply for Medi-Cal Enrollment: You are not automatically enrolled in Medi-Cal when you receive your Medicare accreditation. You must submit an application to the California Department of Public Health (CDPH). The CDPH unit responsible for receiving Medi-Cal applications is the Provider Certification Unit (PCU). Applications can be sent via email to PCU@cdph.ca.gov.
As of the publishing of this article, DHCS Provider Enrollment is responsible for processing initial applications and adding providers to the Medi-Cal system. If you need a status update or want to request expedited processing, you can contact them at PED-FSP@dhcs.ca.gov.
2. Submit Required Documentation: This includes licensing, accreditation, and other supporting paperwork that verifies your eligibility to provide services.
3. Receive Your Approval Packet: Once approved, you will receive a packet in the mail. This includes your Medi-Cal PIN, which is essential for creating your account and managing reimbursement. Keep the letter with your Medi-Cal PIN in a safe place. It is very hard to retrieve the PIN if lost, and you will need it for every Medi-Cal transaction, including any eligibility inquiry or billing.
Set Up Your Account in the PAVE Portal: The Provider Application and Validation for Enrollment (PAVE) Portal is the online system for managing Medi-Cal enrollment and claims. Your PIN from the approval packet will allow you to create an account and start billing for services. You can find an example of what the PAVE portal login page looks like below.
Once these steps are completed, you will be officially enrolled as a Medi-Cal provider and able to accept Medi-Cal patients.
How to Know Whether Medi-Cal Enrollment is Right for Your Home Health or Hospice Agency?
Deciding whether to work with Medi-Cal comes down to understanding your agency’s operations. If you’re in an area with a high population of Medi-Cal beneficiaries, the expanded patient base may justify the lower reimbursement rates.
But if compliance and reimbursement concerns outweigh the benefits, it may be better to focus solely on other payor sources.
At The Home Health Consultant, we primarily work with Medicare accredited agencies. However, after working in the home health and hospice industry over 20 years, we wanted to share our knowledge of Medi-Cal and the application process. After reading, you should be fully equipped to evaluate your options and streamline the Medi-Cal enrollment process.
Want to navigate the home health and hospice industry with confidence? The article below breaks down the industry structure. Understanding how regulatory bodies interact can help you avoid compliance pitfalls and streamline your path to success. Click below to explore the industry structure and how it affects your agency.
*This article was written in consultation with Kelly McCarthy & Mariam Treystman.
*Disclaimer: The content provided in this article is not intended to be, nor should it be construed as, legal, financial, or professional advice. No consultant-client relationship is established by engaging with this content. You should seek the advice of a qualified attorney, financial advisor, or other professional regarding any legal or business matters. The consultant assumes no liability for any actions taken based on the information provided.
