HEALTHmattersMD

If we could summarize 2025 in one word, it would be investment. Over the course of the year, the Health Plan of San Mateo (HPSM) raised rates for multiple lines of business and provider types. In addition to these financial investments, as part of our larger primary care investment strategy, we also launched two new initiatives: Primary Care Provider Grants and Primary Care ACT. Plus there are more rate increases to come next year!

These past and future rate increases include:

April 1, 2025: Medi-Cal and CareAdvantage rates increased to 175% of Medi-Cal

On April 1, 2025, HPSM increased its Medi-Cal rates for physician services within primary care and specialty care, as well as our standard network rates for CareAdvantage. These rate increases comply with both the:

• Department of Health Care Services (DHCS) payment methodology that compensated for the elimination of Prop 56 payments for physician services
• Adoption of site-of-service differential reimbursement

HPSM’s former network rates for professional services under most Medi-Cal agreements were structured as 100%-123% of Medi-Cal, with certain highly-impact specialty types reimbursed at 175% of Medi-Cal. Since April 1, HPSM has raised network rates for professional codes to 175% of Medi-Cal, bringing reimbursement closer to Medicare reimbursement. Plus, HPSM has invested significantly in rates for office visit codes as part of our ongoing investment in preventative care and time-intensive services. 

July 1, 2025: Behavioral health network rate increased to 105% of Medicare

As of July 1, 2025, HPSM increased its standard network rates for behavioral health providers contracted with HPSM to 105% of Medicare (from 100% of Medicare). Plus, the 2% sequestration is no longer applied to Medi-Cal or HealthWorx. Providers contracted through Medi-Cal, CareAdvantage and HealthWorx with HPSM are eligible for these rate increases if they are currently billing under provider type “Behavioral Health” or with a MH (“Mental Health”) taxonomy.

Plus, HPSM has not adopted the Medicare licensure differential, giving an additional increase over Medicare to marriage and family therapists, mental health counselors, nurse practitioners and physician assistants. 

November 1, 2025: Primary care capitation rate increased by 20% annually

On November 1, 2025, HPSM increased total base capitation payments for PCPs contracted with HPSM through Medi-Cal by over 20% annually to be at or above the new fee-for-service equivalent. Based on 2024 utilization figures, all contracted PCPs can expect an increase to their average per-member-per-month (PMPM) capitation payments. This is one of several primary care payment increases planned for the next two years. 

Additionally, HPSM simplified the rate table to promote transparency and financial planning. Finally, there are currently no changes to the scope of capitated services or the Panel Engagement Capitation Bonuses incentive program, which allow providers to earn up to 30% additional capitation each quarter. 

2026: Future investments through rate increases 

HPSM will continue to explore opportunities to invest in our provider network through rate increases. For example, chiropractors and podiatrists will see rate increases in 2026. 

HPSM will require all incoming professional services submitted on professional claims forms to include taxonomy codes starting on January 1, 2026. After a brief grace period, any professional claims submitted without taxonomy codes after April 1, 2026 will be denied. This change will directly impact both contracted network providers and out-of-network providers. 

A potential bonus is that it may increase your reimbursement, as certain taxonomies entitle providers to higher rates. HPSM appreciates your support in complying with this requirement, as it will help increase reporting accuracy and ensure further payment accuracy. 

About taxonomy codes

Claim filing instructions

Electronic claims (837 EDI file format)

• Billing taxonomy codes are typically included in EDI loop 2000A for professional claims (ASC X12 837-P).
• Rendering taxonomy codes are included in EDI loop 2310B for professional claims (ASC X12 837-P).

Assessment, coaching and technical assistance

This fall, the Health Plan of San Mateo (HPSM) launched Primary Care ACT – our latest initiative designed to support primary care practices in our network through Assessment, Coaching and Technical assistance. This is one of our Primary Care Investment Strategy’s key initiatives. 

At this time, only primary care practices contracted with HPSM are eligible to participate. As of early December 2025, primary care practices representing over 70% of HPSM-assigned members have completed their assessments (the first of this program’s three components). That means they:

• Are eligible for incentive payments ranging from $2,500 - $10,000 (based on how many contracted sites complete assessments)
• Have aligned their staff in a shared understanding of team capabilities and culture
• Are eligible for the next phase of the initiative: practice coaching provided by HPSM

Thank you to all primary care practices that have participated so far!

Sign up by December 31, 2025 to participate

Email our partner, the PopHealth Learning Center (PHLC), to tell them you want to participate in Primary Care ACT. After you complete your assessments, PHLC will schedule a follow-up meeting with you to review your team’s responses in aggregate.

If you have questions about Primary Care ACT, email Scott Fogle, Manager of Strategic Network Investments.