CHA News

DHCS Issues 2019-21 Hospital Fee Invoices

For CFOs

This post has been archived and contains information that may be out of date.

The Department of Health Care Services (DHCS) is issuing invoices this month for the 2019-21 Hospital Fee Program.

Managed Care 

On Dec. 3, DHCS mailed invoices (“MC1 PT” and “MC2 PT”) for the 2019-21 Hospital Fee Program managed care passthrough cycle (July 2019 through December 2020).

The fee payments are due to DHCS on Dec. 23, and DHCS prefers them to be made via electronic funds transfer. DHCS will use the fees collected as the non-federal share of payments made to health plans in January. As previously shared in CHA News, DHCS agreed to expedite this cycle due to the financial impact that COVID-19 is having on hospitals. Because of a temporary enhanced federal matching rate on Medicaid payments, this also is decreasing the fees needed to make the payments. Therefore, hospitals should expect their invoices at approximately 85% of the modeled amount.   

What’s next? 

As health plans receive their capitation payments over the month of January, CHA will work directly with them to reconcile the funding available to include in the managed care passthrough cycle. Historically, the total funding available has been  95-99% of the modeled amount.  

  • CHA anticipates to have payment schedules available for both hospitals and health plans by Feb. 5.  
  • Hospitals should expect to receive payments from the health plans by March 31. 


On Dec. 18, DHCS will mail the fee-for-service (FFS) invoices for cycles 5-8 of the 2019-21 Hospital Fee Program. As hospitals will find when they receive the invoices, DHCS is delaying the FFS Cycle 5 by two weeks. DHCS is attempting to reduce the cash constraints hospitals will be under as they await managed care passthrough payments from the plans in February/March. 

FFS Cycle 5  Original Schedule  New
Fees Due to DHCS  1/4/2021 1/19/2021
FFS Payment  1/23/2021  2/8/2021

There are no anticipated changes to FFS cycles 6-8.