The Department of Health Care Services (DHCS) implemented the ten percent payment reduction mandated by Welfare and Institutions Code (W & I Code), Section 14105.19 provided in the Budget Trailer Bill of 2008. This reduction applies to claims with dates of service effective July 1, 2008.

It has been found that the reduction was applied incorrectly to pharmacy claims under the Family PACT program. The payment system was fixed so that the Point of Service (POS) Family PACT pharmacy claims processed after 2:00 a.m. on July 17, 2008 were not reduced by ten percent. The claims that come in batch will not be reduced in this week’s cycle.

No action is required from providers. It is anticipated that EDS will automatically reprocess Family PACT pharmacy claims that were reduced incorrectly no later than the end of next week.