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CHW Reimbursement: Comparing Rates Nationally and in California

August 27, 2024 |  By Mary Hunt Moore and Margaux McFetridge

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Community Health Worker (CHW) compensation is central to efforts to make CHW services more accessible for Medicare and Medicaid enrollees and others who may benefit from them.

The Patchwork of CHW Compensation 

CHWs and CHW organizations often rely on a patchwork of funding sources to maintain their operations and support their work, including:

  1. Providers and Healthcare Organizations: Hospitals, clinics, and other healthcare providers often directly employ CHWs to provide care coordination, health education, and other services intended to improve health outcomes of patients and reduce costs. These organizations include CHW salaries in their operational budgets.
  2. Health Plans: Health insurers, including Medicaid Managed Care Organizations (MCOs), similarly hire or contract with CHWs to provide services intended to improve health outcomes for members and reduce costs.
  3. Public and Private Grants: Many CHW programs are supported by grants from federal, state, and local governments, as well as foundations. These grants can provide crucial funding for CHW salaries and program operations, but they typically require continual applications and renewals with uncertain sustainability.
  4. Medicare Reimbursement: The services that CHWs provide, dubbed Community Health Integration (CHI) services, are newly reimbursable through Medicare as of 2024.
  5. Medicaid Reimbursement: Medicaid often provides lower CHW reimbursement rates compared to Medicare, and methods and rates of reimbursement vary widely by state. Roughly half of states currently pay for CHW services through Medicaid. States use a variety of funding mechanisms to reimburse for CHW services, including fee-for-service (FFS), managed care, a combination of FFS and managed care. One state, West Virginia, uses a monthly capitation rate for all pregnant and postpartum individuals eligible for CHW services.

      Despite these diverse funding streams, achieving sustainability remains challenging for many CHW programs. Medicaid, while a critical source of funding, often provides lower reimbursement rates compared to Medicare, making it difficult for CHW organizations to cover their costs and offer competitive wages.

      Trends in CHW Reimbursement Rates

      Reimbursement rates for CHW services through Medicaid vary significantly across states.

      For example, the FFS rate for a 30-minute CHW session ranges from $18.11 in Louisiana to $35 in New York.

      Medicaid rates for CHW services are lower than Medicare across the board.

      • Medicare CHI Rates:
        • The average rate for a 60-minute CHI session with a licensed or certified CHW outside of a facility (billing code G0019) is $82.83.
        • Rates fluctuate nationally based on location and other factors. The lowest hourly Medicare CHI rate is approximately $75 in mostly rural areas, and the highest is approximately $100 in some parts of California.
      • Medicare Relative Value Units (RVUs):
        • CHW billing codes 98960, 98961, and 98962 (used in California and other states) are not used by Medicare. Instead, there are Medicare RVUs for these codes, which are a measure of value used for the reimbursement of Medicare physician services. The average non-facility RVUs for codes 98960, 98961, and 98962 for 2024 is $34.
      • Medicaid CHW Rates:
        • Lowest Medicaid rate: Louisiana’s rate for billing code 98960 is $18.11 for 30 minutes, or $36.22 for an hour, which is approximately 48% of the Medicare CHI rate for most of the state at $75.17 per hour and approximately 46% of the Medicare CHI rate in New Orleans at $78 per hour.
        • Highest Medicaid rate: New York’s rate for billing code 98960 is $35 for 30 minutes or $70 for an hour, which is about 90% of the Medicare CHI rate for most of the state at $77.64 per hour. When compared to the Medicare CHI rate in the NYC suburbs, which is $93.83 per hour, New York’s Medicaid CHW rate is 75% of the Medicare CHI rate.

        CHW Rates in California: 2024-25 Budget and Proposition 35 

        California’s latest budget deal negotiations and the final 2024-25 budget will slightly increase Medi-Cal CHW FFS and managed care rates to 100% of Medicare for calendar year 2025 (up from 87.5% for calendar year 2024), using the Medicare RVUs. We anticipate this increase will bring the Medi-Cal CHW rate up to $31.74 (currently $27.54) for 30 minutes. The rate increases are funded through California’s MCO tax and are set to begin January 1, 2025.

        Note: The CHW rate increase in the 2024-25 budget will not go into effect if the voter initiative Proposition 35 on the November ballot passes. The ballot measure, called The Protect Access to Healthcare Act of 2024, would permanently fund a wide range of Medi-Cal provider rate increases, but does not specifically include a CHW rate increase. The voter initiative would instead fund a CHW grant program starting in 2027 that would receive $32 million in funding annually, but only if the amount of revenue generated by the tax exceeds $4.7 billion. The grant program would support increased access to CHWs in Medi-Cal programs and funding criteria would be informed by stakeholder input.

        California Medicaid and Medicare Rate Comparison:

        • Medicare CHI rate in Los Angeles: $88 for a 60-minute session with a CHW ($82 in rural areas).
        • California’s Medi-Cal FFS rate: $27.54 for a 30-minute, one-on-one CHW visit (as of July 15, 2024).

        Opportunity for Change in CHW Reimbursement

        Medicare’s recent inclusion of CHW services is an important policy development. CHW organizations now have an incentive to focus on a new population with a higher reimbursement, which can help to overcome some of the sustainability issues when only serving Medicaid enrollees.

        As California and other states continue to recognize the value of CHWs in Medicaid and the delivery of whole-person care, the CHI Medicare rates will hopefully provide a new benchmark in rate-setting to ensure adequate reimbursement for this critical component of our health care system.

        Transform Health is a nationally certified women and minority led health care consulting firm. Reach out to us today if you would like to work together. Contact Heather Bates, COO, and VP of Stakeholder Engagement at heather@transformhc.com. We would love to hear from you!