Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services through various delivery systems, including managed care pursuant to Medi-Cal managed care plan contracts. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

This bill would authorize the department to enter into one or more comprehensive risk contracts with an alternate health care service plan (AHCSP), as defined, to serve as a primary Medi-Cal managed care plan for certain eligible beneficiaries in geographic regions designated by the department, as specified. The bill would authorize the department to contract with an AHCSP as a Medi-Cal managed care plan in any geographic region of the state for which federal approval is available, for which the AHCSP maintains appropriate licensure or an approved exemption from the Department of Managed Health Care, and in which the AHCSP already provides commercial coverage in the individual, small group, or large group market. The bill would, among other things, prohibit the AHCSP from denying enrollment to any of those eligible beneficiaries, unless the department or the Department of Managed Health Care has ordered the AHCSP to cease enrollment in an applicable service area. The bill would require the contract with the AHCSP to include the same standards and requirements, except with respect to enrollment, as for other Medi-Cal managed care plans, as specified. The bill would require the Health Care Options Program, which is an entity overseen by the department for Medi-Cal managed care education and enrollment, to disenroll any member of an AHCSP if the member meets any one of the reasons for disenrollment enumerated in certain regulations, except as specified.

The bill would require the AHCSP to enter into a memorandum of understanding (MOU) with the department, which would include specified standards or requirements and the AHCSP’s commitment to increase enrollment of new Medi-Cal members and any requirements related to the AHCSP’s collaboration with and support of applicable safety net providers. The bill would require the department to post the MOU and a specified implementation report on its internet website.

The bill would require the AHCSP, as part of the MOU, to work with federally qualified health centers (FQHCs) in AHCSP service areas selected by the AHCSP and the department, at the request of the FQHC, to provide assistance with population health management and clinical transformation. The bill would require the department and the AHCSP to identify the highest need specialties and geographic areas where the AHCSP would provide outpatient specialty care and services to address related needs, as specified.

The bill would require the AHCSP to periodically consult with counties and other affected local stakeholders in those geographic regions in which the AHCSP operates, as specified. The bill would require the AHCSP to enter into MOUs with local agencies pursuant to Medi-Cal managed care contract requirements.

Under the bill, except when an AHCSP was already contracted with the department as a Medi-Cal managed care plan as of January 1, 2022, contracts entered into pursuant to these provisions would be effective no sooner than January 1, 2024, as specified. The bill would require that the capitation rates established for contracts be set annually in accordance with related provisions, as specified.

The bill would require the department to conduct an assessment of the AHCSP’s readiness to meet behavioral health network adequacy requirements, and to post those findings on the department’s internet website, as specified.

The bill would authorize the department to implement these provisions through plan letters or other similar instructions. The bill would condition implementation of these provisions on receipt of any necessary federal approvals and the availability of federal financial participation. The bill would require the department to report to the health and fiscal committees of the Legislature, in 2026, to provide an update on the implementation of these provisions.

Existing law authorizes the department to establish a Whole Child Model program, under which managed care plans served by a county organized health system or Regional Health Authority in designated counties provide California Children’s Services (CCS) to Medi-Cal eligible CCS children and youth.

This bill would, commencing no sooner than January 1, 2024, expand managed care plans under the Whole Child Model program to also include the above-described AHCSPs.