This week, our In Focus section reviews the California Medicaid (Medi-Cal) managed care request for proposals (RFP) released by the California Department of Health Care Services (DHCS) on February 9, 2022. DHCS is procuring contracts for commercial plans for three of the Medi-Cal managed care plan models in 21 counties, serving approximately 3 million beneficiaries. Contracts will be awarded to one managed care organization (MCO) in each of the Two-Plan model counties, two MCOs in each of the geographic managed care (GMC) model counties, and two MCOs in each of the Regional model counties. This procurement is the largest released by California, rebidding contracts for commercial plans statewide.
California currently has six Medi-Cal managed care plan models that serve 12 million beneficiaries in 58 counties. This RFP will help select commercial (private-sector operated) plans for the Two-Plan, GMC, and Regional Models.
- Two-Plan: In a Two-Plan model county, there is a county sponsored plan called the Local Initiative and a commercial plan. This RFP will only procure the commercial plans.
- GMC: In a GMC model county, DHCS contracts with multiple commercial plans.
- Regional: Regional model counties are rural counties that have not elected to participate as a County Operated Health Systems (COHS) model or as the Local Initiative of a Two-Plan model. In the Regional model, there are two commercial plans for each county.
The remaining 37 counties, including Imperial and San Benito Counties, will be served by the COHS Plans or the new Single-Plan model. As of January 1, 2024, the Imperial and San Benito managed care models will no longer exist.
- COHS: In a COHS model county, there is one the Medi-Cal managed care health plan that is run by the county. There is no competitive procurement process. Plans negotiate a contract with the county Board of Supervisors.
- Imperial and San Benito: These two models serve the Imperial and San Benito rural counties. In Imperial, there are two commercial plans that serve one or more counties. In San Benito there is one commercial plan; beneficiaries have the option of the commercial plan or to be fee-for-service Medi-Cal. These two models will no longer exist once the newly procured contracts go into effect.
- Single-Plan: In a single-plan model county, DHCS will contract with one commercial plan operated through the Local County Health Authority. The Authority must create a commission that will serve as the oversight entity for the delivery of Medi-Cal managed care services in that county. The commission contract may be on a non-bid basis. This model will begin January 1, 2024.
The following is a chart summing up the county transitions:
Prior to issuing this RFP, in February 2022, California awarded Kaiser Permanente a five-year, statewide Medi-Cal managed care contract. The no-bid agreement, pending legislative approval, would allow Kaiser to continue serving its existing Medi-Cal members while expanding its reach in the state. Kaiser currently serves about 900,000 Medi-Cal members and has direct contracts with DHCS in the two GMC counties. With the new contract, Kaiser will also contract directly with DHCS to serve its Medi-Cal members outside of the GMC counties rather than subcontracting with the other Medi-Cal managed care plans in the non-GMC counties.
MCOs will offer integrated health care that includes medical, dental, mental health, substance use treatment services and long-term care to Medi-Cal beneficiaries. Additionally, MCOs will need to commit to a range of new requirements that advance health equity and improve population health. Priorities include the delivery of high-quality, culturally competent care and access to providers, and coordination of care across settings and at all levels. All MCOs will also be expected to engage and coordinate with local community partners, invest resources into the community, and make public their performance and health equity activities.
MCOs must submit a proposal for each county they wish to serve. DHCS will make separate awards for each county. If an MCO was awarded a contract for fewer counties than the number for which they have submitted proposals, the MCO must agree to contract with DHCS for the counties where they are selected. Multiple subsidiaries under the same parent organization cannot submit for the same county. If multiple subsidiaries of the same parent organization apply in the same county, DHCS will reject the parent organization for all the proposals submitted in that county.
A voluntary non-binding letter of intent is due March 2 and proposals are due by April 11. The notices of intent to award will be posted on August 9, with the tentative contract awards to be posted on August 22. Contracts are for five years and run from January 1, 2024, through December 31, 2028. DHCS may extend the contracts but does not assure that an extension will occur.
DHCS will calculate final scores per county. Points in the proposal will be multiplied by a weight factor for each section as shown below.