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California Releases Medicaid Delivery System Waiver Proposal

This week, our In Focus section reviews the California Advancing and Innovating Medi-Cal (CalAIM) proposal, issued by the California Department of Health Care Services (DHCS) on October 28, 2019. CalAIM would implement broad delivery system, program, and payment reform for the state’s Medicaid program. The proposal includes efforts to address social determinants of health and other policy priorities such as homelessness, lack of access to behavioral health care, children with complex medical conditions, justice-involved populations, and aging individuals. According to DHCS, the three key goals of the proposal are to:

  1. Identify and manage member risk and need through whole person care approaches and address social determinants of health;
  2. Move Medi-Cal to a more consistent and seamless system by reducing complexity and increasing flexibility; and
  3. Improve quality outcomes and drive delivery system transformation through value-based initiatives, modernization of systems and payment reform.

Under the proposal, Medi-Cal managed care, Whole Person Care pilots, and the Health Homes Program will be transitioned to new 1915(b) waivers. The state will also transition to mandatory enrollment of individuals who are dually eligible for Medicaid and Medicare into Medi-Cal managed care organizations (MCOs). MCOs will be required to operate Dual Eligible Special Needs Plans (DSNPs) in all service areas.

Identifying and Managing Member Risk and Need through Whole Person Care Approaches and Addressing Social Determinants of Health

CalAIM includes reforms to better identify and manage member risk through whole person care approaches. To achieve this, DHCS would implement a population health management program requiring plans to focus on preventative and wellness services, assess member risks and needs, manage member outcomes through care coordination, and mitigate social determinants of health and health disparities. A statewide enhanced care management benefit would build on the current Health Homes Program and Whole Person Care pilots and transition those pilots to this new benefit to address clinical and non-clinical needs of high-need beneficiaries. DHCS is also proposing flexible wrap-around services that an MCO would integrate into its population health strategy. These voluntary services try to prevent hospital or skilled nursing facility admissions. Along with enhanced care management, these services would allow for integration opportunities, including an incentive for building an integrated, managed long-term services and supports (MLTSS) managed care program by 2026.

Under the CalAIM proposal, California will also begin developing a request for proposals (RFP) for Full Integration Plans, which would provide physical health, behavioral health, and oral health. Medi-Cal managed care, mental health managed care, substance use disorder managed care, and dental would all be consolidated under one contract. An RFP is expected sometime between January through July 2022. Awards would be announced July 2022 with implementation beginning January 2024.

By January 2022, DHCS proposes to mandate the county inmate prerelease Medi-Cal application process to ensure inmates receive timely access to Medi-Cal services upon release from incarceration. The state may also pursue an Institutions for Mental Disease (IMD) expenditure waiver.

DHCS will also consider developing a different model of care for children and youth in foster care. In 2020, the state would hold workshops for interested stakeholders, including: the Department of Social Services; the Department of Education; child welfare county representatives and state level associations; Medi-Cal managed care plans; behavioral health managed care plans; juvenile justice and probation; foster care consumer advocates; regional centers; and judicial entities.

Moving Medi-Cal to a More Consistent and Seamless System by Reducing Complexity and Increasing Flexibility

To reduce complexity and increase flexibility, DHCS is proposing a number of reforms pertaining to managed care, behavioral health, dental, and county-based services. Once such reform would be to standardize the managed care plan benefits, so that all MCOs provide the same benefit package. To eliminate enrollment practices that vary by geographical location and population, by January 2021 non-dual eligible Medi-Cal beneficiaries, and by January 2023 dual beneficiaries, would be required to be enrolled mandatorily in an MCO.

By the end of 2022, the state plans to discontinue the Cal MediConnect pilot program and transition dual eligibles from the Coordinated Care Initiative into Medi-Cal plans. By 2026, California hopes to implement MLTSS statewide in Medi-Cal plans.

By 2022, CHCS would implement an annual health plan open enrollment process. Beneficiaries would only be able to switch plans during this time, beginning November 2021.

Medi-Cal plans would also be required to be accredited by the National Committee for Quality Assurance (NCQA) by 2025.

DHCS is also proposing the administrative integration of specialty mental health and substance use disorder services into one behavioral health managed care program.


Key activities are included in the table below. For a comprehensive timeline of all activity, please see the proposal.

DateImplementation Activity

November 2019 – February 2020

Stakeholder engagement process

December 31, 2020

Medi-Cal 2020 1115 waiver expires

January 1, 2021

Managed Care Authority: Shifts to 1915(b) authority

Implementation of the following CalAIM proposals:

·  Population health management

·  Enhanced care management/In lieu of services

·  Shared savings and incentive payments

·  PRIME transitions to Quality Improvement Program

·  Dental benefits and pay for performance

·  Managed care benefit standardization

·  Non-dual managed care enrollment standardization

·  Long-term care integration

·  Regional rates Phase I

·  Behavioral health payment reform (at the earliest for HCPCS Level I code implementation)

·  Substance use disorder managed care renewal and policy improvements

·  Changes to behavioral health medical necessity

Behavioral Health Administrative Integration

Begin technical assistance of the County Inmate Pre-Release Application Process

Begin building managed care contract and RFP

Begin assessing County Performance Standards

Policy work for Long-Term Plan for Foster Care based on workgroup recommendations

November 2021

Medi-Cal managed care plan open enrollment begins

January 1, 2022

County Inmate Pre-Release Application Process Implementation

Enrollment into Medi-Cal plans selected during first open enrollment period. Implement an Annual Health Plan Open Enrollment process for all managed care plan enrollees.

January – July 2022

Full Integration Plans RFP

July 2022

Full Integration Plans Awards

December 31, 2022

Cal MediConnect program ends

January 2023

Require statewide mandatory enrollment of dual eligibles in a Medi-Cal managed care plan

All Medi-Cal health plans required to operate Dual Eligible Special Needs plans in all service areas for which they operate as an Medi-Cal managed care plan

January 2024

Full Integration Plan Implementation

January 2025

All Medi-Cal managed care plans required to be NCQA accredited

January 2026

Managed Long-Term Services and Supports, Long-Term Care, Dual Eligible Special Needs Plans Implementation

Submit for a single, integrated behavioral health managed care plan in each county or region responsible for providing, or arranging for the provision of, specialty mental health and substance use disorder services under the 1915(b) waiver

Source: California Department of Health Care Services

Link to California Advancing and Innovating Medi-Cal (CalAIM) Proposal