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California Releases Statewide Medicaid Managed Care Procurement For 21 Counties

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By OPEN MINDS Circle

On February 9, 2022, the California Department of Health Care Services (DHCS) released a statewide request for proposal (RFP 20-10029) for 21 counties for its Medi-Cal (California’s Medicaid program) managed care organization (MCO) plan contracts. Previously, each county had its own procurement process. The goal of a statewide procurement is to standardize plan features and accountability across the counties. Proposals are due by April 11, 2022. Awards are anticipated during August 2022. The selected MCOs will go through a readiness review period from October 2022 through December 31, 2023. The plans will go live on January 1, 2024, and run through December 31, 2028.

The procurement affects three million of the state’s over 11 million Medicaid beneficiaries as of January 31, 2022. The terms of the new contracts will be also applied to Medi-Cal MCO plans in the 37 counties not included in this procurement. A key focus in the new contracts is advancing health equity and improving population health. All MCO plans will be expected to engage and coordinate with local community partners, invest resources into the community, and make public their performance and health equity activities. The MCO plans and their subcontracted health plans will be required to achieve the new Health Equity Accreditation from the National Committee for Quality Assurance (NCQA). This new NCQA program is focused on advancing the delivery of more equitable and culturally and linguistically appropriate services across member populations. The RFP noted two key requirements for bidders:

  • The MCOs bidding on the contract must have at least five consecutive years experience within the past seven years administering and operating a comprehensive health program for Medicare, Medicaid, or another health insuring or paying organization. This requirement applies to the prime contractor, and cannot be met by the experience of subcontractors.
  • For each county/service area a bidder submits a proposal, the bidder must also submit proof that it offers Medicare Advantage special needs plan for dual eligibles (D-SNP) in the same county/service area or receive approval from the Centers for Medicare & Medicaid Services to operate a D-SNP. In the current counties for the Coordinated Care Initiative (Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, and Santa Clara), CMS approval for a D-SNP must be effective as of January 1, 2023. For other counties, the bidder’s D-SNP must receive CMS approval for a January 1, 2026, effective date.

The RFP did not estimate the value of the procurement, and does not provide the rates. In May 2021, the California Health Care Foundation estimated that if the managed care models remained as they are currently, that 36 counties would be involved in the procurement. Enrollment in the nine commercial plans serving those counties was 3.4 million and total payment to those health plans totaled more than $13 billion. The selected plans will be paid a per member per month payment. The capitated rate will be based on quality and health equity outcome measures. The MCOs will be held accountable for exceeding the minimum performance level (MPL) for a group of pediatric and maternal-specific metrics. Plans and subcontractors will be expected to meet an MPL set at the 50th percentile and will face financial penalties if the target is not met.

In the 21 counties included in the procurement, DHCS intends to contract with one or two commercial Medicaid MCOs per county depending on the structure of the county’s Medicaid plan model. As of January 1, 2024, 21 counties will use the following plan models:

  • Two-Plan Model: 14 counties: Alpine, El Dorado, Fresno, Kern, Kings, Los Angeles, Madera, Riverside, San Bernardino, Santa Clara, San Francisco, San Joaquin, Stanislaus, and Tulare counties. In these counties, DHCS intends to make one award for a commercial Medicaid MCO plan for each county. The county-sponsored plan will continue to exist.
  • GMC: Sacramento and San Diego counties. In these counties, DHCS intends to make two awards for commercial Medicaid MCO plans for each county.
  • Regional: Amador, Calaveras, Inyo, Mono, and Tuolumne counties. In these counties, DHCS intends to make two awards for commercial Medicaid MCO plans for each county.

In their bids, proposers must submit utilization reporting rates for visits in four categories for all lines of business for measurement years 2017 through 2019. This reporting must be stratified by race/ethnicity and age in all states that the health plan operates in, including any reporting for Medicare, Medicaid, or the federal health insurance exchange. The reporting covers the following categories:

  • Adult access to preventive and ambulatory health services: To be reported as the percentage of members age 20 and older who had an ambulatory or preventive care visit during the measurement year for ambulatory visits, telephone visits, or online assessments. It also includes the rate of primary care visits per 1,000 members, and the percentage of adults who did not have a primary care visit during the measurement year.
  • Adult access to behavioral health services: To be reported as the number of adult visits for non-specialty mental health services per 1,000 member months in the measurement year, and the number of visits for addiction treatment per 1,000 member months during the measurement year.
  • Emergency department utilization: To be reported as the number of emergency department visits during the measurement year. Each visit counts one time regardless of the intensity or duration of the visit. Multiple emergency department visits on the same date of service will be reported as a single visit.
  • Pediatric services will be reported for primary care visits and for behavioral health visits by members under age 21. Primary care visits will be reported as visits per 1,000 members in the measurement year, and the percentage of members under age 21 who did not see a primary care professional during the measurement year. Behavioral health access will be reported as the number of visits for non-specialty mental health services per 1,000 member months, and the number of visits for addiction treatment per 1,000 member months

The RFP will not be used to procure Medicaid MCOs for the nine million beneficiaries living in the 37 counties that will use the following Medicaid plan models: the County Organized Health Systems (COHS) model and the new Single Plan Model. In these counties the new contract terms will apply to the county-operated managed care plan. As of January 1, 2024, the COHS and Single Plan Models will be used in the following 37 counties.

  • COHS: 34 counties: Butte, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen, Marin, Mariposa, Mendocino, Merced, Modoc, Monterey, Napa, Nevada, Orange, Placer, Plumas, San Benito, San Luis Obispo, San Mateo, Santa Barbara, Santa Cruz, Shasta, Sierra, Siskiyou, Solano, Sonoma, Sutter, Tehama, Trinity, Ventura, Yolo, and Yuba counties. In these counties, the county operates a Medicaid managed care plan. There is no competitive procurement process. The plans negotiate their contracts with the county Board of Supervisors.
  • Single Plan Model: Alameda, Contra Costa, and Imperial counties. DHCS will contract with one commercial plan operated through the local county health authority. The local authority will create a commission, possibly on a non-bid basis, that will oversee delivery of Medicaid managed care services for the county.

Additionally, DHCS has proposed a direct Medicaid managed care contract with Kaiser Permanente in the 32 counties where it has current operations. In the 22 counties where Kaiser currently serves Medicaid beneficiaries, the contract will permit Kaiser to continue to serve them. In the 10 counties where Kaiser has other lines of business, but no Medicaid contracts or subcontracts, it will create a Medicaid plan to serve Kaiser members who become eligible for Medicaid due to income or disability. In these 32 counties, Kaiser will not enroll new beneficiaries who are not already Kaiser members, and its member beneficiaries will be permitted to switch to other Medicaid managed care plans serving their region.

Kaiser currently serves about 900,000 Medicaid beneficiaries in the 22 counties through direct contracts with DHCS or subcontracts with locally operated Medicaid managed care plans.

  • Two direct GMC capitated contracts with DHCS that cover Sacramento, San Diego, Amador, El Dorado, and Placer counties. It subcontracts with a Medicaid managed care plan in 17 counties.
  • Capitated subcontracts in nine Two-Plan Model counties with Alameda Alliance, Contra Costa Health Plan, Kern Family Health, LA Care, Inland Empire Health Plan, San Francisco Health Plan, Health Plan of San Joaquin, and Santa Clara Family Health Plan.
  • Capitated subcontracts with four COHS health plans that serve Medicaid beneficiaries in eight counties. These health plans are Partnership Health Plan of California, CalOptima, Health Plan of San Mateo, and Gold Coast Health Plan.

Kaiser will offer Medicaid managed care enrollment in the 10 counties where it has other lines of business and does not participate as a Medicaid managed care plan. These counties are: Fresno, Imperial, Kings, Madera, Mariposa, Santa Cruz, Stanislaus, Sutter, Tulare, and Yuba.

For more information, contact: Contracts Division, California Department of Health Care Services, 1501 Capitol Avenue, MS Code 4200, Post Office Box 997413, Sacramento, California 95899-7413; 916-552-8006; Email: CDRFP8@dhcs.ca.gov; Website: https://www.dhcs.ca.gov/provgovpart/rfa_rfp/Pages/CSBmcodmcpHOME.aspx