Medicaid programs across the country have adopted managed care delivery systems as a means of improving access and stabilizing the cost of service to beneficiaries. Health plans agreeing to participate in managed care programs are paid a capitation rate by the state to cover all costs of a defined population group. Capitation rates are calculated based on methods that are determined by the federal government. Federal funds cover 50 to 76% of the costs of Medicaid programs and states must comply with federal guidelines to obtain federal financial participation. In California more than half of Medi-Cal costs are paid by these funds.
Medi-Cal operates several forms of managed care programs, most of which are paid through capitated systems. The state develops capitation rates for managed care plans based on methods that have been approved by the federal government and comply with generally accepted standards. Specifically, historical fee-for-service data are used to estimate the equivalent cost under fee for service, and appropriate adjustments are then applied to project costs for the contract period.
This report was prepared in 1999 and therefore reflects the capitated marketplace of the late 1990s. The information in the report includes:
- A description of Medi-Cal managed care;
- Rate-setting methods permitted by the federal government;
- Medi-Cal’s rate-setting method;
- A comparison of Medi-Cal rate-setting versus other states; and
- A comparison of Medi-Cal fee for service and managed care payment levels to those of other payers.
This is historical data that will give readers insight into the Medi-Cal managed care program and fees paid to providers. It also compares these payment rates nationally.
The full report can be found under Document Downloads below.