Medi-Cal Payment to Managed Care Plans: Current Process and Challenges

Medi-Cal Explained: Fact Sheet

Health Management Associates
Athena Chapman
Chapman Consulting


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Medi-Cal Explained

This publication is part of CHCF’s Medi-Cal Explained series. The series provides an overview of the program, including the people it serves, the services it provides, and how it is organized, managed, and financed.

Medi-Cal is the primary source of health insurance for more than 13 million people in California — a third of the state’s population. The program provides health coverage for children and their parents with low incomes, pregnant women, seniors, and nonelderly adults, including people with disabilities. For seniors with low incomes, Medi-Cal also covers services not paid for by Medicare, including nursing home care.

Over the past decade, the California Department of Health Care Services (DHCS) has been steadily moving Medi-Cal program beneficiaries into managed care and out of fee-for-service. As of 2018, DHCS had contracted with Medi-Cal managed care plans to deliver at least some covered benefits in all of California’s 58 counties, representing 82% of all Medi-Cal’s enrollees.

This fact sheet provides a high-level overview of Medi-Cal managed care, how it is contracted, how payment rates are set, and how changes to the Medi-Cal program might impact those rates. It also looks at what is ahead for managed care plans, including addressing costs and a move to value-based payment for care.