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

Health Management Associates
Athena Chapman
Chapman Consulting


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 low-income children and their parents, pregnant women, seniors, and nonelderly adults, including people with disabilities. For low-income seniors, 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.

This fact sheet is part of the Medi-Cal Explained series.