Paying Medi-Cal Managed Care Plans for Value

Many states are establishing performance expectations for their Medicaid managed care plans (MCPs) and adopting financial incentives tied to quality of care and other measures of performance. California is not one of them, despite an abundance of poor MCP scores on many measures of quality and consumer experience.

Moreover, when Medi-Cal MCPs are able to reduce the cost of care, the state reduces their capitation rate — a phenomenon known as “premium slide” — even if they have improved quality of care and made health-related investments to address social determinants affecting individuals and communities. Intended Consequences, a 2018 report from the California Health Care Foundation recommended a financial incentive program that would address premium slide in Medi-Cal managed care. The report did not, however, recommend which specific performance measures should be used and how they should be used.

This report picks up where Intended Consequences left off. Specifically, it recommends a measure set and performance evaluation methodology to encourage improvement in the quality of care provided to Medi-Cal beneficiaries by MCPs.