A new report prepared for the California Health Care Foundation reviews California’s Medicaid rate-setting process and offers recommendations for adjustments to that process to encourage health plan investments in health-related benefits and services that improve care and lower costs.
The Medi-Cal program plays a critical role in California, providing health coverage for a third of all residents. With 81% of Medi-Cal beneficiaries enrolled in managed care, Medi-Cal managed care organizations (MCOs) are central to achieving the state’s objectives of supporting innovative models of care that have the potential to both improve member health outcomes and reduce cost trends over the long term. While plans do make some investments that go above and beyond the required benefits, disincentives in the Medi-Cal MCO rate-setting process may actually discourage sustained investments that could help the state reach its goals of improving care and lowering costs.
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