California's Medicaid program, Medi-Cal, is the largest state Medicaid program in the nation, insuring almost one-third of California's more than 38 million residents. In the early 1970s, California was the first state to enter into risk contracts with managed care plans to serve some Medicaid beneficiaries, rather than pay for services on a fee-for-service (FFS) basis. Over the decades since that time, Medi-Cal has been progressively moving more beneficiaries into managed care. More than three-quarters of all Medi-Cal beneficiaries, including low-income children, adults, seniors, and people with disabilities, are now enrolled in managed care plans. Besides being the earliest Medicaid managed care program and, by far, the largest in the nation, at nearly 10 million enrollees, the Medi-Cal managed care program has a unique structure, an outgrowth of underlying historical differences in the health care systems and traditions in different counties of the state. As other state Medicaid programs increase their use of risk-based managed care, and policymakers, plans and providers, and advocates seek to understand and learn from developments in this area to guide future change, a review of Medi-Cal's managed care evolution is both timely and illustrative. It also serves to illuminate some potential implications of the proposed rule on Medicaid managed care issued by the federal Centers for Medicare & Medicaid Services (CMS) and expected to be finalized in the Spring of 2016, which represents a major overhaul of current regulatory requirements and standards.
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