SEPTEMBER 2021 Issue Brief Organizations React to Medi-Cal Managed Care Procurement Request for Proposals T he California Department of Health Care Services transparency and accountability by identifying and shar- (DHCS) administers Medi-Cal, the largest Medicaid ing common themes. program in the country.1 The state's Medi-Cal pro- gram provides coverage to almost 14 million Californians CHCF received 19 responses to DHCS's request for com- statewide, including children, adults, families, seniors, ments, 15 of which are posted on CHCF's website.4 The and people with disabilities.2 Over 11.6 million of these number of individuals and organizations represented in Medi-Cal enrollees get their health care through a the responses ranged from a single individual to a col- Medi-Cal managed care plan (MCP).3 Of these, approxi- lection of over 400 organizations.5 CHCF contracted with mately 70% identify as people of color, including Latinx, Bailit Health to analyze these responses and present a Black, Asian, and American Indian and Alaskan Native summary of key recommendations and themes. individuals. This brief presents Bailit Health's analysis, consisting of an In 2021, DHCS will spend over $50 billion paying MCPs to overview of the MCP procurement timeline, a description provide Medi-Cal enrollees with a comprehensive set of of the study methodology, the results of Bailit Health's health care services, including behavioral health services analysis of the comments shared with CHCF, and a short to those with mild to moderate mental illness. Of the 24 conclusion. MCPs contracting with DHCS, 16 are locally sponsored plans (10 local initiative plans and 6 County Organized In brief, Bailit Health identified three key recommenda- Health System plans). The remaining MCPs are a mix of tions for DHCS: for-profit and nonprofit commercial plans operating in 22 of the 58 California counties. 1.Release a complete and clear set of procure- ment documents for review and comment. Many On June 1, 2021, DHCS released its Medi-Cal MCP draft respondents expressed their disappointment that request for proposals (RFP 20-10029), formally launch- the draft RFP released for comment was incomplete ing the first-ever statewide competitive procurement and lacked clarity and wanted DHCS to release a full process for commercial MCPs. This procurement is a set of procurement documents for public review and unique opportunity for DHCS to significantly revise and comment prior to the issue of the final RFP. modernize the MCP contract and to critically assess the expertise and capabilities of prospective plans on behalf 2.Strengthen the MCP requirements related to of a diverse Medi-Cal population. improving access, quality, and equity. Many respon- dents asked that the MCP contract requirements be DHCS provided a 30-day public comment period for the strengthened, clarified, and expanded, particularly draft RFP. At the same time, the California Health Care those relating to improving access to quality care, Foundation (CHCF) invited anyone submitting com- reducing racial and other disparities, and improving ments to DHCS to also share their comments with CHCF. health equity for various groups and populations. CHCF's goals were threefold: to listen to and learn from the feedback provided to DHCS, to make the feedback 3.Ensure adequate and fair payment policies while widely available by posting it online, and to foster greater fostering local partnerships. Respondents remarked that the MCP rates should reflect and require ade- quate payment at the county and provider level, Medi-Cal Managed Care Procurement commensurate with the expanded MCP requirements Process and Timeline and expectations. Some respondents also encour- DHCS's objective for the MCP procurement is "to aged DHCS to require successful bidders to partner procure commercial plans to provide high-quality, acces- with local providers, counties, and community-based sible, and cost-effective health care through established organizations (CBOs) in a meaningful way to sup- networks of organized systems of care that emphasize port, achieve, and sustain the goals set by DHCS and primary and preventive care." DHCS sees this procure- stakeholders for this procurement and for Medi-Cal ment as an important step for achieving its vision "to managed care overall. preserve and improve the overall health and well- being of all Californians, and particularly, to address the Woven throughout these three overarching recommen- needs of populations experiencing disparities in health dations are two cross-cutting messages DHCS received outcomes." from commenters approaching the draft RFP through the lens of certain populations and services. A few groups of organizations specifically recommended that one "We want to acknowledge DHCS for . . . or more of the recommendations be applied specifi- signaling a commitment to health equity. . . . " cally to (1) invest in care for children across services and providers, including in schools; or (2) support access to - California Coalition for Youth high-quality maternal and child health and behavioral health (BH) services. Table 1 provides a high-level timeline from June 2021, the release of the draft RFP, to January 2024, the antici- By 2024, DHCS intends to expand the Medi-Cal reforms pated date that the new MCP contracts with commercial established during this procurement beyond just com- plans become operational. Entities interested in being mercial plans by executing new, consistent MCP contracts selected as an MCP for the Two-Plan Model, Geographic statewide across all types of Medi-Cal managed care Managed Care Model, Regional Model, Imperial Model, models. The revamping of these MCP contracts is antici- or San Benito Model will be required to respond to the pated to result in one of the largest set of state contracts final RFP. ever procured or negotiated at one time for any purpose. This is a rare opportunity to improve care for Medi-Cal Table 1. DHCS Medi-Cal MCP Procurement Timeline MCP enrollees statewide and to ensure ready access to KEY EVENT DATE high-quality care. MCP draft RFP release Jun. 1, 2021 RFP comments due to DHCS Jul. 1, 2021 "These draft contracts represent a once MCP final RFP release Nov./Dec. 2021 in a childhood opportunity for DHCS to Proposals due from commercial plans Early 2022 prioritize kids." DHCS notice of intent to contract Mid-2022 - Children's Movement of California MCP operational readiness Late 2022–late 2023 Implementation Jan. 2024 Source: Medi-Cal Managed Care Request for Proposal (RFP) Schedule by Model Type (PDF), DHCS, February 27, 2020. California Health Care Foundation www.chcf.org 2 The draft RFP posted for public review and comments important perspectives on DHCS's draft MCP procure- included information on the procurement process and ment documents. instructions on proposal development. DHCS also included some RFP attachments and a sample MCP CHCF received 19 responses. Of these responses, 8 sets contract. However, the draft RFP did not contain all of comments were from consumer advocacy groups, 8 the information that will be included in the final RFP. sets of comments were from provider organizations or For example, DHCS did not include narrative proposal associations, and 3 sets of comments were from health requirements, evaluation and scoring criteria, or informa- plans or associations. Although the 19 responses shared tion on MCP capitation rates. with CHCF represent just under half of the number received by DHCS directly, the responses shared with While many commenters have expressed disappointment CHCF represent a broad cross-section of organizations. at the lack of detail in some areas of the procurement documents, the absence of specific language is under- Bailit Health reviewed each set of comments, catego- standable, as there are still over two years until the new rized them using DHCS's goals, and identified common MCP contracts will be executed and operational. DHCS themes across the comments. Comments on the MCP has already indicated that the final RFP will include addi- draft RFP that did not fall into a theme but seemed tional MCP contract requirements with regard to the important to call out were also considered. Finally, Bailit following policy items: Health grouped the themes under three overarching recommendations. $ May 2021 budget revisions $ CaliforniaAdvancing and Innovating Medi-Cal's (Cal-AIM's) population health management, Findings Enhanced Care Management, and In Lieu of The comments shared with CHCF about the draft MCP Services procurement documents were thoughtful and varied and ranged from broad-view feedback to line-by-line edit- $ Health disparities and health equity ing suggestions to the draft RFP and model contract $ BH reforms, including but not limited to documents. Commenters pointed out items in the pro- No Wrong Door curement documents that they supported, items that their organizations felt were missing, and specific MCP $ School-based services, including but not limited requirements that commenters wanted strengthened. to preventive early intervention for BH services by school-affiliated health providers Bailit Health identified 11 themes from the feedback to DHCS and grouped these themes into three types of Prior and subsequent to the release of the final RFP, recommendations: DHCS can revise the MCP contract, as needed, to reflect changes in federal and state rules and policies. It is typi- $ Release a complete and clear set of procurement cal for state Medicaid agencies to modify the model documents for review and comment. contract as they deem necessary or appropriate prior to $ Strengthen the MCP requirements related to its execution, including but not limited to adding details, improving access, quality, and equity. attachments, and appendices. $ Ensure adequate and fair payment policies while fostering local partnerships. Methodology CHCF contracted with Bailit Health to review the RFP In addition, Bailit Health identified two cross-cutting mes- comments shared with CHCF to identify common sages for DHCS that came through in some comments themes. CHCF also asked Bailit Health to highlight when the RFP is viewed through the lens of improvements a few comments that appear to offer unique and focused on certain populations or services. Specifically, Organizations React to Medi-Cal Managed Care Procurement Request for Proposals www.chcf.org 3 some commenting organizations recommended that Commenting organizations consistently expressed inter- MCPs be required to (1) invest in care for children across est in stakeholders having the opportunity to review and services and providers, including in schools; or (2) sup- comment on a complete RFP document prior to DHCS's port access to high-quality maternal and child health and release of the final RFP. Some commenters expressed BH services. concerns that DHCS may make important additions or changes to the MCP final RFP that stakeholders will have A description follows of the themes that fall within each had no opportunity to review. Some commenters also of the three recommendations and their implications suggested that DHCS offer stakeholders the opportu- for the MCP procurement documents. In addition, the nity to review and comment on RFP evaluation questions quotes from commenters help provide some insight into prior to the RFP documents being finalized. how these cross-cutting perspectives align with the three recommendation themes. "For a more complete process, we respectfully RECOMMENDATION 1 request DHCS to solicit public feedback on . . . Release a complete and clear set of missing elements before the RFP is finalized procurement documents for review and comment. later this year." - California Association of Public Hospitals and Health Systems Theme 1: Release a complete set of MCP draft RFP documents for review and comment. Approximately half of the sets of comments shared with Some states do not share any information for public CHCF raised concerns over components of the managed comment in advance of a Medicaid managed care pro- care RFP that were not included in the draft RFP and curement. In addition, Medicaid agencies that release therefore were not part of the public review and comment draft RFPs often do not share a complete draft of all the process. For example, commenters noted information procurement documents for review and comment before missing from the RFP documents, such as CalAIM provi- issuing a final RFP. Given the length of time until the con- sions related to MCPs, additional equity requirements, tracts will be operational, draft procurement documents and schools and youth BH programs, including items often do not include all the items that will be in the final from the May 2021 budget revisions. version, such as specific rate information. A trade-off exists between DHCS obtaining input on "We are concerned that the draft RFP and every aspect of a procurement process and still meeting its stated procurement timeline. DHCS must balance the model contract as proposed do not reflect value of conducting another full round of public review the necessary accountability strategies to and comment with its desire to adhere to its 2021 pro- effectively change course on current poor curement timeline and execute the new MCP contracts statewide prior to January 2024, including conforming performance of Medi-Cal managed care plans changes to contracts with locally sponsored plans. as it relates to child health and does not Additional stakeholder recommendations on the MCP establish criteria and requirements for plans to model contract could be considered after DHCS posts demonstrate continued progress in narrowing the final RFP documents. The new MCP contracts will not be finalized and executed until 2023 in preparation for the equity gap." a January 2024 operational start date. After the RFP is - Coalition of Children's Groups posted, DHCS could solicit additional feedback on the MCP contracts within the constraints of the procurement process. An additional opportunity for public comment California Health Care Foundation www.chcf.org 4 may be able to occur without substantially affecting the "There is no mention of the new role schools proposed start date for MCP contracts, as long as the final MCP contract is completed in time for DHCS to initi- will play in partnership with MCOs and nothing ate and complete MCP readiness reviews for a January about contracting and who pays for what in 2024 start date. providing school-based mental health services Theme 2: Ensure that the model contract reflects the at the scale currently envisioned." full scope of MCP obligations. - Education stakeholders Commenters suggested that DHCS ensure that the MCP model contract released as part of the procurement process be expanded to reflect the full scope of MCP In its meeting with the Stakeholder Advisory Committee obligations. This is the first time the MCP contract has on July 30, DHCS indicated that it will (1) incorporate been overhauled in many years. Once implemented, the more detail about the Child and Youth Behavioral Health new MCP contracts may be the last opportunity for DHCS Initiative in the RFP, and (2) review whether comments to make significant contract changes for years to come. are best addressed through the RFP and MCP contract or Commenters specifically suggested that DHCS modify through other guidance documents, such as APLs. DHCS the model contract with the following recommendations: also stated that it is not planning on incorporating all the APL requirements and their level of detail into the MCP $ Incorporatepolicies from All Plan Letters (APLs) contract. into the MCP contract. $ Include in the RFP more detail on the recent Both DHCS and commenters have raised concerns about Child and Youth Behavioral Health Initiative. the scope of the MCP contract and the level of detail to be included in the contract in comparison to other com- $ Include DHCS's stated intent to require clinical munications between the state and MCPs, such as APLs. and claims data sharing participation from all Given the time-consuming process of amending 24 dif- MCPs and providers. ferent MCP contracts, DHCS has previously used APLs to $ Reference existing MCP requirements, including implement policy changes that are not currently rooted abortion care and compliance standards for in the MCP contract, including to implement time-sen- dental care. sitive changes in federal and state laws and regulations. However, it is challenging for MCPs, interested parties, $ Define what MCP audits will consist of and the and DHCS to understand the full scope of MCP obliga- anticipated scope of such work. tions not specifically referenced in the MCP contract. Incorporating more detail into the MCP contract and "Rather than clarifying or detailing existing relying less on APLs may make it easier for all parties to understand the full scope of MCP obligations and hold contractual requirements, APLs are MCPs accountable. If the MCP contracts and related increasingly becoming the vehicle for appendices grow too long, however, state and MCP staff will likely be less able to manage the contracts. communicating new MCP responsibilities. The MCP contract requires that plans comply There are other disadvantages to including more detail with future APLs, making this particularly in the MCP contracts. More detail in the contracts means fewer opportunities for DHCS and MCPs to innovate problematic. [Local Health Plans of California] and evolve within the bounds of the MCP contract. In recommends that new MCP obligations be addition, updating MCP requirements via a contract amendment rather than through an APL is more ardu- incorporated into the contract." ous and time consuming. For these reasons, it is not - Local Health Plans of California uncommon for example, for states to include general Organizations React to Medi-Cal Managed Care Procurement Request for Proposals www.chcf.org 5 MCP contract requirements related to the Healthcare RECOMMENDATION 2 Effectiveness Data and Information Set (HEDIS) and Strengthen the MCP requirements related to other performance measure tools within the contract improving access, quality, and equity. while maintaining separate technical specification docu- ments with annually updated details on how the MCPs Theme 4: Hold MCPs more accountable for per- must report required performance measures and how formance, and link their performance to financial specific benchmarks will be calculated. consequences. While the model contract released with the draft pro- Theme 3: Clarify the MCP requirements in the model curement documents includes provisions to hold MCPs contract. more accountable for performance, commenters encour- Health plan representatives and other commenters rec- aged DHCS to go further in defining MCP performance ommended that DHCS clarify several MCP contractual expectations and creating financial incentives for plans requirements across all aspects of health plan responsi- for improvement. The quality of care provided to Medi- bilities. For purposes of illustration, Bailit Health focused Cal managed care enrollees is, on average, below that on commenters' requests for more specifications on received by Medicaid enrollees in many other states. In MCP care coordination responsibilities, which resulted in addition, from 2009 to 2018, quality of care in Medi-Cal the following recommendations: managed care was stalled on over half of 41 performance measures.6 Among the 9 MCP quality measures currently $ Require MCPs to administer an individual risk in use for children, performance on 6 measures declined assessment to those identified as low risk to help or stayed the same during this same period. identify needed preventive services. $ Develop and implement strategies to improve Quality and access challenges are not unique to Medi- care coordination and increase rates of referral Cal or managed care, but the current and proposed completion and member engagement in MCP payment policies do not create meaningful financial specialty services. incentives for MCPs to improve. DHCS pays Medi-Cal MCPs based on per-member per-month capitation pay- $ Utilize effective care coordination performance ments. DHCS generally does not offer financial incentives measures reflective of Early and Periodic to MCPs based on improved performance and does not Screening, Diagnostic, and Treatment (EPSDT). put a portion of MCP capitation payments at risk based $ Require MCPs to include community health work- on individual plan performance. In 2019, DHCS adopted ers in care coordination or partner with CBOs. new rules that require MCPs to perform at least as well as half of the Medicaid managed care plans nationally (up Clarity in the MCP model contract is important to from 25%). However, MCPs not meeting this standard do ensure that bidders understand what they will be held not face significant financial penalties for noncompliance, accountable to within the MCP capitation rates and con- and plans performing above this level receive no financial tract. Clarity is also important to ensure equal benefits benefit. In contrast, at least 24 states with Medicaid man- and access for all beneficiaries, regardless of the MCP aged care programs use a capitation withhold approach in which they are enrolled. Finally, clear MCP contract as a significant quality incentive.7 Capitation withholds, requirements are needed for providers, subcontractors, typically in the range of 1% to 4% of the total health and plans to better understand their roles and responsi- plan premiums, are set aside as incentive payments for bilities under the contract. Medicaid plans whose performance meets or exceeds predefined state benchmarks or improvement targets.8 Plans can earn back some or all of the amount withheld, depending on their performance. California Health Care Foundation www.chcf.org 6 Commenters encouraged DHCS to define a clear, strong contract, but the final MCP contract should be explicit on link between MCP performance and financial incentives DHCS's authority, approach, and expectations for MCP in the final RFP documents. Commenters on the draft financial performance incentives. Ideally, the amount of RFP specifically recommended the following changes: the financial incentive earned by an MCP should increase as performance improves. In addition, DHCS should $ Payments to MCPs should be more explicitly tied use a combination of aligned financial and nonfinancial to performance. incentives to increase MCP motivation and accountability $ The final RFP must reflect the administration's for quality performance. Publicly sharing and reviewing stated intention to hold MCPs accountable to MCP performance on metrics within external stakeholder benchmark measures. The contract should clearly meetings can be as powerful a motivation for quality enable DHCS to impose financial withholds for improvement as offering direct financial incentives. The MCPs' failure to meet 50th percentile of perfor- new MCP contracts should give DHCS multiple levers to mance on specified metrics. incentivize improvement. $ MCPs must be required to continue to improve Theme 5: Enhance the requirements for MCPs to have quality, including improving performance relative adequate networks and timely access to care. to national Medicaid benchmarks and reduc- While DHCS has increased their oversight of MCP net- ing disparities in performance among Medi-Cal work adequacy in the past few years, commenters enrollees. noted an ongoing need to further enhance both the MCP requirements and DHCS's oversight of adequate "Amend the rate development process networks. Commenters specifically made the following suggestions to DHCS: to be a driver of quality improvement and $ Increase MCP accountability for assuring adequate impose financial withholds for failure to meet networks and timely access to care. a minimum performance level of the 50th $ Clarify the MCP responsibilities for maintaining percentiles for adults and children's preventive adequate networks and access to subacute facili- services." ties and other levels of step-down care. - A coalition of consumer advocates $ Require MCPs to demonstrate efforts to contract with existing providers before alternative network adequacy arrangements are approved. Adopting financial incentives for MCPs to improve quality is a best practice within Medicaid managed care programs. $ Ensure that MCPs have available and accessible As noted in more detail in a Bailit Health report written substance use disorder treatment programs with for CHCF earlier this year, Paying Medi-Cal Managed proportionate capacity specifically for youth in the Care Plans for Value: Design Recommendations for a service area. Quality Incentive Program, DHCS could combine an $ Define in the procurement documents a compre- MCP capitation withhold with an incentive payment for hensive MCP network for long-term services and plans whose performance meets or exceeds predefined support. DHCS expectations.9 The procurement documents should clearly authorize DHCS to define and determine $ Increase the MCP oversight and contract require- how MCPs could earn back some or all of the amount ments around functions delegated to providers withheld, depending on an individual plan's performance and other subcontracted entities. to specific metrics and benchmarks. Detailed techni- cal specifications could be shared outside of the MCP Organizations React to Medi-Cal Managed Care Procurement Request for Proposals www.chcf.org 7 $ Expand eligible providers to include nonclinical "MCPs should not receive approval for the same workers to be more reflective of members' racial/ alternative access requests year after year. ethnic, socioeconomic, cultural, and language Instead, MCPs should be required to specify backgrounds. the measures they are pursuing to actively $ Ensure that MCPs are aware of and complying with California's language access law. improve their networks and to contract with additional providers." Several comments related to DHCS's proposed require- ment for MCPs and network providers to achieve the - California Medical Association National Committee for Quality Assurance's (NCQA's) Distinction in Multicultural Care by 2026. While appre- Like most Medicaid programs, Medi-Cal is continuously ciating DHCS's intent, commenters noted that this working to improve access to services for its members. requirement may be overly burdensome for some pro- Maintaining network adequacy is an ongoing issue, in viders and may have a negative impact on network part due to the availability of specific provider types adequacy if providers are unable or unwilling to meet in areas across California and made more challenging these new network requirements. DHCS should carefully based on providers' willingness to participate in Medi- review these provider network concerns and the trade- Cal and accept Medi-Cal payment rates. Of all the adults offs of applying the NCQA distinction requirements enrolled in Medi-Cal, the percentage reporting difficulty below the health plan level. finding primary care increased slightly between 2013 and 2019, and the percentage reporting difficulty finding specialty care increased from 21% to 26%.10 "While I appreciate DHCS's vision and effort to standardize and ensure that plans A key role of DHCS and its contracted MCPs is to ensure adequate provider networks and timely access to quality achieve NCQA accreditation, I do not agree care for all enrollees. It is important that MCP network that all network providers require NCQA adequacy and accessibility requirements be clear and that DHCS, MCPs, and delegated entities continue to accreditation. This is an extreme duplication focus on network adequacy and accessibility to primary, of effort." preventive, and specialty care. - Health Center Partners Theme 6: Enhance the MCP requirements to provide Theme 7: Add contract requirements to hold MCPs culturally competent and linguistically appropriate more accountable for assessing disparities and improv- care. ing health equity. Organizations commenting on the draft RFP encouraged The current DHCS Comprehensive Quality Strategy DHCS to use this procurement to improve Medi-Cal identifies improving health equity as one of four key enrollees' access to culturally competent and linguisti- goals.11 DHCS's strategy in this area to date has largely cally appropriate care. For example, commenters urged focused on examining and sharing Medi-Cal managed DHCS to modify the MCP procurement with the follow- care data on health disparities and requiring MCPs to ing suggestions: engage in targeted performance improvement projects $ Add requirements for MCPs to actively recruit designed to reduce disparities in certain areas. Several and retain culturally and linguistically competent commenters supported the additional MCP requirements providers and staff. related to health equity and disparity in the proposed draft contract but encouraged DHCS to go further and be bolder, given the stark disparities made obvious during California Health Care Foundation www.chcf.org 8 the COVID-19 pandemic. Some commenters suggested Since the onset of COVID-19, Medicaid programs across that DHCS adjust the new MCP procurement with the the country have been making a more focused and following modifications: public effort to address disparities and improve equity in the health care system. The additions included in $ Define disparities more broadly to include age, DHCS's draft contract and commenters' additional sug- disability, sex, sexual orientation, and gender iden- gestions are similar to requirements being discussed in tity in addition to race, ethnicity, and language. many Medicaid programs. It is critical to move beyond $ Hold MCPs accountable for reducing BH dispari- measuring health disparities and start expecting to see ties and improving utilization rates among and improvements in reducing disparities. across populations. $ Include reimbursement for community health RECOMMENDATION 3 workers, expand access to dyadic care, and Ensure adequate and fair payment policies include a new doula care benefit to promote while fostering local partnerships. birth equity. Theme 8: Ensure appropriate funding for MCPs and $ Require MCPs to regularly report progress on fair, timely payment to providers. reducing child and maternal health disparities. Some commenters suggested that DHCS undertake a comprehensive financial review of the new MCP require- $ Require MCPs to set year-over-year targets for ments, discuss the impacts of those requirements with elimination of disparities for both physical and MCPs, and commit to factoring the new requirements into behavioral health. the MCP rate-setting process accordingly. Specifically, $ Raiseeven higher the MCP requirements and commenters also expressed the need for MCP rates to expectations to advance health equity for reflect and require adequate payment at the county and Medi-Cal enrollees. provider level, commensurate with the expanded MCP requirements and expectations. Comments related to payment rates for specific services include the following "The state should lay out a robust vision and set recommendations for DHCS: a north star for improving quality of care for $ Require MCPs to support comprehensive tele- kids, reducing health disparities for children health coverage and payment. and youth, and responsible fiscal stewardship $ Add a provision to address MCPs' obligations to pay for emergency transportation. of valuable health care dollars." $ Require MCPs to pay sufficient rates to providers - The Children's Movement that serve children. "We urge the state to use this RFP process to provide a vision and concrete targets for year- over-year quality improvement and disparities reduction tied to plan rates." - California Pan-Ethnic Health Network (CPEHN) Organizations React to Medi-Cal Managed Care Procurement Request for Proposals www.chcf.org 9 Theme 9: Require MCPs to support efforts to address "Local plans appreciate and support the social determinants of health (SDOH). priorities of DHCS, including its focus on Given evident health disparities among Medi-Cal prevention, health equity, quality, access, enrollees12 as well as relatively poor MCP performance compared to national quality benchmarks, it is not sur- oversight, and reporting. However, the draft prising that commenters called for DHCS to strengthen contract includes a multitude of new and MCPs' focus on health-related social needs. For exam- ple, commenters made these suggestions for the MCP significant requirements that will impact contract: plan operations and require new staffing $ Require stronger cultural competency training. and resources. If DHCS proceeds with $ Require publicly reported population needs. many of these proposed changes, plans will $ Require that MCPs capture SDOH data uniformly, need additional administrative resources to including collecting information in trauma- implement them." informed ways. - LHPC $ Require MCPs to ensure that providers who serve children complete adverse childhood experiences (ACEs) training and conduct ACEs screenings. "Payment and delivery system reform must $ Require MCPs to partner with providers that serve be done at both the plan and provider level. youth experiencing homelessness. DHCS will fall short of its goals if it is simply $ Require that MCPs fund street outreach, includ- ing providing licensed clinical staff who can delegating responsibilities to health plans provide immediate mental health, life skills, and without supporting payment and delivery social-emotional needs assessments that are both age-appropriate and culturally and linguistically reform at the provider level." appropriate. - California Association of Family Physicians The federal Medicaid managed care rule requires that "We recommend that DHCS implement uniform states set actuarially sound rates and pay adequate rates standards for the MCPs for representing data to plans to allow them to appropriately provide the ser- vices included within the MCP contracts. There are many related to social determinants of health, the new requirements included within this contract, and it is data be easily extracted, and the collection of essential that DHCS and its actuaries undertake a com- the data be incentivized through financial or prehensive process to ensure that the rates paid to MCPs are appropriate and allow MCPs the ability to make fair quality measures." payments to their providers. - California Medical Association Over the past several years, states have increasingly added requirements for MCPs to screen enrollees to identify potential social risk factors and connect enrollees with nonmedical services, programs, and community- based organizations that can assist them in addressing SDOH. California Health Care Foundation www.chcf.org 10 Theme 10: Require MCPs to have a local presence and Given the unique geographies and local community to engage and invest in the communities they serve. resources in California, health plans bidding on the While this upcoming MCP procurement will solicit bids MCP RFP that have strong community ties and support from commercial plans, a theme among commenters strategies in the counties they propose to serve may be included the need for MCPs to have a local presence more likely to gain trust and make progress in engag- and to engage and invest in the communities they serve. ing providers, community health workers, enrollees, and Commenters noted that for MCPs to effectively improve other stakeholders in a common effort to improve care care and health status for diverse populations of Medi-Cal and reduce disparities, particularly in considering the enrollees, plans need to partner with local and commu- role of SDOH and other nonmedical factors influencing nity-based organizations in a meaningful way. Specific the enrollees' ability to access quality care and improve recommendations related to aspects of local presence health status. and engagement include the following: Theme 11: Require MCPs to spend a minimum per- $ Require MCPs to establish and maintain partner- centage of revenue on primary care, prevention, ships with school districts and county offices. addressing SDOH, or other areas. $ Require MCPs to obtain county letters of support Several commenters suggested that DHCS direct MCPs as part of the MCP RFP process. to report on the percentage of Medi-Cal capitation pay- ments spent on specific types of services and create some $ Strengthen community engagement and repre- minimum expectations and incentives for MCPs to invest sentation of children and youth on MCP advisory in primary care, preventive care, and SDOH-related activ- committees. ities. For example, some commenters recommended that MCPs be required to report on their percentage of Some commenters also suggested that DHCS require total spending dedicated to support and incentivize pri- MCPs to make specific investments in the communities mary care. Other commenters suggested that MCPs be they serve: required to develop a plan to spend a minimum percent- $ RequireMCPs to develop a plan to spend a age of their MLR on preventive care, nonclinical services, minimum percentage of medical loss ratio (MLR) and coordination with CBOs. on nonclinical services and on coordination with CBOs. Many states have included similar minimum expecta- tions on MCPs, including the required implementation $ Require significant investments from MCPs in the of robust patient-centered medical home models and safety-net delivery system. spending on SDOH-related activities if an MLR is within $ Require MCPs to report on how they are support- a specific range. For these types of requirements to be ing providers' transition to advanced primary care effective, it is important that the MCP capitation rate models. appropriately allows for MCPs to make these investments and still meet other contractual requirements. $ Require MCPs to invest in community health to fix access and capacity issues and to support integra- tion efforts with BH. "DHCS should require that all applicants $ Require MCPs to contribute to a locally governed develop a plan to spend a minimum community wellness and equity fund. percentage of their minimum loss ratio (MLR) on nonclinical services and their coordination." - California Accountable Communities for Health Initiative Organizations React to Medi-Cal Managed Care Procurement Request for Proposals www.chcf.org 11 Conclusion DHCS has an unprecedented opportunity to consider DHCS's Medi-Cal MCP procurement represents a rare and act on stakeholder feedback prior to releasing the and powerful opportunity to leverage state purchasing final MCP procurement documents later in 2021 and power to raise expectations and hold MCPs accountable again when finalizing the version of the MCP contracts for increasing access to quality care and reducing racial that will be implemented on January 1, 2024. Through and other disparities in health and health care for 10 mil- this procurement and reform of MCP contracting require- lion Medi-Cal enrollees. In revamping all MCP contracts ments, DHCS has the chance to improve quality care and payment policies, DHCS has the chance to ensure for Medi-Cal members and make substantial progress that all individuals enrolled in Medi-Cal managed care toward eliminating racial and other disparities in care. have access to high-quality care, regardless of where they live, who they are, or in which MCP they are enrolled. A variety of commenters representing hundreds of orga- nizations provided thoughtful feedback on different issues to DHCS's procurement draft RFP. Collectively, the RFP comments shared with CHCF result in the emer- gence of three key recommendations for DHCS: 1.Release a complete and clear set of procurement documents for review and comment. 2.Strengthen the MCP requirements related to improving access, quality, and equity. 3.Ensure adequate and fair payment policies while fostering local partnerships. While commenters appreciated the ability to provide DHCS with feedback on the draft procurement, they also expressed concern that a significant amount of information was missing and asked DHCS to publicly share additional and revised RFP procurement materi- als before the final RFP is released. Commenters sharing their feedback with CHCF strongly support DHCS's vision "to preserve and improve the overall health and well- being of all Californians, and, particularly, to address the needs of populations experiencing disparities in health outcomes" and offered specific feedback on ways that the state could modify the procurement documents and processes to better achieve this vision. Commenters also noted that MCP, county, and other provider rates should be commensurate with the expanded MCP contract requirements and expectations to achieve the mean- ingful goals that DHCS has for this procurement and for Medi-Cal managed care overall. California Health Care Foundation www.chcf.org 12 Endnotes About the Authors 1.Margaret Tatar and Athena Chapman, Medi-Cal Explained: This paper was written by Mary Beth Dyer and Beth The Medi-Cal Program - An Overview, California Health Care Waldman, senior consultants at Bailit Health Purchasing. Foundation (CHCF), February 2019. Bailit Health is a health policy consulting firm dedicated 2."Medi-Cal Enrollment," California Department of Health Care to ensuring insurer and provider performance account- Services (DHCS), July 28, 2021. ability on behalf of public agencies. Medi-Cal Managed Care Enrollment Report, California Health 3. and Human Services Agency, August 12, 2021. About the Foundation 4.Four organizations that submitted comments to CHCF to be The California Health Care Foundation is dedicated to included in this analysis requested that their comments not be advancing meaningful, measurable improvements in the posted online. way the health care delivery system provides care to the 5."Organizations Share Their Comments to DHCS on Medi-Cal people of California, particularly those with low incomes Managed Care Procurement RFP," CHCF, July 1, 2021. and those whose needs are not well served by the status 6.Philip R. Lee, A Close Look at Medi-Cal Managed Care: quo. We work to ensure that people have access to the Statewide Quality Trends from the Last Decade, CHCF, September 25, 2019. care they need, when they need it, at a price they can afford. Changes to Eligibility Standards in All 50 States and DC: 7. FY 2019 and FY 2020 (PDF), KFF (Kaiser Family Foundation), October 2019, Table 1. CHCF informs policymakers and industry leaders, invests Raising the Bar: How California Can Use Purchasing Power and 8. in ideas and innovations, and connects with changemak- Oversight to Improve Quality in Medi-Cal Managed Care, CHCF, ers to create a more responsive, patient-centered health April 2019. care system. Paying Medi-Cal Managed Care Plans for Value: Design 9. Recommendations for a Quality Incentive Program, CHCF, January 28, 2021. 10.Medi-Cal Facts and Figures: Essential Source of Coverage for Millions, California Health Care Almanac, CHCF, August 2021. 11."DHCS Comprehensive Quality Strategy," DHCS, March 23, 2021. 12.2019 Health Disparities Report (PDF), DHCS, December 2020. Organizations React to Medi-Cal Managed Care Procurement Request for Proposals www.chcf.org 13