California awards managed care contracts to Molina, Elevance Health and others for 2024

California has awarded managed care plan contracts to five insurers to serve Medicaid beneficiaries across 21 counties in the state in 2024. 

The state’s Department of Health Care Services announced on Dec. 30 the contracts given out to Molina Healthcare, Blue Cross of California Partnership Plan, Blue Shield of California, Community Health Group Foundation and Health Net Community Solutions. The contracts include new requirements for health equity and transparency.

“We are committed to improving the healthcare delivery and experience for Medi-Cal members by setting a new standard for what person-centered and equity-focused care looks like in the Golden State,” the department said in a statement. 

The state’s Medicaid program, called Medi-Cal, expanded by two the number of insurers that will get managed care contracts compared with an announcement in August. 

Molina said in a statement that the premium value for its managed care contract is expected to balloon from nearly $2 billion to approximately $3.9 billion for 2024. That is slightly down from the $5.5 billion estimated in the August 2022 announcement. 

The state will hold the plans to new standards surrounding equity and improvements to primary care.

Medi-Cal is introducing new requirements for transparency. Each plan must routinely report on access, quality improvement and health equity activities in a bid to ensure that “members will have easy access to information that can guide them in choosing the best plan.” 

The plans must review utilization reports to identify any members that aren’t accessing primary care.

“If members are underutilizing primary care, they may not be obtaining appropriate screenings, preventive care, or managing their conditions to prevent exacerbation,” according to a release on the plan contracts.

Plans must also spend a percentage of their total expenditures on primary care investments. All affected plans must allocate 5% to 7.5% of their profits into local community activities. They have to release a plan that details how the community can benefit from the investments and any related outcomes. 

The requirements come as the Biden administration has pressed to install equity requirements across government programs such as Medicare and Medicaid. 

The Centers for Medicare & Medicaid Services (CMS) released new guidance Wednesday to states to enable them to offer alternative benefits that address social determinants of health including transportation and food. States can adopt such benefits in lieu of other services, but still must meet key guardrails to ensure the benefits are “cost effective” and “medically appropriate,” according to a release from CMS.