Thursday, May 4, 2017
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, Medi-Cal is a key source of health coverage in the state and the main source of coverage for low-income children, adults, and people with disabilities. It also provides wrap-around coverage for many elderly Medicare beneficiaries in the state.
For several decades, Medi-Cal has been transitioning away from a fee-for-service (FFS) payment and delivery system to one that relies on risk-based managed care. Under the FFS system, beneficiaries could see any provider who accepted Medi-Cal, and providers were reimbursed for each individual service or visit. Under managed care, the state contracts with health plans to deliver Medi-Cal benefits to enrollees in exchange for a monthly premium, or “capitation” payment for each enrollee. The plans are accountable for and at financial risk for providing the services in the contract.
