The Department of Health Care Services has release a much more detailed explanation of its logic for pursuing a new contract with Kaiser. As the introduction to the document states, “The Department of Health Care Services (DHCS) proposes to enter into a direct contract with Kaiser Permanente (Kaiser) as a Medi-Cal managed care plan within certain geographic regions of the State, effective January 1, 2024 for a five year contract term, with potential contract extensions. Under the new contract, subject to federal approvals, Kaiser would operate as a full-risk, full-scope MediCal managed care plan, consistent with other Medi-Cal managed care plans. Kaiser will no longer retain specific exceptions or alternative standards, as has been granted in the past (e.g., exemptions from the facility site review/medical record review process, timely access survey, covered benefits requirements, and alternative access standard). The only exception will be that Kaiser will not be open through the traditional Medi-Cal plan choice methods.

Due to Kaiser’s distinct integrated plan and provider model that relies on brick and mortar and medical group capacity, Kaiser has historically not been subject to the traditional Medi-Cal plan choice methods, including where DHCS has a direct contract with Kaiser today (in five counties) and where Kaiser is a subcontractor under another health plan (prime plan). At the direct contract and subcontract level, Kaiser enrollment historically has only been based on continuity (i.e., persons leaving employer-sponsored Kaiser coverage and other payer-sponsored Kaiser coverage) and family linkage. In this proposal DHCS is looking to expand Kaiser’s Medi-Cal enrollment from 22 counties to 32 counties and to increase the number and types of Medi-Cal beneficiaries (beyond continuity and family linkage) it is responsible for.

Kaiser has committed to growth of new Medi-Cal members of 25 percent from the start of the contract term to the end of the contract term (five years) through continuity of members who exit their other lines of business, where Kaiser has a commercial presence but not currently enrolling Medi-Cal beneficiaries; dual eligibles (those eligible for both Medicare and Medi-Cal); and open choice enrollment for foster youth. This growth would apply in the 22 counties i where Kaiser currently participates as Medi-Cal managed care plan and the 10 counties ii where Kaiser has another line of business but would open to Medi-Cal enrollment come January 1, 2024.”

The document goes on to state that, “Kaiser is the highest or among the highest for Quality Scores for: Follow-Up Care for Children Prescribed ADHD Medication, Metabolic Monitoring for Children and Adolescents on Antipsychotics, and Antidepressant Medication Management – Acute Phase.”

It is increasingly clear that part of the Administration’s thinking on this relates to what they believe will be Kaiser’s ability to more fully, easily, and rapidly integrate CalAIM and elements of California’s 1115 Waiver into its day to day operations. As the State says, “CalAIM’s bold transformation aligns all elements of Medi-Cal into a system that is standardized, simplified, and focused on helping enrollees live healthier lives. Success requires the investment and sustained commitment of a broad network of health partners, including plans, providers, and community-based organizations, with incentives to achieve high quality of service. When CalAIM is fully implemented, Medi-Cal will better serve and benefit enrollees because it will be a seamless and streamlined health care system.”

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