Medi-Cal: subcontractors: rates.

Plain English Breakdown

The bill's full text is not provided in the given material, so some details may be incomplete or require further verification from additional sources.

Medi-Cal: Fair Rates for Subcontractors

This law requires Medi-Cal managed care plans that use subcontractors to pay them actuarially sound rates starting January 1, 2027.

What This Bill Does

• Requires the State Department of Health Care Services to set actuarially sound payment rates for Medi-Cal subcontractors starting January 1, 2027.
• Defines 'downstream fully or partially delegated subcontractor' and sets rules for their payments based on actuarial principles.
• Makes it illegal not to pay subcontractors according to actuarially sound rates.
• Allows subcontractors to file disputes with the department if they are paid unfairly.

Who It Names or Affects

• Medi-Cal managed care plans that use subcontractors
• Subcontractors working for Medi-Cal managed care plans

Terms To Know

actuarially sound rates

Rates based on careful financial analysis to ensure fairness and sustainability.

downstream fully or partially delegated subcontractor

A company that provides services for Medi-Cal managed care plans but is not directly contracted with the state.

Limits and Unknowns

• The bill does not specify what happens if a subcontractor dispute is unresolved.
• It's unclear how existing contracts will be affected by this new requirement.
• The bill only applies to Medi-Cal managed care plans and does not cover other health insurance programs.

Official Summary Text

AB 2327, as introduced, Lowenthal.
Medi-Cal: subcontractors: rates.
Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services under fee-for-service or managed care delivery systems. The Medi-Cal program is in part governed by, and funded pursuant to, federal Medicaid program provisions.
Existing law sets forth various provisions relating to the department determining capitation rates for Medi-Cal managed care plans using actuarial methods and a certain methodology that considers, among other factors, utilization and cost data.
This bill would require the department, for rates effective on or after January 1, 2027, to require that a Medi-Cal managed care plan operating as a downstream fully or partially delegated subcontractor, as
defined, be paid actuarially sound rates developed in accordance with generally accepted actuarial rate development principles and practices. Under the bill, failure to pay the subcontractor in a manner consistent with these provisions would be deemed a violation, constituting an unlawful and unfair business practice, as specified. The bill would afford the contractor the opportunity to enforce these requirements by filing a notice of dispute with the department.

Current Bill Text

Download Bill PDF