DHCS releases CalAIM proposal

California’s Department of Health Care Services (DHCS) released the California Advancing and Innovating Medi-Cal (CalAIM) initiative proposal on Monday.

The CalAIM initiative aims to implement broad program, delivery system, and payment reform for the Medi-Cal program. With California’s current 1115 and 1915(b) waivers set to expire in 2020, the initiative will serve as a framework for upcoming waiver renewals.


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The 181-page CalAIM plan includes proposals that look to address several of Calfornia’s complex health challenges including homelessness, behavioral health access, the clinical needs of justice-involved individuals, children with complex medical conditions, and the growing aging population.

The initiative proposal is organized by the three primary goals of CalAIM: to utilize Whole Person Care approaches and address social determinants of health, increase flexibility and reduce the complexity of the Medi-Cal system, and to drive delivery system transformation through payment reform, system modernization, and value-based initiatives. The first two goals are outlined in detail in the proposal.

Goal One: Identify and Manage Member Risk and Need Through Whole Person Care Approaches and Addressing Social Determinants of Health

DHCS is proposing reforms that will help ensure that all Medi-Cal enrollees – including those with chronic illnesses or disabilities, access to care issues, or those that require multidisciplinary care – have their needs met. They propose to do this by focusing on a whole-person care approach and initiating the following reforms:

  • Require plans to submit local population health management plans.
  • Implement new statewide enhanced care management benefit.
  • Implement in lieu of services (e.g. housing navigation/supporting services, recuperative care, respite, sobering center, etc.).
  • Implement incentive payments to drive plans and providers to invest in the necessary infrastructure, build appropriate enhanced care management and in lieu of services capacity statewide.
  • Evaluate participation in Institutions for Mental Disease Serious Mental Illness/Serious Emotional Disturbance Section 1115 Expenditure Waiver.
  • Require screening and enrollment for Medi-Cal prior to release from county jail.
  • Pilot full integration of physical health, behavioral health, and oral health under one contracted entity in a county or region.
  • Develop a long-term plan for improving health outcomes and delivery of health care for foster care children and youth.

Goal Two: Moving Medi-Cal to a More Consistent and Seamless System by Reducing Complexity and Increasing Flexibility

These reforms look to reduce county-to-county differences and offer more predictability by standardizing services and implementing administrative and financial efficiencies across the state and delivery systems. DHCS’s recommendations include:

Managed Care

  • Standardize managed care enrollment statewide
  • Standardize managed care benefits statewide
  • Transition to statewide managed long term services and supports
  • Require Medi-Cal managed care plans be National Committee for Quality
    Assurance accredited
  • Implement annual Medi-Cal health plan open enrollmen
  • Implement regional rates for Medi-Cal managed care plans

Behavioral Health

  • Behavioral health payment reform
  • Revisions to behavioral health inpatient and outpatient medical necessity
    criteria for children and adults
  • Administrative behavioral health integration statewide
  • Regional contracting
  • Substance use disorder managed care program renewal and policy improvements


  • New benefit: Caries Risk Assessment Bundle and Silver Diamine Fluoride for young children
  • Pay for Performance for adult and children preventive services and continuity of care through a Dental Home County Based Services

The CalAIM proposal out of DHCS kicks off the next step of stakeholder engagement in developing the final plan. From November 2019 to February 2020, five CalAIM workgroups, along with the Stakeholder Advisory Committee (SAC), the Medi-Cal Health Advisory Panel (MCHAP), and other convenings will meet to discuss and revise the proposals.

“DHCS plans to finalize all proposals for submission to CMS in the May to July period of 2020 based on the input we will receive from our partners through this process, but also dependent on the funding availability through the state budget process,” reads the proposal.