DHCS & CMS Agree to Medi-Cal 2020 Waiver Framework!

This past Saturday (Halloween), the California Department of Health Care Services announced it had reached a new “conceptual agreement” with the federal Centers for Medicaid and Medicare Services (CMS) on the general framework of “Medi-Cal 2020,” the renewal of the 2010-2015 Medi-Cal waiver.


  • With details to be specified in the coming months, the framework is likely to spur innovation in California counties with respect to delivery system reforms, care for the uninsured, and “whole person care” or integration of health care services with other human services.
  • The current five-year “Bridge to Reform” waiver, which expired on Halloween, is extended through December 31, 2015. Once the new waiver is finalized, it would start in January 2016, and consumer groups should be ready to work with counties to improve care and build on innovative models of health care delivery for the remaining uninsured.
  • The conceptual framework has huge potential to improve care for millions currently on Medi-Cal and to expand access to cost-effective primary care for the remaining uninsured.
  • It will be up to the individual counties to maximize these opportunities for their remaining uninsured—or they could lose safety net care pool dollars.

A waiver is a formal request by a state to the Secretary of Health and Human Services to waive specific Medicaid program requirements to test new ways to deliver care. Since the 1990s, California has made extensive use of waivers to further state health reform goals or more recently, to implement worthwhile reforms—like the Medicaid expansion—ahead of schedule.

The new Medicaid waiver would provide at least $6.2 billion in new funds and likely more over the next five years to California, as well as a framework to encourage innovation in health delivery, dental care, safety-net services for the remaining uninsured, and integration with other human services—“whole person care.”

Though the scale and financing are significantly scaled back from the state’s original renewal application, the new waiver would infuse new resources and provide new flexibility and accountability for improved care for many Californians, including Medi-Cal beneficiaries and the remaining uninsured.

The following key waiver provisions are supported by the conceptual agreement:

  1. Innovative delivery system reforms based at the county-operated public hospitals get green light, though the time frame is limited to one year with the option to renew for another one to three years, depending on findings from a planned independent assessment of uncompensated care. The current waiver had a DSRIP (Delivery System Reform Incentive Payment Program, a federal pay for-performance quality improvement initiative. California’s DSRIP program, the first in the nation, has strengthened care delivery throughout 21 public health care systems, extending quality, coordinated care more accessible and efficient to more patients, with positive results. The DSRIP program has a new acronym: PRIME (Public Hospital Redesign and Incentives in Medi-Cal).
  2. Global payment for county-based safety net programs. Counties will have fresh incentives to re-direct their Disproportionate Share Hospital (DSH, for five years) and at least one year of Safety Net Care Pool (SNCP) dollars ($236 million in federal funds) to innovative approaches to care for their uninsured residents, with flexibility on how they use those dollars both inside and outside the hospital setting—see recent examples. Like a lump sum payment, the global payment, a first in the nation approach, will give counties that have yet to set up indigent care programs all the incentives they need to push ahead. These payments will incentivize cost-effective primary care and discourage expensive hospital-based care—a win-win for counties and uninsured patients alike.
  3. Whole Person Care ($1.5 billion over 5 years). Many of the highest risk patients, for example homeless people or people leaving incarceration, cannot benefit from care without additional supports like housing services or food assistance. It’s one thing to diagnose a homeless patient with diabetes—but that patient won’t get very far in following the prescribed treatment without a roof over their head or the ability to find affordable, nutritious foods.  Under the whole person care pilot provision, counties can engage other social services and supports to help their patients fully benefit from care.
  4. A Dental Transformation Incentive Program ($750 million over 5 years). Under this initiative, the state would have fresh incentives to improve dental care in Medi-Cal using the limited DSHP (Designated State Health Program) dollars still available for California.

Through the waiver negotiation process, concerns about current Medi-Cal beneficiaries’ access to care were raised. The conceptual agreement thus includes an independent assessment of access to care and network adequacy for those enrolled in Medi-Cal managed care plans. Health Access welcomes this assessment and believes it will complement current efforts to ensure timely access to care statewide.

Details Missing From the Conceptual Agreement, Including Any Focus on Equity

A conceptual agreement is just that—a high-level overview of mostly technical areas of the waiver like the various payment methodologies that will be tested over the course of the waiver. The CMS 10/31 letter touches on the metrics for analyzing the success of payment methodologies on triple aim goals (improved quality, lower costs, and better health outcomes)—but no mention of equity or health disparities. Health Access and other advocates will continue to pursue that, since in most of the waiver advisory group discussions, health equity emerged as a core objective for the waiver renewal.

The time between now and December 31 will be used to hammer out the waiver renewal details (“Special Terms and Conditions”), on how these programs will be structured and overseen. Advocates will be looking to make sure the details work to meet the overall goals, including about how Medi-Cal 2020 will be used to reduce health care disparities. For example, payment methodologies can be tied to progress in collecting race and ethnicity and primary language data and making meaningful use of these data to support triple aim goals and better integration and coordination of care for diverse populations with complex health care needs. As noted in the CMS October 31 letter, the PRIME evaluation program will include a broad set of metrics—those metrics should include all measures needed to reduce disparities.

All of these details will need to be addressed by the end of the year. For further details see the October 31 letter from CMS to DHCS officials.  

Health Access is excited that this framework will spur further innovation in counties across the state, on health care delivery, on safety-net services for the remaining uninsured, and on integrating health with other human services.  Community groups have been working with their counties on revamping and improving their safety-net systems, and the conceptual agreement will take those efforts to the next level.  Once the waiver renewal is finalized by year-end, we expect to see an explosion of exciting activity at the county level to improve health care once the details are hammered out.

Next Steps

  • Keep your eyes on the prize: last week a small group of health care consumer advocacy groups sent a letter to CMS outlining the “must-haves’ in the waiver renewal with justifications for California’s full request.
  • Take a minute to thank DHCS Director Jennifer Kent and Medi-Cal Director Mari Cantwell for their dogged persistence on key waiver provisions. This has not been easy!
  • It is our understanding that the waiver stakeholder advisory committees, will be called together again, whether separately or as a block, at least once before the December 31 deadline, to discuss the final terms of the waiver renewal. Watch our blog or your email inbox for details on that process.