California’s ambitious Medicaid experiment gets tripped up in implementation

KFF Health NewsDec 5 2023

Nearly two years into Gov. Gavin Newsom's $12 billion experiment to transform California’s Medicaid program into a social services provider for the state's most vulnerable residents, the institutions tasked with providing the new services aren't effectively doing so, according to a survey released Tuesday.

As part of the ambitious five-year initiative, called CalAIM, the state is supposed to offer the sickest and costliest patients a personal care manager and new services ranging from home-delivered healthy meals to help paying rental security deposits.

But a quarter of the health care insurers, nonprofit organizations, and others responsible for implementing the program don't know enough about it to serve those in need, and many are not equipped to refer and enroll vulnerable patients, according to research by the California Health Care Foundation. (KFF Health News publishes California Healthline, an editorially independent service of the California Health Care Foundation.)

The survey found that only about half of primary care providers and hospital discharge planners are very or somewhat familiar with the initiative, even though they are essential to identifying patients and referring them for services.

"These workers are on the front lines and if they don't know about it, that's a pretty easy win to educate them so they can help more people," said Melora Simon, an associate director at the foundation, which conducted the survey between July 21 and Sept. 12. The initiative debuted in January 2022.

"These workers are most likely to see people in the hospital, in crisis," she added, and "have the opportunity to do something about it."

The roughly two dozen managed care insurance companies serving patients in Medi-Cal, California's Medicaid program for low-income people, are responsible for identifying and enrolling patients into the program, and providing the new services. To make this happen, they contract with local government agencies, community nonprofit groups, social service organizations, hospitals, community clinics, and more. Those organizations can also make referrals and link patients to new services. The foundation surveyed 1,196 of these so-called implementers.

Most of the respondents said state payment rates do not cover the cost of providing expensive social services, and half say the workforce they need to deliver them is "tapped out and overwhelmed."

About 44% also cited inconsistencies and different rules imposed by managed care plans, making participation very or somewhat challenging. For example, some insurers provide on-the-spot Uber rides for doctor appointments while others offer only a bus pass. Plus, not all plans offer the same services.

The survey did pinpoint some early successes. For instance, about half of respondents said the initiative has enabled them to serve more people, and that their ability to manage the comprehensive needs of patients has gotten better.

Tony Cava, a spokesperson for the state Department of Health Care Services, which administers Medi-Cal, acknowledged that the survey findings "resonate" and said the state is working to streamline and standardize patient referrals and authorizations.

"Implementers are on board with the core goals, and we are seeing improvements. But there is room to increase familiarity with CalAIM and broaden and deepen networks," Cava said.

He said CalAIM represents a major shift in how Medi-Cal delivers care, and that the "kind of seismic system change that we are undergoing takes time."

"Rather than reactive, we are moving toward a system that is proactive and considers all factors affecting health — the social drivers of health — and not simply what may happen inside of a medical facility," he added.

The department provides financial and technical assistance to implementers, though only about one-third of survey respondents have found the training, technical guidance, and other resources adequate.

Van Do-Reynoso, chief healthy equity officer for CenCal Health, the Medi-Cal health insurer serving Santa Barbara and San Luis Obispo counties, acknowledged that it has been difficult to provide a full complement of CalAIM services. She cited a variety of obstacles such as inadequate reimbursement, lack of housing, and working with social services agencies unfamiliar with the health care system.

Nearly 3,000 CenCal enrollees are receiving CalAIM services, she said, many of them housing- and homelessness-related.

"We are working hard to better engage with hospital CEOs, community providers, and medical providers," Do-Reynoso said. "People are getting housed. They're practicing sobriety. It has only whetted our appetite to continue doing this work."

When Newsom launched CalAIM, the Democratic governor promised it would transform Medi-Cal. The goal, his administration said, is to improve health and prevent people from winding up in costly institutions like the emergency room and jail, and to help move homeless people into housing.

It’s unclear how many of the 15.2 million Californians enrolled in Medi-Cal are eligible for new services and benefits, but several large populations qualify, including homeless Californians, people leaving jail or prison, foster children, people with severe mental illness or addiction, and older nursing home residents who want to transition home.

So far, about 141,000 Medi-Cal patients have a personal care manager through CalAIM, according to Cava, though hundreds of thousands more likely qualify. About 76,000 patients are receiving other social services, which are optional for plans to offer, he said.

In some cases, qualified Medi-Cal enrollees are turning down new services because they are being offered at the wrong time or by the wrong person, Simon said. For instance, a homeless person might not accept services from a police or code enforcement officer.

Insurers say they want to do more but need more help from the state.

"I am very hopeful that a year from now, we are going to be able to demonstrate even greater strides," Do-Reynoso said. "What we hear often is what is reflected in the survey. We need higher rates, more communication, a more streamlined approval process."

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.