Medi-Cal Program: A Case Study

The Problems of Medi-Cal Program

The California Medicaid program, also known as Medi-Cal is experiencing a rapid growth in its membership. With the rollout of Medicaid expansion in 2014, it has led to the explosion in Medi-Cal enrollment. As of October 2015 the Medi-Cal program has reached about 12 million enrollees, which constitutes 30% of the state’s population, and consumes 15% of state expenditures. Given its size and spending, one question deserves all Californians’ attention is that “do we have sufficient resources to provide care to all Medi-Cal beneficiaries”?

Prior studies have shown that the Medi-Cal program is associated with frequent hospital admissions and heavy reliance on the emergency department (ED) in comparison to commercially

They are mainly defined by their mission to maintain an open-door policy, providing health care services to individuals and their families regardless of their ability to pay. These clinics comprise licensed primary care clinics, clinics operated by governmental entities such as counties and cities, and clinics operated by federally recognized Indian tribes or tribal organizations.

Safety-net clinics may be operated by for-profit corporations, public agencies, or private, nonprofit organizations. There is no legal definition of a safety-net clinic (Bindman, Grumbach, Bernheim, Vranizan, & Cousineau, 2000).

Many safety-net clinics have specific legislative mandates to provide health care services to the medically indigent as a condition of federal or state funding and/or reimbursement from public health programs. For example, whether operated by public agencies or private nonprofit organizations, federally qualified health centers (FQHCs) and FQHC look-alikes (described further in Section VI) are required by federal law to provide certain services. Similarly, counties operate clinics to provide services pursuant to the Section 17000 mandate under state

This small fraction of enrollees disproportionately impacted spending, representing a whopping 42% of the total spending Medicaid nationwide ("Medicaid Facts: Medicaid Spending by Enrollment Group ", 2011). The statistic for the state of California was worse yet, with disabled beneficiaries representing just 9% of all beneficiaries, nevertheless constituting 41% of the spending ("Medicaid Facts: Distribution of Medicaid Enrollees by Enrollment Group," 2011; "Medicaid Facts: Medicaid Spending by Enrollment Group ", 2011). The trends in spending are hardly news though, as the proportion of expenditures on disabled beneficiaries has only increased in the last decades (Vladeck, 2003). Naturally, cost cutting methods have been a topic of interest among providers, payers and policy makers. California, on the heels of the Patient Protection and Affordable Care Act (ACA), was one of the first states to plan reform through submission of the Medicaid 1115 waiver in 2010. Notably, one component of this Bridge to Reform is a transition of Seniors and Persons of Disabilities (SPD) from traditional Fee For Service (FFS) to managed care in an effort to promote coordinated systems of care more cost efficiently. Another major component is the support for reform of