In summary

By championing real reform, Gov. Gavin Newsom has an opportunity to reform Medi-Cal’s managed health care system for children.

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By Mike Odeh, Special to CalMatters

Mike Odeh is director of health policy at Children Now,

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Children should get the health care they need to grow and learn, and taxpayers should get what they pay for. Yet new research shows that managed care plans are neither delivering the care they agreed to provide our children nor meeting their obligations under contracts with California’s Medi-Cal program. 

As the Newsom administration prepares to negotiate the next round of Medi-Cal managed care contracts, the time for reform is now.

Managed care plans cover 89% of children under Medi-Cal, so their performance largely determines the health of California children. That’s why Medi-Cal’s managed care contracts require plans to ensure that kids get specific, pediatrician-recommended care on a specific, developmentally appropriate timeline. Annual check-ups, well-baby screenings, vision tests, appropriate medications and other services are intended to spot any health or developmental issues early and keep manageable conditions under control.

Children Now looked at data on how Medi-Cal managed care plans connected children to pediatrician-recommended care. The data revealed three alarming conclusions: statewide, kids aren’t getting pediatrician-recommended care; some plans do much worse than others, and; because payments aren’t based on performance, managed care plans have no real incentive to improve.

Statewide data shows that California ranks 50th in the nation on well-baby screenings. Fewer than half, 48% of kids covered by Medi-Cal managed care received an annual check-up, only 19% of school-aged kids received a vision screening, and fewer than 40% received blood lead screenings. Plans serving 15 counties fell short of minimum performance standards on well-child visits for young children. And plans serving 27 counties failed to meet minimums for ensuring that children with asthma got needed medicine.

Quality of care also varies widely across counties, and even among plans serving the same county. For example, 83% of infants and toddlers in Orange County’s CalOPTIMA health plan received a pediatrician-recommended developmental screening, whereas health plans in several counties, including most northern counties, screened fewer than 10% of their infants and toddlers. And one plan serving Los Angeles County screened two-thirds of infants and toddlers, while the other screened fewer than one-fifth.

But plans are paid based how many children they cover, not on whether those children get the care they need. So California taxpayers paid managed care plans between $4 billion and $5 billion to provide care for all the kids they insure, while the data clearly shows they aren’t coming anywhere close.

Fortunately, the current contracts are expiring, and Newsom administration officials are taking preliminary steps to begin the next round of contract negotiations. This opens a critical window for action to reform managed care payment and contracting policy, eliminate barriers to care, and improve health outcomes for children.

Contract and payment reform must begin by translating the contractual guarantee of pediatric preventive care into a guaranteed resource commitment. Today, payments are based on the costs of providing care, but plans aren’t required to actually spend that money on care.

Policymakers should work with plans and providers to determine the minimum per-child cost of pediatrician-recommended preventive care. And plans should be required to spend no less than that on care for every child.

Most importantly, reform should base plans’ pay on their performance. Contracts should fund care coordination, so plans have incentives to help parents and providers spot and close gaps in children’s preventive care. And contracts should provide incentive payments when plans improve health outcomes or reduce health disparities for kids. 

Finally, reform should hold plans accountable – with meaningful monetary consequences when plans fall below minimum performance standards.

When it comes to children’s health, California’s Medi-Cal contract and payment system is broken. Gov. Gavin Newsom has a once-in-a-childhood opportunity to fix it, by championing real reform. The health of our children and billions of taxpayer dollars are on the line, and the time for leadership is now.

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