Medi-Cal: anticompetitive conduct.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law authorizes the Director of Health Care Services to contract, on a bid or nonbid basis, with any qualified individual, organization, or entity to provide services to, arrange for or case manage the care of Medi-Cal beneficiaries. Existing law authorizes the renewal of a contract if the provider continues to meet the requirements of the Medi-Cal program and the contract. Under existing law, failure to meet those requirements is cause for nonrenewal of the contract. Existing law authorizes the department to terminate or decline to renew a contract, in whole or in part, if the director determines that the action is necessary to protect the health of the beneficiaries or the funds appropriated to carry out the Medi-Cal program. Under existing law, one of the methods by which Medi-Cal services are provided is pursuant to contracts with various types of managed care plans. Existing law, commencing July 1, 2019, requires a Medi-Cal managed care plan to comply with a minimum 85% medical loss ratio. Existing law requires, effective for contract rating periods commencing on or after July 1, 2023, a Medi-Cal managed care plan to provide a remittance to the state if the ratio does not meet the minimum ratio of 85% for the corresponding reporting year. This bill would authorize the department to terminate a for-profit Medi-Cal managed care plan contract if the Attorney General determines that the Medi-Cal managed care plan engaged or engages in anticompetitive conduct or practices, as specified, or if the department determines that the Medi-Cal managed care plan has a pattern or practice of not complying with the medical loss ratio, as described above. The bill would specify that nonrenewal of a contract under these provisions would not qualify the applicant for an administrative hearing. The bill would apply these provisions only to new contracts, and renewals of existing contracts, executed on or after January 1, 2019.