About the Medi-Cal Program
When Medi-Cal was created as California’s Medicaid program in 1965, it was intended to be a marginal cost plan in which doctors provided care to a handful of Medi-Cal patients, while maintaining their normal practice.
Overseen by the California Department of Health Services (DHS) and the federal Health Care Financing Administration (HCFA), Medi-Cal quickly became a contentious issue as physician payment rates were decided. The Code of Federal Regulations laid out the Medicaid physician payment guidelines in 1966 assuring “equal access” to providers by recipients of the program.
By the early 1970’s, however, the state attempted to cut Medi-Cal physician fees arguing that the program ran a budget deficit, even though the number of Medi-Cal patients was quickly rising. Thus began the long debate over physician reimbursement rates.
Throughout the 1980’s and 90’s, various cuts and increases for physician services were approved. Based on need, rates for certain services and facilities, such as obstetrics and rural care, were raised while rates for outpatient care remained the same. As a result, physician participation in Medi-Cal came into the forefront of California healthcare.
Major Legislative Milestones
| 1965 | Medi-Cal is created. |
| 1966 | California Medical Association (CMA) publishes California Relative Value Studies (CRVS). CRVS assigned “unit values” to a list of medical procedures which physicians then applied to a dollar conversion to derive a price for services. Subsequently, the state began using the CRVS to calculate Medi-Cal physician rates. |
| 1970 | Federal judge blocks attempt to cut Medi-Cal rates by 10% |
| 1975 | First Medi-Cal managed care programs are authorized to begin enrollment |
| 1976 | Assembly Bill 4242 requires DHS to annually review Medi-Cal physician rates. |
| 1988 | Expanded coverage for certain low-income families |
| 1990 | Coverage expands further for children and pregnant women |
| 1990 | The Little Hoover Commission reports low physician participation in Medi-Cal |
| 1990 | Clark v. Kizer examines “equal access” requirement |
| 1992 | Orthopaedic Hospital v. Kizer says DHS must consider “efficiency, economy and quality of care” in setting Medi-Cal rates |
| 1993 | Legislation is passed to shift more Medi-Cal patients into managed care plans |
| 1998 | Various reports are published discussing negative impact of Medi-Cal rates on provider participation |
Medi-Cal Basics
MEDI-CAL is currently governed by three main entities:
- Federal Centers for Medicare and Medicaid Services (CMS) which provides regulatory oversight and reviews/monitors program rules
- California Department of Health Services (DHS) which administers Medi-Cal and sets eligibility, benefit, provider, payment and beneficiary cost-sharing levels
- County Health and Social Services Departments which conducts eligibility determination and oversees enrollment and recertification
Eligibility Factors:
- Family Income
- California Residency
- Institutional Status
- U.S. Citizenship
- Deprivation
- Eligibility for Other Public Assistance Programs
Medi-Cal mandatorily covers:
- Low income families participating in CalWORKS and those that meet financial standards for AFDC
- Seniors and people with disabilities participating in the Supplemental Security Income (SSI) program
- Children and pregnant women with family incomes below specified levels
- Children receiving foster care or adoption assistance
- Certain low-income Medicare beneficiaries
Immigrant Coverage:
- May be eligible if they meet categorical, financial and residency requirements
- Full-scope Medi-Cal is available to Lawful Permanent Residents, refugees, and those under asylum among others
Enrollment Process:
In Person: To enroll in Medi-Cal on an individual basis, an applicant can apply at their local county social services department or through hospitals and clinics where social services employees are located. Doctors can request temporary coverage for children or pregnant women who are still in the application process.
Mail: Adults, children and pregnant women can send in an application via mail to county social service departments or through the Healthy Families program.
Electronic: Using the Health-e-App program, applications for Medi-Cal can be submitted electronically.CURRENT MEDI-CAL STATISTICS
1 in SIX Californians under age 65
1 in FOUR children in California
TOTAL: 6.5 million people
| Ethnicity | Age/Disability | Fee for Service Expenditures |
| 51% Latino | 47% Children | 28% Hospital Inpatient |
| 22% Caucasian | 28% Adults | 23% Long term care |
| 11% African-American | 13% People w/ disabilities | 22% Pharmacy |
| 10% Asian/Pacific Islander | 12% Seniors | 18% Professional Medical Service |
| 6% Other/unknown | 3% Dental | |
| 6% Other fee-for-service | ||