WebCom Page HeaderCommunity Reinvestment (CR) Policy and Frequently Asked Questions The following responses to Frequently Asked Questions (FAQs) provide additional guidance and clarification to Medi-Cal managed care plans (MCPs) regarding the Community Reinvestment All Plan Letter (APL) 25-004 which establishes requirements for MCPs to reinvest a portion of their net income into their local communities to address unmet health-related social needs and support community wellbeing. General Implementation Q: Does the Base Community Reinvestment requirement apply to all subcontractors that carry a Knox-Keene license, including limited/restricted licenses? When is a Subcontractor subject to the Community Reinvestment requirements? A: No, the Base Community Reinvestment requirement does not apply to all subcontractors that carry a Knox-Keene license. The Base Community Reinvestment requirement applies to Knox-Keene Licensed Health Plans in a Subcontractor Agreement with an MCP, including both fully licensed and limited/restricted Knox-Keene entities, which are required to submit a Medical Loss Ratio (MLR) report pursuant to APL 24-018 and assume risk for at least 100,000 Members or at least 50% of the MCP’s Members within a given county or rating region. The Community Reinvestment requirement does not apply to subcontractors that are not Knox-Keene licensed plans. Q: Do MCP contributions to Local Health Jurisdictions (LHJs) for CHA/CHIP through the Population Needs Assessment (PNA) process count toward Community Reinvestment obligations, and will these PNA requirements extend beyond 2027? A: No, MCP contributions to LHJs in support of CHA/CHIP development, whether through funding or in-kind staffing, do not count toward Community Reinvestment obligations. These activities are part of the PNA requirements, which are separate and distinct from the Community Reinvestment program. MCPs cannot use Community Reinvestment funds for activities included in their MCP contract, including support for CHA/CHIP development. The PNA requirements to provide resourcing (funding and/or in-kind staffing) for LHJ CHA/CHIP development will continue beyond 2027. Q: MCPs are responsible for ensuring that their Subcontractors comply with all applicable state and federal laws and regulations (APL page 18) to avoid a Corrective Action Plans (CAP) and administrative and/or monetary sanctions for noncompliance. Are MCPs expected to verify Qualifying Subcontractors’ compliance with Community Reinvestment requirements by requesting additional documents not included in the APL? For example, will the MCP need to analyze activities that are not part of the MCP’s Community Reinvestment Plan? A: MCPs are required to ensure that their Subcontractors comply with the APL. MCPs are not required to request or analyze additional documentation beyond what is specified in the APL unless necessary to confirm compliance with contractual or reporting requirements. Q: The APL uses the title “Public Health Director” as the individual that must provide the attestation in Appendix B, Exhibit. If there are multiple Public Health Directors or Public Health Officers within a county (for example, Los Angeles County, which has three Local Health Jurisdictions each with its own Public Health Officer), are all of them required to submit an attestation? A: The term Public Health Director refers to the individual designated as the lead public health official for the jurisdiction. In some counties, this position may be titled Public Health Officer rather than Public Health Director. In counties with multiple Local Health Jurisdictions such as Los Angeles County, all designated Public Health Directors or Officers are required to submit the attestation in Appendix B for their respective jurisdictions. Q: When will DHCS release additional guidance (specific timelines and processes) related to the Community Reinvestment program and Appendix B submission requirements? A: DHCS will issue additional guidance and documentation on the Community Reinvestment program and submission requirements, however a specific release date has not yet been established. Updates will be communicated to MCPs once available. Q: What are the immediate deliverables for MCPs under the Community Reinvestment requirement? A: At this time, MCPs should have already updated their Policies and Procedures (P&P) to reflect Community Reinvestment requirements, as required within 90 days of the policy release. The next deliverable required will be the initial Community Reinvestment Plan based on Calendar Year (CY) 2024 net income. This deliverable will be due in early Q3 2026. DHCS will provide additional information on this submission process by Q2 2026. Q: Regarding the initial Community Reinvestment plan, can you confirm whether MCPs should submit a two-year plan for 2025–2026 and align with the three-year cycles going forward, or if the first cycle will begin in 2027?A: MCPs are not required to submit a Community Reinvestment Plan for the 2025-2026 period. The first deliverable will be the Initial Community Reinvestment Plan due in Q3 2026, based on 2024 net income. This initial Community Reinvestment Plan will cover a three-year investment period from 2027-2029, which will be the start of the first cycle. DHCS will issue preliminary funding obligations annually in early Q2; for CY 2024, this will occur in early Q2 2026. MCPs must submit updated Community Reinvestment Plans annually in Q3 to reflect how funds will be allocated to existing or new activities. Q: How will DHCS provide technical assistance for Community Reinvestment, and when will MCPs be able to ask questions? A: DHCS plans to provide guidance and support through an upcoming MCP-focused webinar, followed by an All-Comer webinar for all stakeholders. The FAQs will be periodically updated to answer additional questions. MCPs are encouraged to continue submitting specific questions to the MCP’s MCOD Contract Manager. DHCS will address these questions on a case-by-case basis. Community Reinvestment Planning Q: What are the requirements for MCPs in the first year of operation in a given county? What are the requirements if the first year of operation is 2024 and the MCP has negative net income in CY 2025? A: An MCP in its first year of operation in a given county is subject to Community Reinvestment beginning the following year in that county. For example, an MCP in its first year of operation in a given county in CY 2024 will be subject to Community Reinvestment requirements based on the MCP’s CY 2025 net income and CY 2025 MCAS measure performance. If the MCP has negative net income in CY 2025 and there are no Qualifying Subcontractors with positive net income for CY 2025, the MCP is not required to submit a Community Reinvestment Plan in Q3 CY 2027 based on CY 2025 negative net income. Q: If an MCP had no net income in CY 2024 or is newly operating in a county and therefore becomes subject to Community Reinvestment requirements beginning in CY 2025, will it follow a full three-year investment cycle or a shortened (two-year) cycle? A: MCPs subject to Community Reinvestment requirements beginning in CY 2025 will have a shortened investment cycle and will submit a two-year or one-year Community Reinvestment Plan, as applicable, once positive net income is reported in a subsequent year within the investment period. This is consistent with the timeline established in Section VII of the APL. For example, if an MCP or a Qualifying Subcontractor has positive net income for CY 2026, they would receive their reinvestment obligation from DHCS in Q2 2028 and would be required to submit a one-year Community Reinvestment Plan in Q3 2028 for proposed investments exhausted by the end of CY 2029. Q: How can MCPs effectively identify funding opportunities for their Community Reinvestment Plan that aligns with funding obligations or impactful CHIP-related activities? A: MCPs are expected to begin the Community Reinvestment planning process starting early CY 2025 by collecting data and soliciting stakeholder input on community needs. This includes engaging with Local Health Jurisdictions to gather information on the CHA and CHIP, and consulting with the MCP’s Community Advisory Committees (CACs) to solicit Community Reinvestment recommendations. MCPs have also been meaningfully participating in the CHA/CHIP process since 2024, which should provide an ongoing foundation for alignment. MCPs should already have identified priority areas and potential opportunities through this early planning and engagement, allowing MCPs to align funding with impactful community-identified needs. MCPs may identify grantee organizations through this process, and may also elicit suggestions from philanthropies funding locally. MCPs may find organizations including but not limited to umbrella philanthropy associations such as Philanthropy California, an alliance of SoCal Grantmakers, Northern California Grantmakers, and Catalyst of San Diego & Imperial Counites; community foundations (Community Foundation Locator | Community Foundation National Standards); or nonprofit research and information platforms like Candid or Charity Navigator to be helpful in identifying potential grantees, as are local knowledge and networks. (Note, DHCS has not assessed any of these grantee organizations and referral to these resources should not be interpreted as an endorsement of these entities.) Q: What should MCPs use to inform Community Reinvestment activities if a Local Health Jurisdiction (LHJ) does not have a current Community Health Assessment (CHA) or Community Health Improvement Plan (CHIP)? A: MCPs and their Qualifying Subcontractors are required to ensure that Community Reinvestment activities are directly informed by community-identified needs. If an LHJ does not have a current CHA or CHIP, MCPs may use the county’s Strategic Plan or an equivalent county-level health improvement plan to guide the identification of community needs and inform proposed Community Reinvestment activities. All other requirements outlined in the APL for Community Reinvestment planning and alignment must still be met. Q: If an investment or activity included in the Community Reinvestment Plan is not implemented or requires significant change due to evolving circumstances, what is the process for notifying or requesting a Community Reinvestment Plan amendment? A: DHCS will issue additional guidance and documentation on the Community Reinvestment program and submission requirements, however a specific release date has not yet been established. Updates will be communicated to MCPs once available. Until further guidance is issued, MCPs are welcome to propose Community Reinvestment Plan amendments on an ad hoc basis on behalf of themselves or their Qualifying Subcontractor(s). Q: If an initiative in the Community Reinvestment Plan exceeds or does not meet the expected investment level, can funding be adjusted across other investments in the Community Reinvestment Plan? What is the process for this? A: MCPs submit a Community Reinvestment Plan each year within the three-year investment period and may adjust funding allocations across activities in subsequent Community Reinvestment Plans within the same investment period subject to DHCS review and approval. In addition, in exceptional circumstances and subject to DHCS approval, MCPs may also be permitted to carry over unspent funds to the next three-year investment period if there is compelling justification for not fully expending funds within the applicable period. Any such adjustments or carryover requests must be documented and approved by DHCS. Q: How should MCPs reflect the contributions of Qualifying Subcontractors toward shared Community Reinvestment activities, particularly for those submitting multi-county Community Reinvestment Plans? A: Each MCP is responsible for submitting its own Community Reinvestment Plan and the Community Reinvestment Plan of their Qualifying Subcontractor(s). If a Qualifying Subcontractor transfers their investment obligation to the MCP, the MCP will include that in their Community Reinvestment Plan submission. DHCS is working on a Community Reinvestment Plan submission template that will allow MCPs to report their own obligation as well as that of the Subcontractor. At the end of each three-year investment period, MCPs must develop and post a Community Reinvestment Report on their website and provide the link to DHCS. MCPs may describe in the report any joint or coordinated investments made with other plans in the county to highlight collective investment efforts. Q: When multiple MCPs operate in the same county, what is the expectation or preference regarding aligning or pooling Community Reinvestment funding? A: DHCS encourages MCPs and Qualifying Subcontractors operating in the same county to collaborate on Community Reinvestment activities to maximize the collective impact of funds. The intent is to strengthen alignment with community-identified priorities and to increase the overall impact of investments when plans work together. MCPs are expected to consider opportunities to align investments. How MCPs choose to collaborate, whether among all plans in a given county together or a subset, is at their discretion. MCPs pooling Community Reinvestment funding will only be required to report on their own activities and investments. Q: Are convenings such as Tribal Health or Justice-Involved convenings considered part of the Community Reinvestment program, or are they part of the community engagement planning process? A: These convenings are part of the community engagement planning process. Community Reinvestment obligations may not be met through expenditures for procedural or administrative activities related to Community Reinvestment planning or implementation, including community or stakeholder engagement activities. Q: With regards to Community Reinvestment, what happens if the MCP and the LHJ/BH Directors do not agree on funding allocation? Who ultimately has decision-making authority? A: MCPs are required to include LHJs and County Behavioral Health in their planning and decision-making process. The intent is for MCPs to work in close collaboration with LHJs and County BH to ensure alignment in priorities and that the investment strategy is “generally agreeable” to LHJs and County BH. In cases where the MCP and LHJ/BH do not agree on the Community Reinvestment Plan, the MCP’s primary responsibility is to ensure the investment strategy aligns with community needs identified in the CHA/CHIP. An attestation confirming CHA/CHIP alignment from LHJs and County Behavioral Health Directors is required, and the Directors may include specifics about where there may be ongoing areas of disagreement in this attestation, but the MCP has final decision-making authority over specific funding allocation and other details of the Plan. Q: For multi-plan counties, what is DHCS’ expectation for cross-plan and plan/LHJ involvement, alignment in funding priorities across plans and LHJs, and CHEO collaboration across plans? A: In counties where multiple MCPs operate, the MCPs and Qualifying Subcontractors must coordinate with other MCPs operating in the same county to engage with LHJs during the Community Reinvestment planning process, consistent with MCP requirements for the CHA/CHIP process. DHCS encourages all MCPs and Qualifying Subcontractors operating in the same county to align Community Reinvestment activities identified by the community to maximize the collective impact of funds. MCPs will be required to attest that they collaborated with other MCPs when submitting their Community Reinvestment Plan. However, how MCPs choose to collaborate is at each plan’s discretion. Similarly, each MCP (and its Qualifying Subcontractors as applicable) must engage its Chief Health Equity Officer (CHEO) in the Community Reinvestment planning process, to ensure all Community Reinvestment Plans align with overall health equity needs and priorities. How CHEOs collaborate, and the specific role of each CHEO in the planning process, is also at MCP discretion. Q: Do MCPs need to complete a stakeholder attestation for the portions of the investment allocated to 2025 and beyond? A: Starting with Community Reinvestment based on CY 2025 net income (and annually thereafter), MCPs must provide Attestations of Support from local Public Health and Behavioral Health Directors indicating the proposed investments included in the annual Community Reinvestment Plan generally align with community needs identified in the Community Health Assessment (CHA)/Community Health Improvement Plan (CHIP) and Behavioral Health Transformation (BHT) processes and comply with all other APL requirements. All APL requirements apply whether a proposed activity was previously committed to or is newly identified. Allowable Use of Community Reinvestments Funds Q: For activities under mandatory use categories such as Cultivating a Health Care Workforce, will DHCS consider investments in non-traditional and non-health plan contracted workforces such as information technology or health care research – that support or improve health care delivery as eligible for Community Reinvestment? A: Yes, DHCS will consider investments in non-traditional and non-health plan contracted workforces which support or improve healthcare service delivery, as long as they fall within the parameters of mandatory use categories and meet all other requirements outlined in the APL. Calculating & Communicating Funding Obligations Q: How will DHCS determine the net income used to calculate the Community Reinvestment obligation? A: DHCS will use the net income reported in the MLR submission, adjusted as appropriate, for the applicable CY to determine the Community Reinvestment obligation amount. Q: Is there a more specific time frame when MCP will receive funding obligations from DHCS in Q2 of CY 2026? A: MCPs will receive funding obligations from DHCS in April 2026. Q: How should MCPs administer Community Reinvestment funding in the community? Should funds be provided directly to County BH and Public Health departments or to organizations implementing activities under the permissible use categories? A: Once DHCS approves the Community Reinvestment Plan, each MCP has the discretion to determine how to administer its funds, consistent with the approved plan. MCPs may partner with county Behavioral Health or Public Health departments, community-based organizations, or other entities to implement approved activities, as appropriate. Funding should be directed to organizations best positioned to carry out the proposed Community Reinvestment activities and achieve meaningful community impact. Q: If an MCP does not have positive net income and does not meet the minimum quality measure performance thresholds for the applicable CY, is the MCP still required to make a Quality Achievement Community Reinvestment? A: No, if an MCP does not have positive net income for the applicable calendar year, it does not have a Community Reinvestment obligation. Only MCPs with positive net income for each applicable year are subject to the Base and/or Quality Achievement Community Reinvestment obligations. Q: If an MCP does not have a positive net income, but a Qualifying Subcontractor does, which entity is responsible for the Community Reinvestment funding, the Qualifying Subcontractor or the MCP? A: If the MCP does not have positive net income but a Qualifying Subcontractor does, the Qualifying Subcontractor is responsible for the Community Reinvestment obligation. Qualifying Subcontractors are permitted, but not required, to transfer their Base Community Reinvestment obligation to MCPs to administer funds on their behalf, provided the MCP’s investment of these funds meets all requirements under the APL. Given their vital role in the delivery of services to Members, DHCS encourages Qualifying Subcontractors to actively participate in the Community Reinvestment program. In either case, the MCP is responsible for submitting the Community Reinvestment Plan and ensuring that all applicable deliverables are submitted on behalf of the Qualifying Subcontractor. Q: If an MCP and Qualifying Subcontractor do not have positive net income, what are the expectations for Community Reinvestment planning? A: Beginning in early CY 2025, all MCPs are expected to engage in Community Reinvestment planning, including collecting data and soliciting stakeholder input on community needs. If an MCP or Qualifying Subcontractor reports negative net income in the initial year of the three-year investment period but later reports positive net income, they must submit a Community Reinvestment Plan for the year(s) for which they have positive net income during the investment period. For this reason, MCPs should actively engage in Community Reinvestment planning even in years when they do not have a submission requirement, to ensure readiness should a plan be required in a subsequent year. Q: For the Supplemental Guidance on Permissible & Prohibited Use of Funds, can there be a virtual or in person session to go over the scenarios presented in this section to distinguish the examples of upstream, downstream and integrated interventions? A: DHCS does not plan to host a separate session to walk through each scenario in the Supplemental Guidance. MCPs should use the examples provided in the guidance as reference points and use the footnotes in APL 25-004 Appendix A as specific examples to help determine alignment with the permissible use categories. For questions about specific scenarios, MCPs should reach out to their DHCS Contract Manager for clarification. Q: Will HEDIS reporting for the Community Reinvestment program be assessed at the state or county level? A: Per APL 25-007 Attachment C, (which supersedes APL 23-012) DHCS is requiring MCPs to report Medi-Cal Managed Care Accountability Sets (MCAS) data both at the plan- and county-levels. MCP-reported MCAS rates will be audited at the plan level while county-level data will be utilized by DHCS for quality and enforcement use only. Per APL 25-007 Attachment C, and starting Measurement Year 2024 (MY24), DHCS will be applying enforcement tier assignment at the county-level, based on county-level reporting of MCAS rates including HEDIS measures within MCAS. For community reinvestment purposes, DHCS will utilize enforcement tiers and methodology previously described in APL 25-007 Attachment C, related to county-level reporting for MCAS measures. DHCS will leverage the same enforcement tier assignments at the county-level for determination of Quality Achievement Community Reinvestment requirements. For example, if Plan A covers 10 counties, and in Counties 1-8 they are meeting MPLs for all measures, but in Counties 9 and 10 they fall into Enforcement Tier 2 or 3 (as defined in APL 25-007 Attachment C), then Plan A will be subject to additional Quality Achievement Community Reinvestment requirements in Counties 9 and 10. To calculate the overall financial obligation for an MCP that operates in multiple counties, DHCS will calculate the Base Community Reinvestment funding obligations with the following allocation methodology: 5% of Base Community Reinvestment funds equally across counties in which it operates and 95% of Base Community Reinvestment funds in proportion to the plan’s Medi-Cal membership by county. DHCS will determine each MCP’s membership by county for the applicable CY based on the Member months at the time of calculating Community Reinvestment funding obligations. If an MCP operates in multiple counties and is subject to the Quality Achievement Community Reinvestment requirement, DHCS will calculate the MCP’s Quality Achievement Community Reinvestment funding allocations in proportion to its Medi-Cal membership for counties in which it has received an Enforcement Tier 2 or Tier 3 assignment (APL 25-004, pg. 14). Q: How is an MCP’s annual net income determined for Community Reinvestment? Is it calculated across all counties or for each county separately? A: DHCS will calculate MCPs’ annual net income as a statewide aggregate based on annual Medical Loss Ratio (MLR) submissions submitted no later than 12 months after the close of each calendar year. The allocation of Community Reinvestment funds at the county-level will generally be proportional to the MCP’s Medi-Cal membership by county. See Section V of APL 25-004 for the detailed allocation methodology. The Quality Achievement funding obligation (i.e., 7.5% of net income) will only be calculated based on estimated net income for counties in which the MCP receives an Enforcement Tier 2 or 3 assignment (based on an allocation relative to Member months) rather than the MCP’s total statewide net income. Q: Will the funding obligations for Community Reinvestment be shared publicly? A: Once the Community Reinvestment funding obligations are calculated, they will be public record and subjected to the Public Record Act (PRA). In addition, under Section IV of APL 25-004, MCPs are required to post Community Reinvestment Plans on their websites annually (subsequent to DHCS approval). The Community Reinvestment Plans will include the projected allocation of funds across each Community Reinvestment activity for each county in which the MCP operates. Q: If an MCP or Qualifying Subcontractor does not have net income, what are the expectations for Community Reinvestment planning? A: If neither the MCP nor the Qualifying Subcontractor has net income, no CR funding obligation applies for the applicable year, and no Community Reinvestment plan is due to DHCS for the applicable year. For example, if neither the MCP nor the Qualifying Subcontractor has positive net income for CY 2024, no Community Reinvestment Plan is due in Q3 2026 for obligations based on CY 2024 net income. However, MCPs must participate in Community Reinvestment engagement and planning activities as described in Section VII of the APL (pg. 16), such as collecting data and soliciting stakeholder input on community needs. If the MCP or its Qualifying Subcontractors has positive net income in a subsequent CY tied to the investment period, the MCP must submit a two-year or one-year Community Reinvestment Plan (as applicable). Q: If the MCP does not have net revenue, but the Qualifying Subcontractor does have net revenue for the applicable CY, do the dollars for that Community Reinvestment plan come from the Qualifying Subcontractor or the MCP? A: If an MCP has no net income, but the Qualifying Subcontractor has net income, the Qualifying Subcontractor is responsible for fulfilling the CR obligations and is subject to all APL requirements. Any transfer of that obligation to the MCP to administer funds on their behalf is optional. Q: What is the definition of "Member Grants" in the context of Community Reinvestment? A: Member Grants refers to any payments or funds provided directly to members as part of the Community Reinvestment activities. These types of expenditures cannot be used to meet Community Reinvestment obligations as outlined in APL 25-004. WebCom Page Navigation WebCom Page Title WebCom Page Main Content