​Community Reinvestment (CR) Policy and Frequ​ently As​​ked ​​​Questions 

​The following responses to Frequent​ly Asked Questions (FAQs) p​​rovide 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 Imp​lem​​entation 

Q: Regarding the initial Community Reinvestment plan, can you confirm whethe​​r MCPs should submit a two-year plan for 2025–2026 a​nd 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 Commu​​​nity 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 R​​einvestment, 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 addi​​tional 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.  

Q: Do MCPs need to complete a stakeholder attestation for the portions of th​​e 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 Assessme​​nt (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. 

Q: Will HEDIS reporting for the Comm​unity Reinvestmen​​t 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 st​​​arting 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 MC​​P’s annual net income d​​et​​ermined 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 th​​e funding oblig​​​a​​tions 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 M​​CP or Qualifying Su​​bcontractor 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 t​​he 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). 

A: If an MCP or its Qualifying Subcontractor o​perates in multiple counties, DHCS will calculate the Base Community Reinvestment funding obligations with the following allocation methodology:  

Q: What is the definition of "Member Grants" in the con​​text 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.