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Back to June 2022 Stakeholder Communications Update

Medi-Cal COVID-19 Public Health Emergency (PHE) Operational Unwinding Plan

On May 17, DHCS released the Medi-Cal COVID-19 PHE Operational Unwinding Plan. The two primary purposes of the plan are to: 1) describe DHCS' approach to unwinding or making permanent the temporary flexibilities implemented across the Medi-Cal program during the PHE; and 2) describe DHCS' approach to resuming normal Medi-Cal eligibility operations following the end of the PHE. The PHE is currently set to expire on July 15, 2022, and the U.S. Department of Health and Human Services (HHS) has committed to providing at least a 60-day notice prior to the official PHE end date.

Since the initiation of the PHE, DHCS implemented more than 100 programmatic flexibilities to help minimize the strain to the Medi-Cal program, its beneficiaries, and California's health care providers and systems. While many of these programmatic flexibilities will terminate on or around the end of the PHE, some will continue due to the positive impact they have made on the Medi-Cal program. Additionally, under the continuous coverage requirement in the Families First Coronavirus Response Act, states are required to maintain enrollment of nearly all Medicaid enrollees through the end of the month in which the PHE ends. When continuous coverage requirements expire, states must conduct a full redetermination for all beneficiaries who would otherwise have been subject to redetermination.

The Operational Unwinding Plan is intended to inform the public of DHCS' approach to return Medi-Cal to a normal state of operations. The document also includes additional resources, including information about the DHCS Coverage Ambassadors campaign and links to the Centers for Medicare & Medicaid Services' (CMS) guidance documents.

Governor's May Revision

On May 13, Governor Newsom unveiled his $300 billion fiscal year (FY) 2022-23 May Revision budget proposal, which is an increase of approximately $14 billion compared to the budget released on January 10, 2022. The state now has a projected surplus in excess of $86 billion that is reflected in increased budgetary reserves as well as an increased use of discretionary surplus amounts to fund one-time projects. The Governor's May Revision proposes a $141.8 billion total funds ($37 billion General Fund) budget for DHCS programs and services. The total amount is allocated between $1.6 billion in DHCS state operations and $140.2 billion that supports funding for program costs, partners, and administration.

The COVID-19 PHE continues to significantly impact the DHCS budget, which reflects overall net costs related to the PHE of $11.5 billion total funds. This impact includes the recent extension of the PHE through July 15, 2022. Major updates to the projected impacts of COVID-19 include costs related to the unwinding of the PHE (including eligibility redeterminations); continued separate billing by Federally Qualified Health Centers for vaccine administration; continuation of presumptive eligibility for individuals 65 and older, blind or disabled; and an additional quarter of revenue related to the increased Federal Medical Assistance Percentage (FMAP).

The May Revision includes a significant additional investment in the Equity and Practice Transformation Payment program ($700 million total funds) to advance equity, address gaps in preventive, maternity, and behavioral health care measures, reduce disparities driven by COVID-19, and support practices to transition from fee-for-service reimbursement (where providers are paid for visits/volume and not quality/outcomes) to value-based payments/alternative payment models (e.g., capitated payments tied to quality outcomes)). This aligns with the goals of the Medi-Cal Comprehensive Quality and Equity Strategy and the Bold Goals of 50x2025 initiative. Preparing practices for value-based care also includes implementing practice infrastructure, such as electronic health records and improved data collection and exchange.

The May Revision also proposes $933 million for one-time retention payments to approximately 600,000 California hospital and nursing facility workers who have been at the frontlines delivering care to the most acute patients during the COVID-19 Pandemic. The ongoing response to COVID-19 has significantly impacted California's workforce in hospitals and nursing facilities. Retaining essential workers in these settings is a priority of the Administration, and these payments are designed to help retain this critical workforce in an environment of high vacancies and turnover. The state will provide a baseline payment and will increase the payment up to $1,500 if employers commit to fully matching the additional amount, subject to available funding.

Additionally, DHCS is partnering with the California Health & Human Services Agency to provide grants ($85 million General Fund) to support wellness and build resilience of children, youth, and parents.  These programs, which will help young people who have been impacted by the trauma, stress, and social isolation caused by the PHE, will provide additional Children and Youth Behavioral Health Initiative grants to schools, cities, counties, Tribes, and community-based organizations (CBOs).

DHCS is proposing to provide more funding ($60 million total funds) for Health Enrollment Navigators to continue project activities, with an emphasis on COVID-19 PHE-related activities, specifically helping beneficiaries retain Medi-Cal coverage by assisting with annual renewals, reporting updated contact information, and engaging in outreach to difficult-to-reach target populations.

The May Revision includes a request for $10 million in one-time Opioid Settlement Funds to augment the January Medication Assisted Treatment Expansion Project proposal by increasing the distribution of naloxone to homeless service providers. Additionally, DHCS is proposing to augment the January proposal related to substance use disorder provider workforce training by $29.1 million.

View the DHCS May Revision budget highlights and the Medi-Cal and Family Health Local Assistance Estimates.

Medi-Cal Rx Implementation Update

Since February 2022, Medi-Cal Rx has stabilized the call center and prior authorization (PA) operations. Since then, DHCS and Magellan (MMA) have engaged in an intensive planning process for phased reinstatement of claim edits and PA requirements. The three-phased approach, informed by stakeholder feedback, starts with reinstatement of a small and select group of claim edits and PAs by drug class; moves on to reinstate all PAs that were subject to the mitigation actions taken in early February 2022; and in the final phase, retires the transition policy. The reinstatement approach is gradual and iterative with intense focus on stakeholder preparedness and performance monitoring. It will be refined as necessary over time based on data analytics, operational experience, and stakeholder feedback. Stakeholders are encouraged to comment and provide feedback on this approach via a dedicated email inbox,

Special Population Clinician Liaison Team
Using feedback from various stakeholders, Medi-Cal Rx has created a Special Populations Clinical Liaison Team within the Customer Service Center that is trained to serve the specific needs of populations enrolled in California Children's Services, the Genetically Handicapped Persons Program, and those who have specialty behavioral health conditions. This team is comprised of pharmacy technicians and pharmacists.

Starting on May 9, the Special Populations Clinical Liaison Team is available Monday through Friday, 8 a.m. to 8 p.m., excluding holidays, and serves beneficiaries, providers, and county users who are able to authenticate and discuss protected health information for the given beneficiary. Medi-Cal Rx is committed to delivering timely and safe pharmacy services to Medi-Cal beneficiaries and providers across California.

DHCS is also ensuring that providers are kept updated and that relevant information is communicated to them via e-mail blasts, provider newsflashes, information on the DHCS and Medi-Cal Rx websites, and direct provider outreach. These actions are designed to ensure that Medi-Cal beneficiaries can get the prescription drugs they need when they need them. For questions or comments related to Medi-Cal Rx, please email  

Blood Pressure Cuffs and Monitors
Effective June 1, Personal Use Blood Pressure Monitors and Blood Pressure Cuffs were added as a Medi-Cal Rx partial carve-out pharmacy benefit. These items are restricted to a proposed list of devices and cuffs, and were selected after careful review and stakeholder and provider input. Adding these items as a pharmacy-reimbursed benefit will improve access to care, and these benefits will continue to be available as durable medical equipment billed on a medical claim. The Medi-Cal Rx list of covered medical supplies product descriptions and billing information and the Medi-Cal Rx provider manual will be updated to reflect these additions. For questions or comments, please email

Medi-Cal COVID-19 Vaccination Incentive Program

DHCS allocated up to $350 million to incentivize COVID-19 vaccination efforts in the Medi-Cal managed care delivery system from September 1, 2021, through February 28, 2022. Medi-Cal managed care plans (MCPs) were eligible to earn incentive payments for activities designed to close vaccination gaps with their enrolled members, and to address vaccine uptake disparities for specific age and race/ethnicity groups. The third outcome ascertainment period for the program ended on March 6. Between January 3 and March 6, the total vaccination rates showed improvement in all reported measures. On March 6, target goals for all vaccine outcome measures increased to closing 100 percent of the gap between Medi-Cal and county rates, which was a challenge for plans to meet. Three beneficiary sub-groups (ages 12-25 years, African Americans, and American Indian/Alaska Natives) were within 5 percent of closing two-thirds of the gap. For the high performance pool measures, preliminary data demonstrate that eight MCPs achieved targets of at least one dose for members age 5-11 years, and two MCPs achieved targets for fully vaccinated and boosted members age 12 years and older. For more information, please refer to All Plan Letter (APL) 21-010Attachment A.

Last modified date: 6/7/2022 10:22 AM