Legal Authority and Requirements
Federal law and state policy allow Medi-Cal MCPs to delegate functions to Subcontractors or Downstream Subcontractors, including Hubs, provided the MCP maintains ultimate responsibility for the Hub's performance and compliance with applicable regulations, regardless of the layers of subcontracting. Required MCP duties and obligations for working with Subcontractors and Downstream Subcontractors are outlined in Section 3.1 of Exhibit A, Attachment III of the MCP Contract. Federal law requires contracts or written arrangements between an MCP and any Subcontractor or Downstream Subcontractor, including Hubs, to meet requirements set forth in the MCP Contract.
Requirements for contracting, oversight, and monitoring of subcontracted Hubs vary depending on the specific functions delegated and whether the subcontracted Hub assumes financial risk on behalf of the MCP.
Subcontracting Requirements for MCPs and Hubs
MCP requirements for Subcontractors and Downstream Subcontractors are outlined in the MCP Contract Exhibit A, Attachment III, Subsection 3.1 (Network Provider Agreements, Subcontractor Agreements, Downstream Subcontractor Agreements, and Contractor's Oversight Duties) and Exhibit J (Delegation Reporting and Compliance Plan) that must be submitted to DHCS. MCPs must complete Exhibit J for each Hub in each county in which they operate.
For any MCP obligation delegated to a Hub, whether directly or indirectly through additional layers of contracting or delegation, the Subcontractor Agreement or Downstream Subcontractor Agreement with the Hub must contain certain provisions, including, but not limited to:
- Specifying all delegated activities, obligations, and related reporting responsibilities.
- Including the Hub's agreement to perform the delegated activities, obligations, and reporting responsibilities in compliance with all applicable Medicaid laws and regulations, including sub regulatory guidance and contract provisions, and applicable state and federal laws.
- Providing for the revocation of the delegation of activities or obligations or specify other remedies where DHCS or the MCP determines the Hub is not performing satisfactorily.
In addition to the requirements outlined above, MCPs must ensure that Hubs adhere to all requirements outlined in the MCP Contract Exhibit A, Attachment III and
APL 23-006, or any superseding APL.
MCP-Hub Subcontracting Tools
Checklist for MCP-Hub Subcontracting Agreements
Subcontractor Agreements and Downstream Subcontractor Agreements with Hubs follow the same rules that apply to other MCP subcontracting relationships. As with any Subcontractor or Downstream Subcontractor, MCPs are required to report all contracted services with Hubs to DHCS. Subcontractor Agreement and Downstream Subcontractor Agreement templates must be submitted to DHCS for review and approval.
Instructions: Use the checklist below when developing a Subcontractor Agreement or Downstream Subcontractor Agreement with a Hub. Please note that this checklist is not exhaustive and that MCPs must still comply with all Subcontractor Agreement and Downstream Subcontractor Agreement requirements in the MCP Contract and other authorities.
Each Subcontractor Agreement and Downstream Subcontractor Agreement must:
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Clearly outline all delegated activities, responsibilities, and required reporting.
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Specify that the Subcontractor or Downstream Subcontractor is bound by the same obligations and requirements as the MCP per its contract with DHCS, as applicable.
- Include language ensuring the Subcontractor or Downstream Subcontractor complies with all applicable Medicaid laws and regulations.
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Provide a process for revoking delegation if the Subcontractor or Downstream Subcontractor fails to meet performance expectations.
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Include a Subcontractor's or Downstream Subcontractor's ownership and control disclosures per
APL 23-006 or any superseding APL.
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Specify the Subcontractor’s or Downstream Subcontractor’s required data reporting responsibilities to the MCP.
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Specify policies and procedures for resolving disagreements or disputes between the MCP and Hub.
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Describe corrective action and/or financial sanctions on Subcontractors or Downstream Subcontractors upon discovery of noncompliance with the terms of their agreement or any Medi-Cal requirements.
After the Subcontractor Agreement or Downstream Subcontractor Agreement is in place, MCPs must: -
Submit the template agreement to DHCS for review and approval.
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Meet with the Subcontractor or Downstream Subcontractor to review key policies and procedures.
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Clearly communicate how the MCP will monitor compliance with contract requirements.
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If the Subcontractor or Downstream Subcontractor is taking on financial risk, ensure there is a system in place to regularly assess and monitor financial viability.
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Ensure the Subcontractor or Downstream Subcontractor complies with nondiscrimination requirements under federal and state law.
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Monitor the quality and compliance of all shared data, including Encounter Data, Provider Network files, and required reports (e.g., quarterly submissions).
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Adhere to public records requirements, including transparency expectations for contracted entities.
- Report the delegation relationship in Exhibit J of the MCP Contract.
- Post the delegation model publicly on the MCP’s website, as required.
Assessment Tool: MCP Pre-Subcontracting Considerations
The following series of questions outline considerations for MCPs for assessing and operationalizing partnerships with Hub organizations.
Contracting Considerations
- What type of organization is the Hub (MSO/ASO, IPA, Medical Group, nonprofit, County health department, etc.)?
- Is the Hub an organization that would take on risk of administering aspects of the covered benefit or service on behalf of the MCP?
- What are the demonstrated capabilities of the Hub? Does the Hub have the administrative capacity, experience, and budgetary resources to fulfill delegated contractual obligations (e.g., credentialing and/or payment processing)?
- What functions will be delegated to the Hub and which will be retained by the MCP?
- Does the Hub have existing contracts and/or BAAs with other MCPs and Providers for the delivery of Medi-Cal services, such as ECM, Community Supports, CHW and/or Doula services?
- Does the Hub have a clear organizational structure with defined leadership roles and decision-making processes?
- What is the Hub's staffing model and capacity to provide Medi-Cal services?
- Will the Hub agree to Compliance Audits by the MCP?
- Does the Hub have a designated Compliance Officer?
Operations & Services
- What administrative functions does the Hub offer (e.g., centralized contracting, referral management, reporting, etc.)?
- What direct services does the Hub offer (if any)? If so, which populations do they serve?
- Does the Hub have standardized policies and procedures and workflows?
- What is the Hub's process for handling Network Provider and Medi-Cal Member complaints?
Network Management
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What is the capacity of the Hub to address health-related social needs (HRSNs) via its Network?
- If the Hub is delegated to conduct credentialling on behalf of the MCP, what credentialing process does the Hub have in place to ensure quality across its Network?
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How does the Hub assess and onboard new Providers to its Network?
- What process does the Hub have in place to support small, diverse, and/or locally owned Network Providers to contract more easily with MCPs?
- What training and technical assistance does the Hub offer to its Network
- How does the Hub ensure its Network reflects the populations of the communities and county or counties it serves?
- How does the Hub monitor Network Provider performance/address underperformance or noncompliance?
How does the Hub monitor Network Provider performance/address underperformance or noncompliance?
Data Management
- What data sharing capabilities does the Hub have (e.g., integrated Electronic Health Record, case management platform, etc.)?
- What systems does the Hub have in place for closed-loop referral management and reporting to MCPs?
- Can the Hub integrate its technology and exchange data with the MCP's existing data systems?
- How does the Hub monitor data quality, security, transparency, and compliance?
Financial Models & Sustainability
- What payment models does the Hub utilize to pay Network Providers?
- How does the Hub support capacity building for Network Providers?
- How does the Hub's payment model support the financial sustainability of Network Providers?
Community Engagement
- How does the Hub engage and support community members?
- Does the Hub have a process for incorporating Medi-Cal Member and community feedback into its operations?
- What relationships does the Hub maintain with other health care agencies; local governmental entities, such as county behavioral health or local health jurisdictions; and other community partners?
Section 4: Considerations for ECM, Community Supports, Community Health Worker (CHW), and Doula Services
MCPs are permitted to contract with Hubs to administer Enhanced Care Management (ECM), Community Supports, and CHW and/or Doula benefits. For all programs, MCPs contracting with Hubs to deliver these services must ensure Hubs adhere to all requirements set forth in the MCP Contract, respective program requirements, and related APL guidance.
Enhanced Care Management (ECM) is a whole-person, interdisciplinary approach to care that addresses the clinical and non-clinical needs of high-cost and/or high-need eligible Medi-Cal Members who meet ECM Populations of Focus (POF) eligibility criteria through a systematic coordination of services and comprehensive care management that is community-based, interdisciplinary, high-touch, and person-centered. For more information, see the MCP Contract and the
ECM Policy Guide.
Community Supports are substitute services or settings to those required under the California Medicaid State Plan that Medi-Cal MCPs may select and offer to their Members when the substitute service or setting is medically appropriate and more cost-effective than the service or setting listed in the California Medicaid State Plan, such as emergency department visits, hospital or skilled nursing facility admission, or a discharge delay. Community Supports are optional services that MCPs may choose to offer to eligible Medi-Cal Members, with the exception of Transitional Rent, which MCPs will be required to provide starting January 1, 2026. A complete list of DHCS-approved Community Supports can be found in the MCP Contract,
Community Supports Policy Guide Volume 1, and
Community Supports Policy Guide Volume 2.
CHW
Services
are an integral part of ECM and Community Supports that consist of an array of preventative health services aimed at preventing or managing disease, disability, and other health conditions and promoting physical and behavioral health and well-being for Medi-Cal Members. CHWs may include service professionals known by a variety of job titles, including promotoras, community health representatives, navigators, and other non-licensed public health workers, including violence prevention professionals, and as set forth in
APL 24-006 or any superseding APL. See the
DHCS website and the MCP Contract for more information about CHW services.
Doula Services provide health education advocacy, and physical, emotional and nonmedical support to Medi-Cal Members and their families throughout pregnancy, labor, birth and the postpartum period, including support for and after miscarriage and abortion. See the DHCS
DHCS website,
APL 23-024 or any superseding APL, and the MCP Contract for more information about the Doula benefit.
Considerations for ECM
MCPs that contract with Hubs for partial or full administration of ECM services must ensure Hubs adhere to all relevant program requirements for which they are contracted. Regardless of the presence of a contracted Hub, the MCP remains responsible for ensuring that ECM Providers address the clinical and non-clinical needs of Medi-Cal Members and provide all core service components. MCPs may contract with Hubs to provide:
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Outreach and engagement to eligible Medi-Cal Members.
- Comprehensive assessment and care management plans.
- Enhanced coordination of care.
- Health promotion.
- Comprehensive transitional care.
- Medi-Cal Member and family supports.
- Coordination and referral to community and social support services.
In addition to providing one or more of these core components, the contracted Hub may coordinate with the MCP to identify and offer ECM to the MCP’s Medi-Cal Members who meet the Populations of Focus (POF) criteria and ensure compliance with the ECM Provider Standard Terms and Conditions (STCs), the MCP‘s ECM Model of Care (MOC), and ECM Encounter Data reporting requirements.
Some ECM Providers may not have a dedicated state-level enrollment pathway. These Providers must be vetted by the MCP in order to participate as ECM Providers. ECM Providers serving the Individuals Transitioning from Incarceration POF are the only ECM Providers subject to additional Provider requirements.
MCPs that contract with Hubs for administration of ECM must update their MOC to describe the contracting arrangement. MCPs must ensure that the contracts reflect:
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MCP Contract requirements.
- Requirements outlined in the ECM and Community Supports Contract Template.
- ECM and Community Supports Provider Standard Terms and Conditions (STCs).
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APL 23-032 or any superseding APL, as applicable.
MCPs should collaborate with contracted Hubs on the approach to administering ECM benefits to ensure consistent, high-quality care for Medi-Cal Members, tailored to individualized care needs.
See the
ECM Policy Guide for additional information. See Module 3 for more information on compliance for contracted Hubs that assume risk or cover populations for specific Medi-Cal Members.
Considerations for Community Supports
MCPs that contract with Hubs for partial or full administration of Community Supports services must ensure contracted Hubs adhere to all relevant program requirements for which they are contracted. Core service components include:
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All program and reporting requirements specified by DHCS, applicable state and federal laws and regulations, the MCP Contract, and APL requirements, including appeal rights.
- Reporting requirements for all Community Supports encounters.
All MCPs are encouraged, but not required, to offer Community Supports to eligible Medi-Cal Members, with the exception of Transitional Rent, which is mandatory for MCPs to offer beginning January 1, 2026, for specific POF. Contracted Hubs interested in partnering with MCPs to administer Community Supports should coordinate with the MCP to confirm which Community Supports are offered by the MCP.
MCPs that contract with Hubs for administration of Community Supports must update their MOC to describe the contracting arrangement. MCPs must ensure that the contracts reflect:
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MCP Contract requirements.
- Requirements outlined in the ECM and Community Supports Contract Template.
- ECM and Community Supports Provider STCs.
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APL 21-017 or any superseding APL, as applicable.
MCPs should collaborate with contracted Hubs on the approach to administering Community Supports benefits to ensure consistent, high-quality care for Medi-Cal Members, tailored to individualized care needs.
Considerations for CHW Services
MCPs that contract with Hubs for the administration and/or delivery of CHW benefits must adhere to requirements set forth in
APL 24-006 or any superseding APL, as well as the Medi-Cal Provider Manual and MCP Contract, as applicable, including with respect to:
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CHW Provider Requirements and Qualifications. Supervising Providers must ensure that CHWs meet the requirements and qualifications outlined in Medi-Cal policy and
APL 24-006, or any superseding APL. MCPs must ensure that Supervising Providers, or their Subcontractors or Downstream Subcontractors contracting with or employing CHWs to provide covered CHW services to Medi-Cal Members, verify that CHWs have adequate supervision and training. MCPs must also have a process for verifying qualifications and experience of Supervising Providers. MCPs must develop and submit policies and procedures to ensure that CHW Supervising Providers are certifying that their CHWs have the appropriate training, qualifications, and supervision.
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Medi-Cal Member Eligibility Criteria for CHW Services. MCPs must ensure that Supervising Providers comply with eligibility requirements for the provision of CHW services, including those related to facilitating data driven approaches to determine and understand priority populations eligible for CHW services.
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Provider Enrollment. Network Providers, including those operating as Supervising Providers of CHW services, are required to enroll as Medi-Cal Providers consistent with the MCP Contract and
APL 22-013 or any superseding APL.
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Access to CHW Services. MCPs are responsible for ensuring that contracted Hubs promote access to and monitor sufficient Networks within their service areas for CHW services.
Considerations for Doula Services
For the administration and/or delivery of Doula services, MCPs that contract with Hubs must adhere to the requirements outlined in
APL 23-024 or any superseding APL as well as the Medi-Cal Provider Manual and the MCP Contract, as applicable, including:
- Doula Provider Requirements and Qualifications. MCPs must provide Doulas with initial and ongoing training and resources regarding relevant MCP services and processes, including any available services through the MCP for prenatal, perinatal, and postpartum Members. In addition, MCPs are required to provide technical support in the administration of Doula services, ensuring accountability for all service requirements contained in the MCP Contract, and any associated guidance issued by DHCS.
- Medi-Cal Member Eligibility Criteria for Doula Services. MCPs must ensure that contracted Hubs comply with eligibility requirements for the provision of Doula services to Medi-Cal Members.
- Provider Enrollment. Network Providers who operate as Providers of Doula services are required to enroll as Medi-Cal Providers consistent with APL 22-013, or any superseding APL.
- Access to Doula Services. MCPs must ensure that contracted Hubs promote access to Doula care and help monitor the Networks to ensure there are a sufficient number of Doulas to meet the needs of their Members. Meeting Network adequacy requirements is the responsibility of the MCP.
Section 5: References and Additional Resources
Key References
Additonal Resources
Subcontractor Types and Definitions
Administrative Subcontractor
| A Subcontractor that contractually assumes administrative obligations of the MCP under the MCP Contract. Administrative obligations include functions such as Credentialing verification or claims processing. However, functions related to coordinating or directly delivering health care services to Medi-Cal Members, such as Care Coordination are not administrative functions. |
Partially Delegated Subcontractor
| A Subconractor that contractually assumes some, but not all, duties and obligations of the MCP under the MCP contract, including, for example, obligations regarding specific Medi-Cal Member populations or obligations regarding a specific set of services. Individual physician associations and medical groups often operate as Partially Delegated Subcontractors.
|
Fully Delegated Subcontractor
| A Subcontractor that contractually assumes all duties and obligations of the MCP under the MCP Contract, except those contractual duties and obligations where delegation is legally or contractually prohibited. A managed care plan can operate as a Fully Delegated Subcontractor.
Note: A hub would not take on this role.
|
Downstream Administrative Subcontractor
| A Downstream Subcontractor that contractually assumes administrative obligations of a Subcontractor under the MCP Contract. Administrative obligations include functions such as credentialing verification or claims processing. However, functions felated to coodinating or directly delivering health care services for Medi-Cal Members, such as Utilization Management (UM) or Care Coordination, are not administrative functions.
|
Downstream Partially Delegated Subcontractor
| A Downstream Subcontractor that contractually assumes some, but not all, duties and obligations of a Subcontractor under the MCP Contract, including, for example, obligations regarding specific Medi-Cal Member populations or obligations regarding a specific set of services. Individual physician associations and medical groups often operate as Downstream Partially Delegated Subcontractors.
|
Downstream Fully Delgated Subcontractor
| A Downstream Subcontractor that contractually assumes all dutues and obligations of the MCP under the MCP Contract, through the Subcontractor, except for those contractual duties and obligations where delegation is legally or contractually prohibited. A managed care plan can operate as a Downstream Fuly Delegated Subcontractor.
Note: A Hub would not take on this role. |