​​​​​​​Quality Withhold and Incentive Program  

The California Department of Health Care Services (DHCS) has implemented a Quality Withhold and Incentive (QWI) program beginning in 2024. This program is necessary to improve quality of care received by Medi-Cal members. The program incentivizes Medi-Cal managed care plans (MCPs) to improve performance on quality metrics that align with the DHCS Comprehensive Quality Strategy (CQS) and Bold Goals​.

The program consists of two parts: a quality withhold and an incentive program. Withhold and incentive arrangements under MCP contracts are regulated by CFR section 438.6 (b)(2) and (b)(3) and follow all requirements of those sections.

This program will be evaluated on an annual basis and will be a renewed based on the outcomes of the program. The QWI program aligns with a value-based strategy. It incentivizes higher performance on key components of value, including clinical quality, member experience, and health equity.​

Quality Withhold

The quality withhold portion of the program incentivizes MCPs' performance on specific Managed Care Accountability Set (MCAS) and Consumer and Assessment of Health Providers and Systems (CAHPS) quality measures. A percentage of the final certified capitation rates are withheld from MCPs.

For calendar year (CY) 2024, the amount withheld from the final certified capitation rates for MCPs subject to the QWI program is calculated as 0.50% of the lower bound capitation rates (before add-ons) and excluding the maternity supplemental payment, for all rate cells for members with satisfactory immigration status and unsatisfactory immigration status. MCPs are able to earn back partial or full amount of the withheld dollars based on performance on measures. The scoring will be based on measurement year (MY) 2024 which aligns with the withhold rating period, which is CY 2024.

Below is the quality scoring methodology for the quality withhold portion of the program:

• MCPs may earn a maximum of 100 points with ten possible points for each of ten measures.
• A set point threshold is used for MCPs to earn the withhold dollars back. The withhold earned back will be calculated proportionally for MCPs scoring between 25 and 80 points. For CY 2024, the points threshold is 80 points.
• Plans scoring less than 25 points will earn back 0% of their withhold dollars.
• Any MCPs that are new to a county in CY 2024 where MCP-specific data does not currently exist within the External Quality Review Organization system will be excluded from the program for CY 2024. They will be included in the program for CY 2025 and will be subject to same withhold percentage as all other MCPs.
• Final scores for each quality measure will be the greater of the achievement or the improvement score using a specific points allocation methodology and can be found in the CY2024 CA Quality Component Methodology Letter.
• Achievement: points are earned by reaching set National Committee for Quality Assurance (NCQA) Healthcare Effectiveness Data and Information Set (HEDIS) national benchmark thresholds.
• Improvement: points are earned according to the MCP's magnitude of gap closure from the prior measurement year metric rate toward NCQA HEDIS 90th percentile benchmarks.

Quality Incentive

The quality incentive is designed to advance health equity by incentivizing MCPs to reduce racial and ethnic disparities wherever possible. Any withhold dollars not earned back by MCPs are used to fund the incentive portion of the program. All MCPs may earn incentive dollars regardless of their withhold performance. The scoring will be based on MY 2024 which aligns with the incentive rating period, which is CY 2024. Below is the quality scoring methodology for the incentive part of the program for CY 2024:

• ​Focuses on the child/adolescent well care visits measure (WCV), which is from the quality withhold, across all plan county/regions (which aligns with the CQS and Bold Goals):
• Ensure that race and ethnicity do not affect the quality of care received. MCPs are incentivized to improve rates for racial and ethnic subgroups, specifically by reviewing the rates for the lowest historically performing racial and ethnic groups for each plan/county. In some cases, the race and ethnicity subgroups  identified may be faced with issues that are not driven by racism but rather other barriers to care. These other barriers might include geography, socioeconomics, and other social drivers of health that influence health outcomes.
• MCPs earn points on their gap closure performance against a set percentile threshold (NCQA HEDIS 66.67th percentile) with no floor. See table below.​
  

​Payments are subject to the requirement of 42 CFR section 438.6(b)(2) that incentive payments not exceed five percent of the value of capitation payments attributable to the enrollees or services covered by the incentive arrangement.

​Resources

• ​CY2024 CA Quality Component Methodology Letter​​

Contact Us

For further inquiries, please email CRDDRates@dhcs.ca.gov.​​