Jul, 28, 2022

California’s Department of Health Care Services Centers Health Equity in its Statewide Medicaid Managed Care Procurement

Erin Taylor, Mary Beth Dyer, and Erin Campbell, Bailit Health

State Health and Value Strategies (SHVS) continues to update the Medicaid Managed Care Contract Language: Health Disparities and Health Equity resource to provide Medicaid agencies with examples of how different states are leveraging their managed care programs to promote health equity and address health disparities. Increasingly, leading states are integrating these types of equity requirements into their entire Medicaid managed care (MMC) procurement and contracting processes.

This latest version of Medicaid Managed Care Contract Language: Health Disparities and Health Equity incorporates new details from California’s Department of Health Care Services (DHCS) MMC procurement and sample contract provisions released in February 2022. California’s Medi-Cal program covers over 14 million enrollees and has increasingly focused on improving whole-person care. DHCS established in this procurement a managed care plan goal of “increased health equity and reduced health disparities” and then tied this goal to the procurement’s qualification requirements, evaluation criteria, and sample contract terms and requirements.

DHCS incorporates into the procurement definitions of health equity-related terms. One notable difference in California’s definition of health disparity is the explicit mention of differences in mental health. Other noteworthy health equity and health disparities requirements in the Medi-Cal sample contract require health plans to:

  • Maintain a full-time chief equity officer whose responsibilities include ensuring all contractor policy and procedures promote health equity; engaging and collaborating internally and externally with subcontractors, network providers and entities, and Medi-Cal members in health equity efforts and initiatives; implementing, monitoring, and evaluating strategies and interventions designed to identify and address root causes of health inequities; and providing annual diversity, equity and inclusion training internally and externally.
  • Implement a robust Quality Improvement and Health Equity Transformation Program, including a Quality Improvement and Health Equity Committee with responsibilities for developing policies and procedures to analyze variations in quality of care; developing interventions that promote health equity to address the underlying causes of disparities; and meeting to-be-defined state disparity reduction targets for specific populations or measures.
  • By January 2026, obtain and maintain full National Committee for Quality Assurance (NCQA) Health Plan Accreditation and NCQA Health Equity Accreditation.


In addition, the compendium’s new Appendix A includes 14 questions on which Medi-Cal bidders will be evaluated related to addressing health equity and/or reducing disparities.

SHVS will continue to monitor MMC programs for innovative approaches related to improving equity and addressing health disparities. In addition, SHVS is developing a new compendium focused on how states are advancing social determinants of health (SDOH) through MMC programs. More on the California DHCS’ 2022 MMC procurement and related SDOH requirements will be included in this upcoming publication.