SB 324 directs the Department of Health Care Services to implement an Enhanced Care Management (ECM) benefit under Medi‑Cal that addresses clinical and nonclinical needs on a whole‑person basis for designated target populations. The bill anchors ECM in Medi‑Cal managed care plans, requires plans to work with community providers and local entities, and tasks the department with monitoring, reporting, and issuing templates and guidance to support community provider participation.
The measure matters because it shifts a CalAIM care coordination model into managed care contracts statewide, explicitly prioritizes locally based nonprofit community providers, and creates data and subcontracting rules intended to expand participation by organizations that historically have not contracted with managed care plans. Compliance, procurement, and reporting teams at managed care plans, county health systems, and community providers will need to adjust contracts, workflows, and data collection to meet the statute’s new obligations.
At a Glance
What It Does
The bill requires DHCS to implement ECM as a Medi‑Cal benefit delivered through comprehensive risk contracts with Medi‑Cal managed care plans, and to design monitoring, reporting, and templates to increase contracting with community providers. It prohibits duplicative targeted case management while beneficiaries are enrolled in ECM.
Who It Affects
Medi‑Cal managed care plans, community‑based nonprofit providers and local public entities, county behavioral health systems, and specified Medi‑Cal populations identified under CalAIM (e.g., people experiencing homelessness, high utilizers, those with SMI/SED/SUD, youth with complex needs, and people transitioning from incarceration).
Why It Matters
This establishes contracting and transparency expectations that could reshape how social‑needs services are delivered within managed care — privileging local nonprofit providers, requiring member choice mechanics, and creating a public data stream on who receives ECM and which provider types deliver it.
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What This Bill Actually Does
SB 324 operationalizes the ECM component of CalAIM by directing DHCS to make an ECM benefit available to defined target populations enrolled in Medi‑Cal managed care plans. The bill ties ECM eligibility to the CalAIM Terms and Conditions and excludes beneficiaries who are currently served through certain 1915(c) waivers, specific demonstration programs, or fully integrated dual‑eligible programs.
It also makes ECM available to qualifying dual eligibles except where they are already served through fully integrated Medicare‑Medicaid models like FIDE‑SNPs or PACE.
The statute stages coverage by county based on whether counties previously ran Whole Person Care or Health Home programs. Managed care plans in those counties must cover existing pilot populations first and then expand to other target groups on statutorily specified dates; plans in other counties have a different rollout schedule.
The bill lists seven target populations that DHCS must use with its eligibility criteria, ranging from children with complex needs to individuals transitioning from incarceration.On provider relationships, the law requires managed care plans to contract directly or indirectly with community providers — defined as locally available, community‑based nonprofits with direct experience serving Medi‑Cal beneficiaries — and allows consideration of a provider’s availability and county experience. Plans may still contract with other nonprofit, for‑profit, or governmental providers, but must demonstrate any decision to keep ECM services in‑house and honor member preference by assigning members to a contracted community provider that refers the member if that provider can meet the member’s needs.To increase community provider participation, DHCS must develop standardized templates and guidance to help providers with limited contracting experience join plan networks and to allow primary subcontractors to administer supports to third‑tier subcontractors.
The department must also set biennial goals with plans to increase contracting and utilization of community providers and publish quarterly public reports on ECM utilization and demographics, disaggregated by county and provider type where statistically reliable. Finally, DHCS retains authority to grant presumptive authorization eligibility to categories of experienced ECM providers.
The Five Things You Need to Know
The bill identifies seven ECM target populations, including children with complex needs, people experiencing homelessness, high utilizers, those at risk for institutionalization, nursing facility residents transitioning to the community, individuals with SMI/SED/SUD, and people transitioning from incarceration.
DHCS must publish quarterly public reports on ECM utilization and populations served, disaggregated by county, age, sex, race, ethnicity, language, and by provider type (for‑profit, local government, community provider) when statistically reliable.
While a beneficiary is eligible for ECM through a managed care plan, the bill prohibits duplicative targeted case management services authorized in the Medi‑Cal State Plan.
Managed care plans must set goals every other year, in consultation with DHCS, to increase contracting and utilization of community providers and local entities; DHCS will use plan‑reported data to measure progress.
The statute requires DHCS to produce standardized templates and subcontracting guidance that permit community providers to act as primary subcontractors and to use third‑tier subcontractors for administrative support such as billing and coordination.
Section-by-Section Breakdown
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State duty to implement ECM under CalAIM
This section directs the Department of Health Care Services to implement an Enhanced Care Management benefit for whole‑person care of eligible Medi‑Cal managed care enrollees, consistent with the CalAIM Terms and Conditions. Practically, it establishes the department’s statutory obligation to turn the CalAIM ECM concept into an operational benefit, which triggers downstream contracting, eligibility determinations, and program design within managed care plans.
Eligibility, exclusions, and enrollment channel
Subdivision (b) ties ECM eligibility to the department’s application of CalAIM criteria and makes ECM available only to beneficiaries enrolled in comprehensive risk‑contract Medi‑Cal managed care plans. It lists explicit exclusions (certain 1915(c) waivers, the Family Mosaic Project, CCT/MFTP services) and carves out duals served by fully integrated Medicare‑Medicaid programs. This forces the mechanism through the managed‑care delivery system rather than fee‑for‑service or waiver streams.
County‑based rollout schedule
Subdivision (c) creates a staggered implementation. Plans in counties that previously ran Whole Person Care or Health Home programs must start covering prior pilot populations on earlier dates and then expand to all target populations by specified 2023 dates; plans in other counties follow a different phased schedule beginning mid‑2022 and extending into 2023. The result is a patchwork timeline keyed to historical program participation rather than a single statewide start date.
Defined target populations and duplication rule
Subdivision (d) lists seven target groups (children/youth with complex needs; people experiencing homelessness; high utilizers; those at risk of institutionalization; nursing facility residents seeking community transition; individuals with SMI/SED/SUD; and people transitioning from incarceration). Subdivision (e) then prevents beneficiaries from receiving duplicative targeted case management while enrolled in ECM, which requires plans and county systems to coordinate eligibility and benefits to avoid overlap.
Behavioral health collaboration and community provider contracting
Plans must consult and collaborate with Medi‑Cal behavioral health delivery systems when delivering ECM to beneficiaries with SMI/SED/SUD. Plans are required to contract directly or indirectly with community providers able to meet Medi‑Cal access and quality requirements; when keeping ECM in‑house, plans must justify that choice to the state. The statute also enshrines member preference by directing plans to assign a member to the contracted community provider who referred the member if that provider can meet needs.
Targets, monitoring, and public reporting
DHCS must require managed care plans to establish biennial goals to increase contracting and utilization of community providers, and it must develop a monitoring plan and reporting template. The department will publish quarterly public reports on ECM utilization, populations served, and demographic breakdowns, disaggregated by provider type where statistically reliable. These provisions create ongoing transparency obligations and a data basis for evaluating whether community providers are being integrated into managed‑care delivery.
Templates, subcontracting guidance, and definitions
DHCS must produce standardized templates to ease inclusion of community providers with limited prior plan contracting experience and issue guidance to permit primary subcontractors to support third‑tier subcontractors (administrative supports like billing and training). The bill defines 'community provider' as a locally available nonprofit with direct Medi‑Cal experience and 'local entity' to include county agencies and designated public hospitals. These mechanics are intended to lower administrative barriers for smaller, local organizations.
Presumptive authorization authority
The department retains authority to grant eligibility for presumptive authorization to categories of ECM providers with extensive experience serving particular ECM populations. That power enables DHCS to fast‑track certain trusted providers into the ECM delivery stream without full contracting delays, subject to the department’s discretion.
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Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Medi‑Cal beneficiaries in the enumerated target populations — They gain an ECM benefit designed to coordinate clinical and nonclinical services and prioritize community‑based support tailored to whole‑person needs.
- Local community providers (nonprofit organizations) — The bill creates explicit contracting pathways, standardized templates, and subcontracting rules intended to lower barriers for local nonprofits to join managed‑care networks and receive reimbursement for HRSN services.
- County behavioral health systems and public hospitals — The law requires collaboration and creates mechanisms for local entities to contract or subcontract, potentially enabling smoother transitions for clients with SMI/SED/SUD and for nursing facility residents moving back to the community.
Who Bears the Cost
- Medi‑Cal managed care plans — Plans must expand contracting, demonstrate community‑based service capacity if retaining in‑house models, track biennial goals, comply with reporting templates, and operationalize member preference/assignment rules.
- Community providers seeking to contract — Smaller nonprofits will face administrative and quality requirements to demonstrate capability, absorb onboarding work even with templates, and possibly handle third‑tier subcontracting arrangements.
- Department of Health Care Services — DHCS must build monitoring systems, publish quarterly disaggregated reports, develop templates and guidance, and evaluate plan goals, which will require staff time and analytic capacity.
Key Issues
The Core Tension
The central tension is between accelerating ECM access through managed‑care systems and preserving meaningful participation by local community providers: managed care gives plans operational control and scaling ability, but community providers bring local knowledge and trust; the bill asks plans to prioritize those local providers without giving DHCS robust enforcement tools or additional funding to build provider capacity, making success dependent on coordination rather than mandate.
The bill sets clear policy priorities but leaves several operational questions unresolved. First, the statute requires plans to contract with community providers and to set goals to increase community contracting, but it does not specify enforcement mechanisms or financial incentives if plans fail to meet those goals.
That gap creates a risk that goals become aspirational reporting items rather than drivers of procurement behavior. Second, the quarterly public reporting requirement demands disaggregation by many demographic fields and by provider type; smaller counties or low‑volume provider categories could generate statistically unreliable cells, forcing DHCS to adopt suppression rules or aggregate categories in ways that limit the transparency the statute seeks.
Third, the subcontracting rules lower one barrier but create new oversight challenges: permitting primary subcontractors to manage third‑tier subcontractors for billing and administration can help small providers join networks, but it also introduces chains of responsibility and payment flow risk — DHCS guidance will need to clarify liability, fiscal safeguards, and how disputes get resolved. Finally, the member preference and assignment rules require plans to accept referrals from contracted community providers; absent clear operational standards, plans and providers may disagree on what it means to 'appropriately meet the needs' of a member, producing delays and appeals that frustrate beneficiaries.
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