Medi‑Cal managed care plan medical loss ratio (MLR) and remittance handling
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State law amending Welfare & Institutions Code Section 14197.2 to specify MLR requirements for Medi‑Cal managed care plans, reporting and posting obligations, remittance obligations when MLR <85%, and disposition of remitted funds; affects Medi‑Cal managed care plans and applicable subcontractors and delegated entities.
Remitted amounts collected from Medi‑Cal managed care plans that do not meet the 85% MLR standard will be deposited in the General Fund instead of being transferred to the Medi‑Cal Loan Repayment Program Special Fund.
Effective for contract rating periods commencing on or after July 1, 2023, plans must provide a remittance for an MLR reporting year if the MLR is below 85% and the department will determine remittance amounts by plan and rating region.
Dental managed care plans are excluded from the remittance requirement for the purposes of subdivision (c) until January 1, 2024, when that exclusion becomes inoperative.
The department must post aggregate and plan‑specific MLRs, and required remittances, on its website.
MLR Compliance and Remittance Criteria
MLR compliance and remittance criteria
Operational criteria for Medi‑Cal managed care plans regarding MLR and remittance:
Standards and Key Values
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Reporting and Remittance Obligations for Plans
MLR reporting and remittance obligation
Medi‑Cal managed care plans must calculate and report an annual medical loss ratio (MLR) consistent with 42 CFR 438.8 and, for contract rating periods commencing on or after July 1, 2023, provide a remittance for any MLR reporting year in which the plan’s MLR is below the 85% minimum; the department will determine remittance amounts by plan and rating region and will calculate federal and nonfederal shares, returning federal shares to CMS.
- Maintain a minimum annual MLR of 85% calculated and reported per 42 CFR 438.8.
- If MLR < 85% for an MLR reporting year (for contract rating periods starting on or after July 1, 2023), provide a remittance as determined by the department by plan and rating region.
- The department will calculate federal and nonfederal share amounts associated with each remittance and return the requisite federal share amounts to CMS.
Defined Terms
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