LAO Issues Overview Report on CalAIM Proposal

This week, the California Legislative Analyst’s Office (LAO) published a report providing an overview of the state’s California Advancing and Innovating Medi-Cal (CalAIM) proposal, a sweeping set of reforms to expand, transform, and streamline Medi-Cal service delivery and financing. This week’s report from the LAO is the first in a series addressing different components of the Newsom Administration’s proposal and details key changes from last year’s withdrawn proposal, analyzes overarching issues as part of the proposal, and provides key points for the Legislature’s consideration.

The LAO provides a high-level overview of the Medi-Cal program in California, including details on the various systems through which beneficiaries access services, and identifies key changes and clarifications the Administration has made in its new CalAIM proposal. One of the key changes identified by the LAO is the addition of a new In-Lieu of Service (ILOS) benefit for asthma remediation services, a benefit advocated for by CHEAC during the state’s CalAIM stakeholder process. The LAO discusses the state’s proposed CalAIM financing plan, determining the funding plan is substantially similar to last year’s proposal.

In assessing the Administration’s broader CalAIM proposal, the LAO finds the proposal could potentially reduce health disparities and improve service delivery among Medi-Cal beneficiaries and strengthen managed care plans’ capacities and incentives to coordinate care for patients. However, the LAO identifies a number of overarching outstanding questions with the Administration’s proposal, including whether managed care plans are well positioned for a significant expansion of responsibilities, whether new benefits would expand the supply of already limited services, and whether the CalAIM proposal would create new complexities. The LAO recommends the Legislature use its budget and policy processes to resolve key outstanding questions and provide legislative input. Additionally, the LAO recommends the Legislature explore potential delays in implementation, consider establishing a process for legislative oversight of implementation activities, and require a comprehensive and independent evaluation.

The full LAO report on the CalAIM overview is available here.