(a) This section implements the state option in subsection (j) of Section 438.8 of Title 42 of the Code of Federal Regulations.

(b) Commencing July 1, 2019, a Medi-Cal managed care plan shall comply with a minimum 85 percent medical loss ratio (MLR) consistent with Section 438.8 of Title 42 of the Code of Federal Regulations. The ratio shall be calculated and reported for each MLR reporting year by the Medi-Cal managed care plan consistent with Section 438.8 of Title 42 of the Code of Federal Regulations.

(c) (1) Effective for contract rating periods commencing on or after July 1, 2023, a Medi-Cal managed care plan shall provide a remittance for an MLR reporting year if the ratio for that MLR reporting year does not meet the minimum MLR standard of 85 percent. The department shall determine the remittance amount on a plan-specific basis for each rating region of the plan and shall calculate the federal and nonfederal share amounts associated with each remittance.

(2) After the department returns the requisite federal share amounts associated with any remittance funds collected in any applicable fiscal year to the federal Centers for Medicare and Medicaid Services, the remaining amounts remitted by a Medi-Cal managed care plan pursuant to this section shall be transferred to the Medi-Cal Loan Repayment Program Special Fund for the purposes of the Medi-Cal Physicians and Dentists Loan Repayment Program as described in Section 14114.

(d) Except as otherwise required under this section, and until June 30, 2022, the requirements under this section do not apply to a health care service plan under a subcontract with a Medi-Cal managed care plan to provide covered health care services to Medi-Cal beneficiaries enrolled in the Medi-Cal managed care plan. This subdivision shall be inoperative on July 1, 2022.

(e) The department shall post on its internet website all of the following information:

(1) The aggregate MLR of all Medi-Cal managed care plans.

(2) The MLR of each Medi-Cal managed care plan, and, as applicable, the MLR of each subcontractor plan or other delegated entity, under contract with the Medi-Cal managed care plan, that is required to report an MLR pursuant to the CalAIM Terms and Conditions.

(3) Any required remittances owed by each Medi-Cal managed care plan, and, as applicable, any required remittances owed by each subcontractor plan or other delegated entity to that Medi-Cal managed care plan pursuant to the CalAIM Terms and Conditions.

(f) For purposes of this section, the following definitions apply:

(1) “Medical loss ratio (MLR) reporting year” shall have the same meaning as that term is defined in Section 438.8 of Title 42 of the Code of Federal Regulations.

(2) (A) “Medi-Cal managed care plan” means any individual, organization, or entity that enters into a contract with the department to provide services to enrolled Medi-Cal beneficiaries pursuant to any of the following:

(i) Article 2.7 (commencing with Section 14087.3).

(ii) Article 2.8 (commencing with Section 14087.5).

(iii) Article 2.81 (commencing with Section 14087.96).

(iv) Article 2.82 (commencing with Section 14087.98).

(v) Article 2.91 (commencing with Section 14089).

(vi) Article 1 (commencing with Section 14200) of Chapter 8.

(vii) Article 7 (commencing with Section 14490) of Chapter 8.

(B) For purposes of the remittance requirement described in subdivision (c), “Medi-Cal managed care plan” does not include dental managed care plans that contract with the department pursuant to this chapter or Chapter 8 (commencing with Section 14200). This subparagraph shall be inoperative on January 1, 2024.

(3) “CalAIM Terms and Conditions” shall have the same meaning as that term is defined in subdivision (c) of Section 14184.101.

(g) The department shall seek any federal approvals it deems necessary to implement this section. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.

(h) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of plan letters, plan or provider bulletins, or similar instructions, without taking any further regulatory action.

(Amended by Stats. 2022, Ch. 738, Sec. 18. (AB 204) Effective September 29, 2022.)