(a) Notwithstanding any law, and subject to subdivisions (e) and (f), in order to account for the impacts of the COVID-19 public health emergency on Medi-Cal managed care capitation rates, the department shall develop and pay capitation rates and capitation increments under any Medi-Cal managed care plan contract pursuant to this section.

(b) In consultation with affected Medi-Cal managed care plans, the department shall develop and implement a risk corridor that is symmetrical to risk and profit to limit the financial risk of either significant capitation rate overpayments or underpayments, pursuant to both of the following:

(1) The risk corridor shall apply to those capitation increments, services and populations, as determined by the department.

(2) The risk corridor shall apply from July 1, 2019, to December 31, 2020, inclusive. The department may continue to apply the risk corridor for rating periods starting on or after January 1, 2021, if the department determines that the continuation of the risk corridor is actuarially appropriate and necessary to account for the impacts of the COVID-19 public health emergency.

(c) To the extent the department determines appropriate, the department shall reduce applicable capitation rate increments by up to 1.5 percent pursuant to subsection (c)(3) of Section 438.7 of Title 42 of the Code of Federal Regulations for capitation rates associated with the July 1, 2019, to December 31, 2020 rating period. The department may apply this reduction to rating periods starting on or after January 1, 2021, if the department determines that the continued reduction is actuarially appropriate and necessary to account for the impacts of the COVID-19 public health emergency.

(d) The department shall evaluate the impact of the COVID-19 public health emergency on capitation rates it develops and pays under Medi-Cal managed care plan contracts, and shall make any adjustments it determines are necessary to ensure capitation rates are actuarially appropriate.

(e) (1) 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.

(2) The department shall seek any federal approvals it deems necessary to implement the adjustments described in this section, subject to subdivision (f). If federal approval is unavailable with respect to one or more of the adjustments described in this section, or if one or more of the adjustments is held to be invalid or unconstitutional by a decision of a court of competent jurisdiction, the department shall implement the remaining adjustments for which any necessary federal approvals are obtained.

(f) The department, in consultation with the Department of Finance, may modify the requirements of this section, or modify any application of this section with respect to certain capitation rate increments, certain Medi-Cal managed care enrollee categories and subcategories of aid, or certain categories or subcategories of medical assistance provided under a Medi-Cal managed care plan contract, if the department determines necessary to meet federal requirements, to obtain or maintain federal approval, or to maximize federal financial participation.

(g) 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 by means of all-county letters, plan letters, provider bulletins, or other similar instructions, without taking any further regulatory action.

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

(1) “COVID-19 public health emergency” means the Public Health Emergency declared by the federal Secretary of Health and Human Services on January 31, 2020 pursuant to Section 247d of Title 42 of the United States Code (entitled “Determination that a Public Health Emergency Exists Nationwide as the Result of the 2019 Novel Coronavirus”), and any subsequent renewal of such declaration.

(2) “Medi-Cal managed care plan” means any individual, organization, or entity that enters into a comprehensive risk contract with the department to provide covered full-scope health care services to enrolled Medi-Cal beneficiaries pursuant to Chapter 7 (commencing with Section 14000) or this chapter.

(Added by Stats. 2020, Ch. 12, Sec. 68. (AB 80) Effective June 29, 2020.)