Community News

Amid Safety Net Cuts, CalOptima Commits Over 500M to Provider Rate Increases

by: Hannah Lew
Published: June 18, 2024


ORANGE...The CalOptima Health Board of Directors has approved an investment of $526.2 million to increase rates paid to hospitals, physicians, community clinics, behavioral health providers and ancillary services providers in Orange County. It is the largest provider rate increase of its kind in CalOptima Health’s nearly 30-year history. This investment is intended to support timely access to critical health care services for members and promote longer-term financial stability of the managed care network over a 30-month period from July 2024 to December 2026.  

This unprecedented provider rate increase comes at a much-needed time to counteract some of the financial uncertainty due to the California state budget deficit and its likely impact on health programs, including Medi-Cal. The complex nature of the ongoing budget negotiations underscores why CalOptima Health’s action to deliver a separate provider rate increase is so significant. Based on prior fiscal prudence and in accordance with its founding ordinance, CalOptima Health is using unallocated reserve funds to expand access and augment provider reimbursement.

CalOptima Health provides health insurance benefits to nearly one in three Orange County residents. It serves more than 928,000 low-income children, adults, seniors and people with disabilities through a managed care delivery model, including health network partners, hospitals, physician groups, community health centers, skilled nursing facilities, behavioral health providers and other ancillary service providers.

Together, these organizations are the health care safety net for Orange County.   “Historically, Medi-Cal reimbursement has been a barrier to access for patients and their families,” said Michael Hunn, CEO of CalOptima Health. “We ask a lot of our hospitals, doctors and others who provide life-saving care to our members. During the public health emergency, CalOptima Health supported providers with temporary, short-term supplemental payments. These new rate increases will help ensure member access, provider financial stability, network access and medical care for CalOptima Health members throughout Orange County over the next two and a half years.”

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