How to Make Medicaid Transformation Equitable: The Wisdom of Experience

Medicaid is beginning an important transformation to address health-related social needs through a fusion of new benefits and optional policy tools to fund additional services. But in truth, there is nothing optional or additional about this change. It is essential. I know firsthand.

I was in utero when my mother was engulfed by the crack epidemic in South Central Los Angeles. My grandmother, a retired LAUSD teacher and a rock of a Black woman, set about raising my older siblings and me while concurrently trying to save her own daughter’s life. We lived on a fixed income. Food was a luxury—not just healthy meals, but any food at all. We qualified for Medicaid (Medi-Cal in California) but not food stamps. Once my mother managed to recover, she was diagnosed with end-stage renal failure and needed regular dialysis. I also was sick often as a child, suffering from anemia, gastrointestinal problems, and a benign tumor, and undergoing surgeries. Being Medicaid beneficiaries was literally lifesaving for us. But without reliable food to eat, how could my mother or I heal or truly sustain our health?

California is now pioneering partnerships between Medicaid managed care organizations (MCOs) and community-based organizations (CBOs) to provide the kinds of services that would have transformed my family’s well-being those three decades ago, through two new reimbursement streams called Enhanced Care Management (ECM) and Community Supports (CS). These new avenues are part of the California Advancing and Innovating Medi-Cal (CalAIM) initiative, also known as Medi-Cal Transformation, which launched in 2021 to improve health outcomes and equity by integrating health and social care for the state’s most marginalized communities—communities with whom I am closely connected.

Two years into this journey, California can serve as a model for Medicaid transformation across the country—and that includes lessons on both successes and solutions to core challenges. As a Senior Program Manager with HealthBegins supporting CalAIM stakeholders, I have seen both. And from this vantage point, I want to share lessons that can make Medicaid transformation efforts across states not only inspirational but effective and equitable.

What’s crystal clear from both my professional and lived experience is that CBOs are critically important to providing whole-person care. They are providers in the full sense of the word, and they bring expertise, impact, and a connection to underserved communities that healthcare institutions typically cannot attain on their own. In my community in South Central LA as a child, we had exactly one CBO, the local YMCA, and we dearly needed more. Now I work with courageous CBO leaders as a facilitator for the PATH CPI Collaboratives— workgroups established to convene CalAIM stakeholders and identify and uplift both challenges and solutions.

Yet the challenges these CBOs have faced in the early stages of CalAIM show that such efforts run a high risk of leaving out and leaving behind the small, local CBOs that know their communities best. As clinical-community partnerships grow, they often strain the very CBOs that they depend on. Even well-meaning policymakers and healthcare partners may end up structuring partnerships in ways that CBOs cannot sustain.

Fortunately, Medi-Cal Transformation in California has given us the opportunity to identify these challenges on the front lines. My journey within CalAIM offers insights that extend beyond California’s borders—an invitation for other states to leverage our lessons as a guiding light of sorts. Our work isn’t just about empowering ECM and CS providers; it’s a testament to what successful Medicaid transformation can achieve. In CalAIM’s first year, social-service providers touched the lives of more than 100,000 members, a remarkable stride towards equity.

I’m honored to share the following seven lessons to help set up partnerships to thrive around the country—with gratitude and admiration to the California healthcare and CBO leaders who are doing the hard, pioneering work to bring them to light.

  1. Make equity among social-service providers, not only beneficiaries, a central focus from the start. Small, local CBOs are deeply rooted in communities and, through that connection, can provide valuable social services to some of the hardest-to-reach communities. Yet they often operate on grants with only a handful of employees and don’t have the institutional knowledge to navigate a Medicaid contract. Larger interstate nonprofits, in contrast, already have established relationships with MCOs and entire teams dedicated to Medicaid contracting. Because of this, small providers can end up shut out, priced out, or burned out of Medicaid transformation. To remedy this, states should build equitable relationships with providers of all sizes, even before contracting begins.
  2. Support CBOs with the technical complexity of Medicaid contracting. For small providers, even the language of Medicaid contracting may be unfamiliar. They need support to navigate the complex contracting process and identify and address challenges as they arise—which is what California contracted HealthBegins to do. We found it helpful to tailor support by dividing our curriculum into two pathways: one lower-touch route for providers that only needed support with certain details, and one higher-touch route for providers starting from square one.
  3. Support CBOs to project their ROI and negotiate equitably. Small providers need support to estimate their likely costs and revenue—and a realistic sense of how many referrals they are likely to get—to build sustainable programs. States and MCOs should strive to furnish gap-filling plans that include projections of demand (how many beneficiaries are likely to need which services) and supply (how many providers are positioned to provide them) for each region. Some providers in California were surprised by Medi-Cal’s staffing and systems requirements and ended up operating at a loss once those costs materialized. Others counted themselves out of CalAIM before applying because the rate guidance (which they didn’t realize was negotiable) looked too low. Offering a platform for fair rate negotiations (including support for providers to calculate ROI) ensures that providers can secure sustainable rates and achieve program longevity.
  4. Streamline and standardize administrative processes to allow providers to focus on serving members. Some California providers have termed this challenge “the triple redundancy”—referrals, authorizations, and claims—which add up to a hefty administrative burden that can stretch small providers thin and leave some spending more time on tasks than services. The challenge also includes contracting, as the initial rollout of CalAIM had each MCO creating its own contract for providers. California is now working to build standardizations so that providers can focus on doing what they do best: serving clients. Part of the solution is to establish one uniform contract for the entire state. Another innovative model being explored is the San Joaquin Pathways Community Hub, where the San Joaquin Community Foundation is setting up systems to coordinate care for multiple providers in its region.
  5. Provide seed money, not only direct reimbursement for services. If contracts reimburse only for services (not planning, staffing, administration, or overhead), providers may have to use their own grant money for new systems, new hires, and up-front investments—which further disadvantages small CBOs. Recognizing this gap, California created PATH (Providing Access and Transforming Health), a program to support infrastructure and capacity building for social-service and health plan partners. This seed money is crucial to kickstart programs and promote their sustainability, and makes it easier for states to attract both providers and beneficiaries to the initiative. 
  6. Build a referrals network to ensure that beneficiaries use providers’ services. As CalAIM has moved from contracting to implementation, some providers are struggling to sustain the work, operating in the negative as the referrals they anticipated do not materialize. In addition to helping MCOs build equitable relationships with providers, states would do well to build a platform for providers to build relationships with each other before programs launch. That way, a housing provider with a client experiencing food insecurity can refer them to a CBO providing medically tailored meals, and vice versa. This effort must include unconventional outreach methods to drive consumer engagement. I can’t express enough that engaging underserved communities demands innovative outreach methods. Partnering with trusted community voices, such as community centers, schools, or YMCAs, to expand awareness of social services now available through Medicaid is a starting point (but not an endpoint). 
  7. Position provider expertise as a critical resource. Medicaid transformation progress hinges on our ability to meet a wide array of social-service organizations where they are, and to do that we must harness the wisdom of seasoned providers. Experienced social-service providers—intimately familiar with the complexities of contracting and successful program delivery—bring an unmatched depth of expertise. They’re also crucial to our ability to continually broaden the provider network and make more essential services available to people who need them. One crucial lesson I’ve embraced is the importance of leading from behind to value each partner’s unique perspective and foster an atmosphere where collective wisdom propels our mission forward. Most importantly, it serves to ensure that no one is left behind.

The social services that CalAIM providers are bringing to Medicaid beneficiaries would have also made a world of difference to me in my twenties, when I was diagnosed with aggressive, life-threatening breast cancer. I was just shy of my 25th birthday. My husband and I had a young son. And I was pregnant with our daughter. Going through chemotherapy and surgery, I couldn’t work, so we couldn’t keep up with rent. We were almost evicted twice. We communicated our situation to our landlords, who didn’t care. We avoided losing our home only by personally going out to find grants, even while sick. Medi-Cal provided our medical insurance, but there was no one to provide the stable housing that’s so crucial to health and healing.

When I think about what CalAIM is creating, I can’t help but think about my own experience. I think about a person with complex needs who now has healthy meals. I think about a person going through cancer who now has transitional housing. These services save lives. When I share my own experiences with colleagues, they’re captivated—and we need to bring that same passion and fervor, and that same connection to the people Medicaid serves, into every conversation about this work.

Medi-Cal Transformation shows us that change is possible when we harness the power of lived experience to inspire a better future for all. Our journey is just beginning, but every lesson learned is a step closer to a more inclusive future. As I often say, CalAIM is on fire, ready to illuminate the path toward equitable and accessible health and social care for all.

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Alexis Taylor is the Senior Program Manager at HealthBegins