The California Assembly Health Committee meeting on July 1, 2025, focused on the ongoing efforts to modernize Medi-Cal, particularly through the proposed Senate Bill 324 (SB 324). The bill aims to enhance care management by ensuring that managed care plans contract with local community providers rather than for-profit entities from outside the state.

Key discussions highlighted the need for a holistic approach to healthcare that addresses not just immediate medical concerns but also the underlying issues affecting community members. The intent of SB 324 is to foster partnerships with local organizations that understand the specific needs of their communities, thereby improving trust and accessibility in healthcare services.

Currently, over 50% of contracts with managed care clients are held by for-profit entities, with a significant portion coming from out-of-state providers. This trend has raised concerns about the effectiveness of care delivery in local communities. SB 324 seeks to change this by requiring managed care plans to prioritize contracting with community-based organizations (CBOs) that have a physical presence and experience in providing necessary services.

The bill also proposes to streamline the contracting process for nonprofits, which often lack experience in dealing with managed care health plans. It calls for the Department of Health Care Services (DHCS) to issue guidance on how community providers can utilize intermediaries to assist with contracting and claims processes. Additionally, the DHCS will be tasked with publishing data on enhanced care management and community supports to ensure that plans are adequately engaging local providers.

The overarching goal of these initiatives is to uplift vulnerable populations by ensuring that healthcare services are delivered by those who are familiar with the community's unique challenges. The meeting concluded with a call for prioritizing local nonprofit organizations in the contracting process, emphasizing their critical role in effective healthcare delivery.