CalNonprofits Co-Sponsors SB 324 to Support Locally-Based Nonprofits Serving Medi-Cal Members
CalNonprofits is proud to co-sponsor SB 324, authored by Senator Caroline Menjivar (SD-20), to strengthen participation of community-based nonprofits as Medi-Cal providers through adequate funding and red tape reductions.
California Advancing and Innovating Medi-Cal (CalAIM) is an ambitious, multi-year plan to transform California’s Medi-Cal program and make it integrate more seamlessly with other social services.
Currently under CalAIM, these vital nonprofit organizations are being pushed out by large for-profit companies due to such systemic barriers as:
- Low reimbursement rates that don’t reflect real operating costs
- Complex administrative requirements across different Medi-Cal Managed Care Plans (MMCOs)
- Limitations on subcontracting, making it hard for small, grassroots nonprofits to participate
- Lack of a formal seat at the table with the California Department of Health Care Services, leaving CBOs out of critical policy discussions
A full 70% of CalAIM funding is going to for-profits. SB 324 offers the urgent action needed to level the playing field and ensure that nonprofits – which have been doing this work for decades – can continue serving California’s most vulnerable populations.
We have joined in partnership with California Alliance of Child and Family Service Providers, Ceres Community Project, East Bay Innovations, El Sol Neighborhood Educational Center, Institute on Aging, and San Diego Wellness Collaborative in supporting this bill. These organizations comprise the steering committee of the newly launched CBO Medi-Cal Coalition, which was established to ensure the participation of community-based nonprofit organizations (CBOs) is sustainable as essential providers of Medi-Cal Members.
Three years into CalAIM, we are seeing many concerning trends, including:
- For-profit companies contract in 3.3 more counties and with 1.7x more plans than nonprofit providers
- $858 million in state funding will go to for-profits in 2025-26 vs $350 million to nonprofit community providers
- $142 million is flowing to out-of-state companies, instead of reinvesting in local communities
Senator Menjivar, Chair of the Senate Health Committee, shared her view of why SB 324, which is co-authored by Pro Tem McGuire, is so important:
“One vision of CalAIM was to foster stronger community connections for Medi-Cal enrollees with the highest health needs. We know that the trusted messengers from local community-based organizations are crucial to meet those needs yet they have been unable to contract with Medi-Cal managed care plans. Out-of-state organizations do not have the cultural understanding of what is needed in our Californian communities and should not be our preference to work with. SB 324 aims to build these connections so that experienced community providers can more easily work with our Medi-Cal plans to help enrollees get the housing, nutrition, and social supports they need to get healthy.”
We cannot let California’s safety net weaken. The success of CalAIM requires the participation of local CBO providers that deeply understand the clients and communities they serve. SB 324 ensures that locally-based nonprofits remain the most trusted, experienced providers to best serve Medi-Cal recipients with culturally-responsive care.
Read the bill fact sheet here.
