What Is Straight Medi-Cal and How Does It Work?

Straight Medi-Cal is the informal name for fee-for-service Medi-Cal, the traditional track in which the California Department of Health Care Services pays your doctors directly for each service instead of routing your care through a private managed care plan. Most Medi-Cal beneficiaries today are enrolled in managed care, but certain groups stay in fee-for-service, including people with a Share of Cost, people who also carry other health insurance, and people whose Medi-Cal covers only a limited set of services.

How the Fee-for-Service Model Works

Under straight Medi-Cal, there is no insurance company in the middle. Your doctor treats you, bills the state, and the state reimburses the doctor from a statewide rate schedule.¹ Each visit, test, and procedure produces its own claim, which the state’s billing system processes after confirming that the provider is enrolled in Medi-Cal and that the service meets program rules.

Managed care works differently. There, you enroll in a private health plan that receives a fixed monthly payment from the state and uses it to pay providers in its network. Straight Medi-Cal strips that layer out. Providers who participate agree to accept the state’s reimbursement as full payment, and you generally have more flexibility in where you receive care. The flip side is that you carry more of the responsibility for confirming that a given provider actually accepts fee-for-service Medi-Cal before you book an appointment.²

Who Is on Straight Medi-Cal

California has moved most beneficiaries into managed care through its CalAIM initiative. Qualifying for Medi-Cal does not place you in straight Medi-Cal by default; new enrollees are typically assigned to a managed care plan. You end up in fee-for-service only if your situation fits one of the categories the state leaves in that track.

Share of Cost beneficiaries. If your income is above the standard Medi-Cal limit but you qualify through the medically needy pathway, you receive fee-for-service coverage once you meet a monthly spending obligation.
People with other health insurance. If you have private or employer coverage alongside Medi-Cal, the state program acts as the secondary payer through fee-for-service. Your other plan pays first, and Medi-Cal picks up qualifying remaining costs such as copays, coinsurance, and deductibles.³
Limited or restricted scope beneficiaries. People eligible for only a narrow set of benefits, such as emergency and pregnancy-related services, generally stay in fee-for-service rather than enrolling in a managed care plan.
Presumptive eligibility recipients. Immediate temporary coverage, granted while a full Medi-Cal application is processed, runs through fee-for-service for up to 60 days.²
Foster youth. California law provides that no child in foster care can be required to enroll in a managed care plan. A foster child may enroll voluntarily only when the county child welfare agency, in consultation with the foster caregiver, determines that enrollment is in the child’s best interest.⁴
American Indian beneficiaries. Tribal members are enrolled in managed care but may opt out and remain in fee-for-service.
People in active treatment with a fee-for-service provider. If you are already in an active course of treatment with a fee-for-service provider, you can request a temporary medical exemption from mandatory managed care enrollment while that treatment continues.⁵

How Share of Cost Works

Share of Cost functions like a monthly deductible for people who qualify through the medically needy pathway. The state subtracts a maintenance need level, meant to cover basic living expenses, from your monthly income. The maintenance need level is currently $600 per month for an individual, and the difference is your Share of Cost.

If your monthly income is $1,800, for example, your Share of Cost is $1,200. Each month you must incur that amount in medical expenses before fee-for-service Medi-Cal begins covering the rest. Once you meet the obligation, full benefits kick in for the remainder of the month. The clock resets on the first of the next month.⁶

Because the maintenance need level is low, the obligation can be substantial for people with moderate income. A single emergency room visit or specialist appointment is often enough to meet the threshold in a given month.

What Straight Medi-Cal Covers

Fee-for-service Medi-Cal covers the same baseline benefits that federal Medicaid law requires every state to provide. The covered services are defined by California’s agreement with the federal government, and the Department of Health Care Services updates them to reflect changes in medical practice and federal rules.

Core Medical Benefits

Federal law requires every state Medicaid program to cover a mandatory set of services, which in Medi-Cal include:⁷

Inpatient and outpatient hospital care
Physician services, including specialists and surgery
Laboratory tests and imaging when medically necessary⁸
Emergency care at any hospital, regardless of network
Family planning services
Home health services
Nursing facility care
Early and periodic screening, diagnostic, and treatment services (EPSDT) for anyone under 21
Transportation to covered medical, dental, and mental health appointments⁹
Federally qualified health center and rural health clinic services
Medication-assisted treatment for opioid and substance use disorders

Dental

Medi-Cal dental care runs on its own track. In all but two California counties, dental services are delivered on a fee-for-service basis even when a beneficiary’s medical care is managed. For most straight Medi-Cal beneficiaries, that means dental care works the same way as medical care: find a dentist who accepts fee-for-service Medi-Cal and the state pays the dentist directly.¹⁰

Mental Health and Substance Use

Specialty mental health and substance use services are generally carved out of managed care plans and delivered through county mental health plans and the Drug Medi-Cal system. If you are on straight Medi-Cal, you reach specialty mental health care through your county rather than through the fee-for-service billing system. Mild-to-moderate mental health services may be available through your regular fee-for-service provider.

Prior Authorization

Some services under fee-for-service Medi-Cal require advance approval through a Treatment Authorization Request (TAR). Your provider submits the TAR to a Medi-Cal field office; you do not submit it yourself. All inpatient hospital stays require a TAR, and certain other procedures and services are subject to prior authorization under state and federal rules. If the state denies a TAR, your provider receives a written explanation with a specific reason.¹¹

Finding and Using a Provider

Straight Medi-Cal does not lock you into a plan network. You can see any doctor, specialist, or facility that is enrolled as a Medi-Cal fee-for-service provider and is accepting new patients, and you do not need a referral from a primary care doctor to see a specialist.

Confirm before each visit that the office takes fee-for-service Medi-Cal. Not every Medi-Cal provider participates in the fee-for-service track; some accept only managed care plans. The Department of Health Care Services maintains an online directory, but calling the office is the most reliable way to check that they are currently accepting fee-for-service patients.

Bring your Benefits Identification Card (BIC) to every visit. The office uses it to verify your eligibility through the state’s automated system, and if you have a Share of Cost, the provider can check whether you have already met your monthly obligation. Verifying eligibility at the point of care prevents billing problems later.

Billing Protection

Federal law bars Medi-Cal providers from charging you more than the Medi-Cal payment for covered services. Under the Medicaid provisions of the Social Security Act, a provider who participates in the program and furnishes a covered service cannot try to collect from you any amount beyond what the program allows.¹² If your provider accepts Medi-Cal for a service, they cannot send you a separate bill for the difference between their usual charge and what Medi-Cal paid.

The exceptions are narrow: a private written agreement in which you agree to pay more, or a service you were told in advance was not covered and agreed to pay for out of pocket. If a provider bills you for a covered service beyond any applicable copayment, you have the right to dispute the charge.

On copayments themselves, emergency services are exempt from all out-of-pocket charges, and for beneficiaries at or below 150 percent of the federal poverty level, prescription drug copays are limited to nominal amounts.¹³ Share of Cost is separate from copayments; it is the amount you must spend each month before coverage activates, not a per-visit charge.

Appealing a Denial

If Medi-Cal denies a service, reduces your benefits, or takes any action you disagree with, you can request a state fair hearing. Because you are not in a managed care plan, there is no plan-level internal appeal to go through first. You go directly to the state.

File your request within 90 days of receiving the Notice of Action that explains the denial or change. A good reason for missing that deadline, such as illness or disability, may let you file later.⁵

A protection called “aid paid pending” lets you keep receiving the disputed service while your hearing is processed. To qualify, you must request the hearing by the effective date on the Notice of Action, typically within 10 days of the date the notice was sent. Miss that window and the service can be cut off while you wait. You can also start by raising the complaint with your county welfare department before filing a formal request.⁵

A Note on Estate Recovery

Estate recovery is not unique to straight Medi-Cal, but it catches many beneficiaries off guard, so it is worth knowing about regardless of which track you are on. Federal law requires state Medicaid programs to seek repayment from the estates of beneficiaries who were 55 or older when they received certain services, including nursing facility care, home and community-based waiver services, and related hospital and prescription drug costs. States may also recover for other services provided to those individuals.¹⁴

Several protections limit when the state can collect. The state cannot recover from your estate if you are survived by a spouse, a child under 21, or a child of any age who is blind or disabled. The state may place a lien on your home while you are permanently in a nursing facility, but not if your spouse, a minor child, a blind or disabled child, or a sibling with an equity interest lives there, and the lien must be removed if you return home. States must also have procedures to waive recovery when collection would cause undue hardship. Estate recovery applies the same way to fee-for-service and managed care beneficiaries, so if you own a home or other assets, this is worth understanding before you enroll.

1
Department of Health Care Services. Medi-Cal Overview
2
Department of Health Care Services. Hospital Presumptive Eligibility Program
3
Medi-Cal Providers – CA.gov. Other Health Coverage
4
California Legislative Information. California Welfare and Institutions Code 14093.09
5
Department of Health Care Services. Medi-Cal Fair Hearing
6
Medi-Cal Providers – CA.gov. Share of Cost
7
Medicaid.gov. Mandatory and Optional Medicaid Benefits
8
Department of Health Care Services. Essential Health Benefits
9
Medicaid.gov. Assurance of Transportation
10
Department of Health Care Services. Medi-Cal Dental Fee-for-Service
11
Department of Health Care Services. Treatment Authorization Request
12
Office of the Law Revision Counsel. 42 USC 1396a – State Plans for Medical Assistance
13
Medicaid.gov. Cost Sharing
14
Medicaid.gov. Estate Recovery