The Public Hospital Redesign and Incentives in Medi-Cal (PRIME) Program: Continuing California’s Delivery System Transformation

Authors: Lucy Pagel and Tanya Schwartz

Prepared with support from The California Endowment

January 2017 – The PRIME Program is a five-year initiative under the Medi-Cal 2020 section 1115 waiver that builds upon the Delivery System Reform Incentive Payment (DSRIP) program established under the Bridge to Reform waiver. The goal of PRIME is to continue significant improvement in the way care is delivered through California’s safety net hospital system to maximize health care value and to move toward alternative payment models (APMs), such as capitation and other risk-sharing arrangements. To implement PRIME, the Department of Health Care Services (DHCS) approved plans submitted by 17 Designated Public Hospitals (DPHs) and 37 District/Municipal Public Hospitals (DMPHs) to become PRIME entities. These PRIME entities may receive up to $3.7 billion in federal Medicaid funding over five years for achieving metrics in implementing clinical projects designed to change the way care is delivered.