Cal. Welf. and Inst. Code § 14499.74
In determining the capitated rates to be paid to a fiscal intermediary during the first year of contracting under this article, the department shall utilize an acceptable actuarial process and historical data concerning Medi-Cal recipients in the geographical area which will, or is being, served by the fiscal intermediary. During the remaining years of the contract with the fiscal intermediary, the department shall utilize data concerning Medi-Cal expenditures for delivery of services based on the fee-for-service experience in comparable geographic areas. The capitated rates shall not exceed the total per capita amount (including the cost of adjustments to provide actuarial equivalence) which would be payable for all services and requirements covered under the fiscal intermediary contract adopted pursuant to this article if all those services and requirements were to be furnished to Medi-Cal beneficiaries under the fee-for-service Medi-Cal program provided for by Chapter 7 (commencing with Section 14000).
Ca. Welf. and Inst. Code § 14499.74