SACRAMENTO (Oct. 21, 2026) — The California Hospital Association (CHA) has joined with dozens of hospitals in asking Gov. Gavin Newsom to make good on his commitment to behavioral health care by addressing a critical shortage of treatment capacity.
In a letter sent Oct. 20, hospitals urged the Newsom administration to allocate at least $275 million to support Medi-Cal inpatient psychiatric services.
California needs approximately 3,800 additional psychiatric beds to meet the behavioral health care needs of children and adults in crisis — the direct result of chronic underfunding, workforce shortages, and insufficient reimbursement rates. Most recently, emergency staffing ratio regulations on psychiatric hospitals added more than $275 million in costs and reduced psychiatric bed capacity by 15% in Kern, Contra Costa, Madera, and San Diego counties.
“Californians have suffered too long without the behavioral health support they need, and the problem is only getting worse,” said Kirsten Barlow, CHA Vice President, Policy. “Over the past eight years, Gov. Newsom has been a champion for improving access to treatment for Californians facing mental health disorders. They are in need again and the state must do all it can to make sure care is available for those in crisis.”
By enhancing reimbursement rates for Medi-Cal inpatient psychiatric services, hospitals can maintain bed capacity, support workforce recruitment and retention, and even expand capacity further. Specifically, the letter asks that the state fund this investment by protecting and implementing Behavioral Health Facility Throughput resources — established when voters in 2024 overwhelmingly approved the Prop 35 ballot measure to tax Managed Care Organizations to fund health care services.