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Governor Releases Budget Proposal for 2022-23

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On Jan. 10, the governor released his 2022-23 state budget proposal — a $286.4 billion budget plan that provides funding for immediate COVID-19 response and relief efforts for many Californians impacted by the pandemic.   

The state’s financial situation continues to be better than anticipated, and the budget projects the state will collect a $45.7 billion general fund surplus in the next year, of which $20.6 billion is discretionary. The budget once again dedicates billions to COVID-19 response, health care workforce investment, important Medi-Cal program augmentations, as well as proposals to address health care affordability as the state continues to consider the cost of health care. 

Of note are the proposals related to:  

  • Fighting COVID-19: The budget includes $2.7 billion to bolster COVID-19 testing, accelerate vaccination and booster efforts, support front-line workers, strengthen our health care systems, and battle misinformation. This fact sheet outlines the key components, including $614 million to support front-line workers and health care systems.  
    • The governor’s budget summary notes that the California Department of Public Health and the Emergency Medical Services Authority will continue to work with counties to review staffing needs and provide necessary resources. Hospitals are reminded to submit resource requests for any staffing they need to their Medical Health Operational Area Coordinator.  
  • Investments in the Care Economy Workforce: The budget includes $1.7 billion over three years to expand the state’s health and human services workforce. This includes training strategies to increase the state’s workforce of nurses, social workers, emergency medical technicians, behavioral health care providers, and community health care workers.  

Other highlights from the governor’s budget that are related to health care include:  

  • Expansion of Medi-Cal to All Income-Eligible Californians: The budget includes $820 million in state fiscal year 2023-24 — and $2.7 billion ongoing — to expand full-scope Medi-Cal coverage to beneficiaries ages 26-49, regardless of immigration status, starting no sooner than Jan. 1, 2024.  
  • New Medi-Cal Benefit for Behavioral Health: The budget includes $1.4 billion to support Medi-Cal Community-Based Mobile Crisis Services, related to mental health and substance use disorders. The new Medi-Cal benefit is expected to be implemented as soon as Jan. 1, 2023, and will target reducing the impact of untreated behavioral health conditions on emergency departments and psychiatric facilities.  
  • Medi-Cal Provider Equity Payments: The budget includes one-time $400 million funding for provider payments focused on advancing equity and improving quality in children’s prevention, maternity, and integrated behavioral health care.  
  • California Advancing and Innovating Medi-Cal (CalAIM): This budget launches CalAIM, a broad delivery system and payment reform initiative. It builds upon the successes of waiver demonstration programs such as Whole Person Care, the Coordinated Care Initiative, Health Homes, and public hospital system delivery transformation. CalAIM proposes to provide a wider array of services and support for patients with complex and high needs. The budget includes $2.8 billion to implement CalAIM initiatives effective Jan. 1, 2022.  
  • Office of Health Care Affordability: The budget plan includes the reappropriation of $30 million in funding to support the establishment of an Office of Health Care Affordability. The Office of Health Care Affordability will be housed within the Department of Health Care Access and Information (HCAI), which will also be responsible for the Health Care Payment Database.   
    • The office will be charged with increasing transparency on cost and quality, developing cost targets for the health care industry, enforcing compliance through financial penalties, and improving market oversight of transactions that may adversely impact market competition, prices, quality, access, and the total cost of care. In addition to lowering the rate of cost growth, the office will promote health care workforce stability and innovation, report on the quality of care and equity in services on the entire health care system, advance payment models that reward high-quality, cost-efficient care, and promote investments in primary care and behavioral health.
  • Community Benefit Requirements: The administration proposes to require non-profit hospitals demonstrate how they are making investments in local health efforts, specifically community-based organizations that address the social determinants of health. Additionally, the administration proposes statutory changes that direct that 25% of a non-profit hospital’s community benefit dollars go to these efforts, while giving HCAI enforcement authority over these requirements.