About Finance & Reimbursement
Vulnerable Californians who rely on the care provided by California hospitals are at risk. Driven by skyrocketing costs for labor, pharmaceuticals, regulatory mandates, and more, 53% of all hospitals statewide lose money every day to deliver patient care.
That isn’t sustainable. And California is already seeing the frightening result: rural health care services being cut to the bone, severe behavioral health care needs not being met, and more.
Download Private Hospital-Directed Payment Encounter Files by Feb. 5
What’s happening: On Dec. 26, the Department of Health Care Services (DHCS) uploaded three new hospital-directed payment encounter files, available via the Secure File Transfer Protocol (SFTP) site. The SFTP site is not intended for long-term storage, so files will be deleted Feb. 5.
2026-27 State Budget to be Released Tomorrow
What’s happening: Governor Gavin Newsom will release his proposed budget for 2026-27 tomorrow, kicking off the state budget process and legislative budget hearings that will continue until the budget is finalized this summer.
CMS Awards California $234M in Rural Transformation Grant Funding
What’s happening: On Dec. 29, the Centers for Medicare & Medicaid Services (CMS) released the much-anticipated Rural Health Transformation Program (RHTP) award announcements. While all 50 states were awarded RHTP funds, California earned an award of $233.6 million in the first year, the third-highest dollar amount award of any state.
Impact Analyses Available for OPPS and Home Health Final Rules
What’s happening: DataSuite has issued two hospital-specific analyses of calendar year (CY) 2026 final rules on the outpatient prospective payment system (OPPS) and Medicare home health. The OPPS analysis is intended to show providers how Medicare outpatient fee-for-service payments will change from CY 2025 to 2026. The home health analysis is intended to show home health agencies how Medicare fee-for-service payments may change from CY 2025 to CY 2026.
Federal Court Halts Implementation of 340B Rebate Pilot Program
What’s happening: On Dec. 29, 2025, the U.S. District Court of Maine blocked implementation of the federal Department of Health and Human Services (HHS) 340B Rebate Model Pilot Program from going into effect nationwide on January 1, 2026, pending further orders from the court.
DHCS Granted 60-Day Extension to Revise Hospital Fee Program 9 Application
What’s happening: The Department of Health Care Services (DHCS) has until March 13 to submit a revised 2025 Hospital Quality Assurance Fee Program application to the Centers for Medicare & Medicaid Services (CMS), following questions CMS raised about the program’s size.
Positive News and Looming Threats from the Nation’s Capital
Federal lawmakers are back in Washington, D.C., this week with just over three weeks left to finish funding the government before current spending laws run out on Jan. 30.
Issue Brief: Time Is Running Short to Save Hospitals, Preserve Access to Health Care
Medicare and Medi-Cal underfunding have put the health care system on the precipice.
Key Messages: California’s Health Care System Is on Life Support
The risk of losing access to critical health care services for Californians has never been greater.