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.
State Resubmits Hospital Fee Program 9, Draft Model Available for Members
What’s happening: On May 15, the state submitted the payment policies for the next iteration of the Hospital Fee Program (Program 9) to the Centers for Medicare & Medicaid Services (CMS). This is the final piece needed for CMS to review the full application.
Comments Due in July for CMS’ Medicaid Supplemental Payments Proposal
What's happening: Yesterday, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule outlining changes to Medicaid supplemental payments, including managed care state-directed payments. This is some of the implementation rulemaking associated with the payment reductions Congress enacted in the One Big Beautiful Bill Act.
May Budget Revision Avoids Broad Health Care Cuts
What’s happening: Gov. Newsom’s May Revision to the proposed 2026-27 state budget reflects a stronger-than-expected revenue outlook that avoids broad cuts to health care while maintaining a cautious fiscal approach that includes significant changes to Medi-Cal coverage.
Governor’s May Budget Revise Proposes Significant Medi-Cal Coverage Changes, $50 Million for Distressed Hospitals
What’s happening: Today, Gov. Newsom released his May Revision budget proposal, which includes changes to Medi-Cal coverage along with spending cuts and revenue increases to address the long-term structural budget deficit. The proposal also includes $50 million to provide short-term support for distressed hospitals and commits to working with the Legislature on the issue.
Applications for Distressed Hospital Small Grant Program Due May 18
What’s happening: Following the governor’s signing of Assembly Bill 108 (Gabriel, D-Encino) last week, the Department of Health Care Access and Information has established the Distressed Hospital Small Grant Program, which will provide $25 million to assist hospitals in immediate and severe financial distress. HCAI has released the grant application, which is due May 18 by 5 p.m. (PT).
CHA Briefing Highlights Financial Strain Facing Rural Hospitals
What’s happening: On Tuesday, CHA held a briefing for legislative staff on the financial realities of rural health care survival.
May Budget Revise Approaches with Mixed Fiscal Signals
What’s happening: The governor is expected to release his May budget revise next week, which will kick off budget negotiations with the Legislature ahead of the June 30 deadline.
Rounding the First Turn in the Legislative Session
A critical deadline passed last week in the state Legislature and there’s good news: both of CHA’s sponsored bills — one that would expand and reinvest in the Distressed Hospital Loan Program and another that would cost out proposed laws — have passed out of their committees.
CHA Alert Reminder: Act Now to Support Distressed Hospital Loan Program
What’s happening: On Monday, CHA issued an alert reminder, asking members to write to the Senate and Assembly Budget Committee chairs and support the request for a one-time appropriation of $300 million for the Distressed Hospital Loan Program, as well as statutory changes to advance the program.
Medi-Cal Rx Claims to Require ICD-10-CM Diagnosis Codes Beginning This Fall
What’s happening: Starting this fall, ICD-10-CM diagnosis code(s) will be required for Medi-Cal Rx claims. This change is being made to better implement appropriate utilization management controls, including prior authorization.