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Latest State Budget Proposal Sharpens Our Focus on Hospitals’ Needs

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Last week, Gov. Newsom released the May Revision to his 2022-23 budget proposal — an update to the one he announced in January — which the Legislature will now consider for its June 15 deadline to pass a finalized budget. 

With the countdown having now begun for the final month of negotiations, the budget takes some important steps toward investments in health care, including funds for additional COVID-19 tests, vaccines, and contingency staffing; health care workforce development; health information exchange infrastructure; and to address child and youth behavioral health needs. 

But in some of its other major proposals, the governor’s budget will require us to engage both the administration and the Legislature in further discussions as we work to clarify key pieces and advocate for funding that will alleviate the ongoing strain on your ability to care for Californians.  

One proposal we’re keenly focused on would allocate $933 million for the state to extend retention pay to health care workers in hospitals, skilled-nursing facilities, and psychiatric hospitals.  

Although many details remain unclear, what we know is that the state would make an initial base Although many details remain unclear, what we know is that the state would make an initial base payment for full-time workers. If a hospital then chooses to make an additional contribution, the state would match the hospital’s contribution (not the other way around) up to a certain amount, with the total state payment not to exceed $1,500. Employers would not be required to make a contribution. 

What we have yet to learn is which employees this would apply to; how exactly it would apply to part-time workers; whether there would be a retroactive component for retention pay hospitals have previously given; or how the state funds would be distributed, among other questions. Because so much about this proposal demands further explanation, we began talks with state leaders immediately, and those conversations are ongoing as we try to determine how this will affect you and your staff.  

Missing from the revised budget proposal are two proposals CHA advanced for the Medi-Cal program — one that would update Medi-Cal rates that have been frozen since 2012-13, delivering more equitable funding for health care resources to communities that are highly reliant on Medi-Cal, and one that would expand Medi-Cal graduate medical education to include all eligible hospitals and make ongoing investments in Medi-Cal graduate medical education. While not expected to have been included, the revised budget does not modernize the 2030 seismic mandate. We’ll continue to press for these important initiatives on every front, urging lawmakers to address the unprecedented challenges you’re facing by incorporating them into their final state budget.  

Your hospitals have lost more than $20 billion during the COVID-19 pandemic, more than half now operate in the red — and you have collectively saved an estimated 700,000 lives. You must not be forgotten by the Legislature as you continue, without hesitation, to care for all who need you.  

These are the messages we’ll be carrying forward on your behalf to legislative leaders and to the administration over the next four weeks as we march toward the June 15 budget deadline.