Earlier this week, CHA joined a coalition of hospital associations in California in sending a letter to Gov. Gavin Newsom seeking expedited submission of proposed reimbursement programs that require federal approval.
Collectively, three programs that are self-financed by hospitals — either via the hospital quality assurance fee or the intergovernmental transfer of local funds on behalf of public hospitals — are projected to provide more than $16 billion in Medi-Cal funding to hospitals in 2025. These programs also bring some $2.4 billion in direct support to California’s General Fund.
With 2025 rapidly approaching, timely submission of these program proposals, along with their subsequent federal approval, are critical to prevent compounding the significant financial uncertainties that hospitals face.
Today, more than half of all California’s hospitals lose money every day to provide care for patients. This is driven by stagnant reimbursement in the face of ever-increasing expenses for labor, pharmaceuticals, regulatory mandates, and more (the cost to deliver care has risen more than 30% in the past five years alone).
Vital services, such as emergency care, cancer treatment, maternity services, treatment for mental health and substance use disorders (and more) are essential to a strong, vibrant community.
At greatest risk are the 15 million Californians who rely on Medi-Cal for health coverage. Hospitals providing the most care to these populations are especially vulnerable — those with the highest percentage of revenue from Medicare and Medi-Cal have, on average, operating margins that are five points lower than hospitals with the lowest.
Securing federal approval of these programs is crucial, both to solidify the financial viability of California hospitals through adequate reimbursement and to further secure the fiscal underpinnings of California’s Medi-Cal program at large.
