May 19, 2026 · Budget Subcommittee No 1 Health · 45,978 words · 21 speakers · 403 segments
Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Good afternoon. We're going to call this hearing to order and committee staff, if you'll please call the roll.
Assemblymember Addis, Assemblymember Bonta, Assemblymember Patterson, Assemblymember Schiavo, Assemblymember Solache, Assemblymember Stephan.
We're going to continue as a subcommittee, obviously. So good afternoon and welcome to the Assembly's Budget Subcommittee on Health. We are in our last hearing about the May revised, but over the past five months, our committee has held eight hearings, including today's hearing where we reviewed the governor's January budget proposal. across a full range of health care, mental health care, dental care, and other programs that serve millions of Californians in the health space. And as I mentioned today, we're going to examine the governor's May revision. Over the past number of months, we've heard dozens of hours of testimony. So thank you to all of the folks that have come over the past few months to give your testimony and are here today to give your testimony. And we've listened to hundreds of hours of public comment. And I would really want to say thank you to the public for bearing with us through many hours of public comment. We know, and I'll do it again this time, we know we often make that public comment tight because we want to be respectful of the folks that are behind you in line. When you come to the microphone, there's usually dozens of people who want to do the exact same thing. So we'll do that again today, and I'll get into that during housekeeping. I do want to begin by acknowledging the administration's May revision and the fact that the administration has responded to some of the concerns that this subcommittee and our members have raised, and frankly, members across the Assembly have raised over the past few months. The May revisions, in my opinion, do move us towards doing what the people of California have asked us to do, which is to make California an affordable place to live and a place where each of us can thrive. And there's no more important place to do that than in the health care conversation. We know that health care costs are rising across the nation. They've risen here in California. And when health care becomes out of reach, that hits California's pocketbooks in a particularly inhumane way. So I want to say thank you to the administration for progress made. And that would include critical public health information technology. We talked quite a bit about the vaccine tech programs in one of our recent hearings. And then right after that, it was announced about the hantavirus and the Ebola outbreak. So very pleased to see that there's more dollars proposed for health IT. Also, money for vital county administration in the face of HR1 and work requirements and re-verification requirements. We know that this is going to hit counties particularly hard and so I want to say thank you to the administration for making progress in that area It not everything that counties are asked for but we have seen progress in May revision I also want to mention asylees and refugees and other lawfully present immigrants who are on the verge of losing medical coverage. This administration has put in a proposal for a very humane, in my opinion, a very humane delay to those cuts. And so we were pleased to see that. And then, of course, we have talked about Covered California and how important those ACA subsidies that Congress failed to renew have been. And so pleased to see that the administration has added additional dollars for subsidy backfill or to protect subsidies and to protect, therefore, affordability for so many Californians. I will say, though, that I do believe the May revision does still dismantle health care in California in a very inhumane way, even for all the progress that we've seen since the last time we discussed this in a hearing. There are many things in this May revision that the legislature and many of our members with great emotion said no to last year. So last year, we agreed to a $30 premium for Medi-Cal for a certain UIS population or certain undocumented individuals. Many in the Assembly found that to be a tough pill to swallow, yet we reached agreement. However, now the administration is requesting or proposing a $50 Medi-Cal premium, and I don't think people are going to be happy about that. Additionally, we preserved health care for seniors. Last year, the administration really was proposing a draconian asset test for seniors. The legislature was not happy with that. We did land on an agreement of an asset test that felt reasonable to the majority of people. Now the administration is back trying to ratchet that back, which will cut health care again to millions of seniors in California. We also see there's no solution for Medi-Cal Dental, which is problematic. We've heard from dentists at hearings earlier this year, and it's been a huge topic of discussion. We know that dental care is a preventative cost saver that will stop people from having to go to our emergency rooms, and there's no solution there. Additionally, there are other key issues that legislators have been speaking up on dozens at a time on specific issues that are going to hit their communities and all of our communities in a negative way. This includes the lack of planning for funding to keep mobile crisis units as a requirement for every single county, the lack of workforce and quality incentive program funding, which really would boost quality in our skilled nursing facilities if those dollars were to stay in place or to be, or those promises were to be met. We also have a lack of plan to address an acute physician shortage that particularly hits rural and coastal areas of the state. So while there's good work, there's also a lot of work to do between now and getting to a final budget agreement. So I know that I have at least one other colleague here on the dais with me and others will be coming that may have things to say. But Assemblymember if you have comments and if not we go into housekeeping Okay we move on then and I trust other members have things that they want to say throughout the day today if they able to make this hearing Just for housekeeping, the agenda is available online on our committee's website. And physical copies are available in this hearing room. We'll ask that panelists representing the Department of Finance and the LAO. if the witness table gets full, we'll ask you all to be able to sit at the sides of the room to make room. We're going to keep with our normal course of business. After each panel presentation, we'll take questions from members, followed by public comment, and then we'll open for public comment for items not on the agenda at the very end of the hearing. And as I mentioned at the top, We're going to keep public comment at 30 seconds per person and direct folks, if you could name organization your position on that particular panel. Before we jump into our first issue, we're pleased to have LAO here, and I know that you had a sort of broad overview that you are prepared to present, and we welcome that. So we'll have LAO come, and please introduce yourself and begin when you're ready.
Yes, good afternoon, members. Mark Newton with the Legislative Analyst Office asked to provide a brief overview of our office's analysis of the overall architecture of the Governor's May revision. We released a report yesterday that offers our initial take on the governor's May revision, and happy to provide our technical assistance throughout this process to the subcommittee as you work through your deliberations. So our report on the overall architecture was focused on the underlying condition of the state general fund. And our analysis did find that the administration has made significant progress in reducing the state's operating deficit or structural deficit. That's sort of the difference between revenues and expenditures. But we do find that the underlying condition of the state's budget is not sound. And to give some context, despite booming revenues, the architecture of the May revision does rely on $20 billion of reserves and extra borrowing to make the budget balance. So despite the booming revenues, even as we speak in the current year, there is still an operating deficit, meaning that spending is outpacing revenues in the year. So what this means then is that the state—excuse me. So I should note that the governor's budget does balance the budget in the budget year plus in the following year, and that's one year beyond the constitutional requirement. But the balancing of the budget is through the reliance on reserves, prior fund balances, extra borrowing, and the like. So with the booming revenues process, But the operational deficit, this requires action. And our office's recommendation, we have a multi-part sort of recommendation on what we recommend for the legislative course of action. And that is maintaining the amount of solutions proposed by the governor. make new, actually discretionary reserve deposits, as opposed to relying on reserves and drawing them down, and not adding to the state's already existing spending commitments. On the latter, appreciating that there can be extraordinary cases where it can be a high priority for the legislature to spend. We think it's a very, very high bar for discretionary spending proposals, but certainly health and safety requirements and the like can be a key factor there. So this does involve, we think, some really challenging trade-offs for the legislature and decisions to make. And we appreciate that on the one hand, and putting this into the context of the committee's jurisdiction, HR1 does mean that services are being reduced and some Californians no longer will have access to the same supports that they did before. But on the other hand, the state's expenditures are exceeding revenues at a nearly unprecedented time of revenue growth. So our recommendation to build more reserves, the reasoning and the thinking is with implications of what would be required should the market reverse course. So saving now some of the run-up in revenue actually will help prevent even deeper cuts and more serious sort of trade-offs when revenues do drop, which they will. We're very happy as an office to, as I said, provide assistance to the legislature as it is making these important choices. But we wish to frame sort of the overall architecture to to help guide the deliberations of the subcommittee and others
Thank you. Thank you so much really appreciate that the overview We're gonna move into issue one then our Department of State Hospital's may revision proposals and Welcome and please go ahead and introduce yourself and you can begin when you're ready
Good afternoon, Chair Addison, members of the subcommittee. Victoria Rapley with the Department of Finance. The administration is here today to present the various May revision proposals. And before we dive into these, I'd like to provide some opening remarks. The May revision proposes steps to significantly address what the Department of Finance and the LAO have been identifying as large out-year operating deficits, meaning we're spending more than the revenue collected in each of those years. At the governor budget the operating deficits were over billion each year starting in 2027 In the May revision these have been more than halved in the out years starting in 2028 29 the May revision takes a balanced approach to addressing deficits by including a combination of proposals that increase revenues and reduce program costs and health care specifically the May revision proposed proposes 385.7 million in reductions and reforms in 2627 and 1.2 billion in 2027 28 and ongoing the May revision also includes 2.7 billion each year associated with new revenue and fund shifts specific revenue proposals that will directly support health care costs are the MCO tax renewal. This funding directly supports Medi-Cal and helps fund the Medi-Cal program and the digital software tax, which would increase revenues for local jurisdictions by $560 million in 2026-27 and $1.1 billion annually thereafter. Similar to the discussions last year, we acknowledge that these are challenging proposals and difficult decisions are still necessary to finalize a balanced budget that responsibly supports California's core programs. We understand that the legislature may have other proposals and look forward to further discussions over the next few weeks as we develop the final budget act.
Great. Good afternoon, Madam Chair, Member. I'm Mark Beckley, Chief Deputy Director for Operations for the Department of State Hospitals. I'm joined today by my colleague, Chris Edens, who's the Chief Deputy Director for Programs. I'll be covering all the items in our section on the agenda, with the exception of items 4 and 7, which will be covered by Chris Edens. And I'll start with an overview of our program. At May revision, the Department of State Hospitals proposes a total budget of $3.23 billion, which is an increase of 1% or $31.4 million over Governor's budget. DSH's projected census at the end of next fiscal year is 8,362, which is a decrease of 65 patients across our various programs. I'll now move on to our first item, which is the County Bed Billing Reimbursement Authority. The County Bed Billing Reimbursement Authority pertains to hospital beds that DSH makes available to counties for the Lanterman-Petrus Short, or LPS, and non-restorable and competent standard trial, or IST, patients who are a county responsibility. DSH requests a reduction in county bed billing reimbursement authority of $12.4 million in 25-26 and $5.8 million in 26-27 and ongoing to reflect a gradual phase-in of LPS beds and projected bed utilization. Since last year, DSH increased its available bed capacity for LPS patients from 556 beds to 625. This increase was accomplished in two phases. Twenty-five beds were added at the end of fiscal year 24-25, and an additional 44 beds were added in February of this year. This reimbursement authority adjustment reflects the timing of this phase-in, bed utilization, and projected reimbursements to be collected. I'll now move on to the next item, which is limited public contract code exemption authority. DSH proposes budget billing which to provide the department with contract exemption authority for online services and subscriptions providing health care or pharmaceutical information that support the quality of and access to patient health care where DSH historically has only received one bid for these services DSH has subscriptions to a number of vendors that provide online support to our clinicians, nurses, and pharmacists for patient care and treatment. For instance, our pharmacists use an online pharmacy formulary that provides them with the most up-to-date medication information, including flagging negative medication interactions. Another important online subscription is for our nursing plans. This suite of tools provides nurses and level of care staff with up-to-date, evidence-based clinical decision support and the ability for nursing care plans to be generated from the content that's suited to our specific patient needs. This limited contract exemption language would enable DSH to quickly process contract amendments for online health care subscriptions and contracts so that there are not service interruptions for critical pharmacy, clinical, and nursing information. In addition, we have experienced issues in the past where certain contracts were deemed to be IT contracts because the information being provided is provided through the Internet. However, the vendor is not technically an IT vendor creating challenges in the procurement process that can significantly delay or prevent DSH from procuring these critical resources. We believe these services are essential and can contribute to delays of services for critical patient needs, while DSH works to secure alternative providers, and this increases risk of poor patient outcomes. I'll now move on to the next item, which is the reversion of our prior year unspent funds. DSH proposes to revert $20 million in general fund from the 24-25 fiscal year in operating expense and equipment and contracts where the funds were not fully utilized. I'll now move on to our DSH Metropolitan Central Utility Plant budget proposal. The Department of State Hospitals requests to revert the existing authority of $50.5 million from the Public Building Construction Fund. and provide 58.1 million in new lease revenue authority for the construction phase of the DSH Metro Central Utility Plant replacement project. This is a net increase of $7.6 million. This project will replace the existing Central Utility Plant, and the utility plant provides hot water and central heating, as well as chilled hot water and air conditioning to 32 housing and administrative buildings throughout the Metro campus. The system is 38 years old, is nearing its end of life. The project will install new chillers, boilers, pumps, and controls at the central plant and replace the existing seam-based system with hot water piping. The cost increases are attributable to additional requirements identified during the design and work and drawings phase of the project to ensure safety, code, and energy efficiency requirements are met by replacing the central utility plants roof and HVAC system relocating in the central control room and providing dedicated electrical and heating sources to two of our buildings. I'll now move on to our EHR proposal. DSH proposes twenty seven point six million in 2026-27 to fund 68 limited term positions to implement and support the organization Continuum Electronic Health record solution or EHR solution for DSH Coalinga and to begin readiness activities for DSH Metro and Atascadero. DSH also proposes to reappropriate up to 6.3 million from 2526 and proposes provisional language to augment the funding as needed to maintain the proposed EHR 202627 project schedule. The EHR will digitize and centrally store patient health information so that care can be administered quickly and accurately, enables hospitals to operate more efficiently, and provides continuity of care for patients removed from one DSH facility to another. The system will also allow DSH to more easily analyze patient data for quality assurance and treatment improvement purposes. The HR will bring DSH up to modern hospital electronic standards. And then finally, I'll present on our workforce development proposal. DSH proposes to use Behavioral Health Service Act funds to support its existing workforce development programs, including psychiatric residency, fellowship, and psychiatric technician training in lieu of using general fund. In order to make this change, DSH requests $10.3 million general fund reduction in 2026-27 and a $10.9 million general fund reduction in 2027-28 with commensurate increases in reimbursement authority to capture the BHSA funds. The BHSA funds would be received via an interagency agreement from the Department of Health Care Access and Information. In addition, DSH proposes $3.8 million in 2026-27 and $3.5 million in BHAsA reimbursements ongoing to support an additional psychiatric training cohort at DSH NAPA. Historically, DSH NAPA has had very high vacancy rates for its psychiatric technicians. This program would add an additional 30 individuals to this cohort, which will help alleviate DSH-NAPA's high psychiatric technician vacancy rate. I'll now turn to Chris Edens to report on our other two items.
Good afternoon, Chair, members. Chris Edens, Chief Deputy Director, Program Services. I'll be covering incompetent-to-stand trial solutions first. At the May revision, we are updating our savings that was originally reported in the governor's budget. First up, we're reporting a total of $59 million, reduction to the one-time prior year fiscal year 23-24 savings of $114 million reported in the governor's budget. This is going to support our DSH infrastructure projects and additional seven projects for 625 beds. We are also reporting an additional one-time savings of $11 million in fiscal year 2526 and $8 million in 2627 related to updated program activation schedules of DSH diversion and community-based restoration programs. The cumulative total savings for all IST related programs across Governor's budget and May revision are $55 million one time in 23-24, $128.8 million one time in fiscal year 25-26, and $102.2 million one time in fiscal year 26-27. In addition, DSH is requesting to realign $10 million of IST Solutions funds in 26-27 and ongoing to, one, support increased statewide IST bed capacity at the Placer County Jail-Based Competency Treatment Program, totaling $3.9 million, and two, to correctly reflect funding of $6.1 million for the conditional release program to support an MHRC program within that. As part of this item, I will also be covering the proposed trailer bill language. We are proposing trailer bill language to remove the June 30th, 2026 sunset date for the independent placement panel program, also known as IPP. The IPP was piloted as an independent panel to improve con rep access and participation for primarily not guilty by reason of insanity and offenders with mental health disorder patients within our state hospitals. The independent placement panel could thereby expand the availability of state hospital beds for IST individuals by facilitating discharge of DSH patients to con rep for commitment types with historically longer lengths of stay. Overall, this pilot was successful. The independent placement panel largely met its objectives with increasing step downs to con rep. to the CONREP continuum, providing standardized neutral and quality reports to the courts and increasing public safety. The requested trailer bill will also allow this effective program to continue operating ongoing. And then lastly, I'll cover the conditional release program non-SVP adjustment. This was briefly actually mentioned in the IST solutions item. DSH is continuing to to expand its continuum of care and anticipates a total contracted caseload of 862 con rep clients in the current year and 877 in the budget year. The department is requesting to realign 6.1 million from the incompetent to stand trial solutions funding in fiscal year 2627 and ongoing to support the activation of a 24 bed mental health rehab center within the con rep continuum of care. That concludes our testimony. Happy to answer any questions.
Thank you so much. Is there anything from LAO or DRF?
No?
Thank you. Any member questions? Go ahead, Assemblymember Bonta.
Just on the BHSA reimbursement for workforce development, so there's a 10.9 in budget year plus one, right? And then ongoing support for existing development coming from BHSA. Is that a revenue source that has been, is that the prior revenue source for the workforce development, BHSA funding?
I'm sorry, are you asking if it's the proposed revenue source?
No, has it been the prior revenue source?
No, historically it's been general fund.
So general fund, so, and is the, is this proposal from BH, to have that come from BHSA, what is that based on? Why are you trying to pull it from BHSA?
So this is part of the general fund offset solution. Generally, this program was identified as an option under the workforce requirements. we do have kind of that item further along in the agenda that provide additional details Okay thank you
Thank you. Now just like to note that the 10.3 is tied to our existing workforce programs and then there's a separate funding amount to start new psychiatric training cohorts. So that's a new program using BHSA funding. But in terms of scalability, the request right now is just for the 10.3 for this year, and a request to consider ongoing support out of BHSA separately. Yeah. Do you want to answer?
Yeah.
So there's two parts to this particular proposal. There is a 10.3 million swap in the budget year and a 10.9 million swap in budget year one. However, we are proposing that in budget year a little over $14 million be provided from BHSA, and then in the next year $14.4 million.
So the total is $24.3 million?
Over the next two years, yes.
Okay.
From BHSA?
Yes.
Thank you for the question. And we're going to, I think, in issue four, item four, we're going to talk more about all of the general fund offsets. So I know there has been a lot of talk about how we get to this balanced budget and different mechanisms to make that work. And I think one of those mechanisms has been a number of moves with general fund offsets that members may or may not be pleased with. So I don't have any questions. Any other questions from the dais? We're going to move to public comment then for issue one, Department of State Hospitals May revision proposal. I don't see anyone in the room, but is there anybody out in the hallway? Thank you. revision proposal for the emergency medical services authority. And I think we slotted you for about three minutes of testimony when you make it to the table here. So appreciate your succinctness. Absolutely.
Is it on?
Thank you.
It should be on. It should already be on.
Thank you, Madam Chair and members. Gabrielle Santoro with the Emergency Medical Services Authority. EMSA includes two proposals as part of the May revision to the governor's budget. First is a request for 203,000 one-time funds from the 988 State Suicide and Behavioral Health Crisis Services Fund in budget year to support the development of statewide guidance on behavioral health crisis response for EMS agencies. Second we have a request for about million general fund in budget year and million general fund in budget year plus one to support the operations for the enterprise system development system which includes three components the POLST e-registry, the central registry system, as well as the California EMS information system. That concludes my remarks. Happy to answer any questions.
Thank you so much. And anything from LAO or DOF? No. Any questions from the dais on this proposal? Assemblymember Bonta?
As you all know, we had a hearing recently on the 988 centers. There seemed to be some concern about the rate setting. Can you speak to where that conversation lies and the proposal that you have here? I completely appreciate the question.
Unfortunately, EMSA is not the fund administrator for it. I have to defer to my colleagues with the California Office of Emergency Services on the development of that rate. Okay.
Another question. I don't have any questions either. Thank you all. I don't see any others from the dais. Any public comment on issue two, EMSA, may revision proposals? I see one person coming up, and if the sergeants can check if there's any in the hallway.
Hi, Darby Kernan. On behalf of the EMS Administrators Association of California, MSAC, we are in support of the 988 proposal. This is really to try to help with coordinating response to emergency situations that include behavioral health. Thank you.
Thank you. I think that's it. No other public comment in the hallway? Okay, I think we're good. We're going to move. Thank you so much. Appreciate it. Appreciate your succinctness. Issue three, we're going to go to listening to the May revision proposals for the Department of Managed Healthcare. And I think you also have about three minutes, so we welcome your succinctness, and then we'll see if LAODOF have any comments and then move to the dais. Thank you. And good afternoon, Madam Chair.
Members of the subcommittee, my name is Dan Southerd. I'm the Chief Deputy Director at the California Department of Managed Health Care, and I'll go over two DMHC-related May revision budget change proposals. The first being the California Managed Care Complaint System Resources and Project Implementation. And during the fiscal year 25-26 budget process, the DMEC requested and received approval for $1.157 million in fiscal year 25-26 from the Managed Care Fund to initiate the planning phase to modernize the customer and provider complaint customer relation management system. The DMC is currently requesting resources for the initial implementation of the California Managed Care Complaint System replacement platform that would provide solutions to the following businesses and technical risk issues, remediate information security risks inherent to the current operating and existing legacy systems, provide more robust workflow automation that will allow existing caseworkers to process more complaints and reduce manual processes, enable rapid low-code workflow automation that currently requires months or years of software development to days or weeks, using low-code technology and foster more efficient complaint resolution, enhance communication transparency in the resolution process, and finally, centralized system tracking, management, and resolving management systems. The DMHC is requesting in fiscal year 2627 from the Managed Care Fund to support the initial implementation of a health plan member and provider complaint management system The resources requested in this proposal will allow the DMHC to meet required timeframes for reviewing consumer provider complaints and to support the DMHC's customer service efforts to assist Californians. The second DMC proposal is the electronic filing and analysis of claims and settlement data project implementation. Similar to the previous proposal, during the fiscal year 25-26 budget process, the DMC requested and received approval for $191,000 in consulting funding to initiate the planning phase to implement an electronic filing and analysis of claims settlement IT project and assist with IT project approval lifecycle development to implement the requirements of AB 3275. The DMHC anticipates a 24-month IT modernization project to implement the necessary system updates and support compliance with AB 3275. The solution will also enhance the DMHC's risk-bearing organization oversight, financial reporting systems, grading criteria, corrective action plans, process, and claims timeliness reports to support full compliance with AB 3275. This proposal requests project funding for two fiscal years in the amount of $2.42 million in fiscal year 2627 and $2,026,000 in fiscal year 2728 from the Managed Care Fund to implement electronic filing and analysis of claim settlement data solution to meet the requirements of AB 3275. That concludes my brief overview. More than happy to answer any questions.
Thank you.
Anything from DOF, LAO? Nothing.
Anything from the DAIS? Nothing, nothing. Any public comment? Looks like there's no public comment in here, none out there. So we'll say thank you so much for your report. Appreciate it. And we're going to move to issue four. So as you're coming to the table, I'll just say that we're going to hear from the Department of Finance on the administration's overall proposed spending plan for the state's share of Prop 1 revenues. I know I've heard a lot about this from colleagues as well as from constituents. I'll note that several Prop 1 state investments will be administered by individual state departments, including Department of Health Care Access and Information, the California Department of Public Health, and the Department of Health Care Services that are all present today to answer additional questions if we have any. So I will turn it over to all of you to please introduce yourselves and begin whenever you're ready. Good afternoon, Madam Chair and members.
My name is Riley Thompson with the Department of Finance, and I am presenting today on Behavioral Health Services Act Fund State Investments. Beginning in 26-27, Proposition 1 allocates at least 4% of total revenue for the Department of Public Health for population-based behavioral health prevention programs and at least 3% of total revenue for the Department of Healthcare Access and Information for behavioral health workforce programs and the remaining amount for other state purposes. Previously, the state-directed cap of funding was 5% of total revenues. This has since increased to 10%, which has created new revenue opportunities to support workforce and population prevention programs. This is not an opportunity that this has had in the past. The May revision proposes $174.8 million for the Department of Public Health, $131.1 million for the Department of Healthcare Access and Information, and $335.2 million for other state-directed purposes, including $10 million for the Commission for Behavioral Health from the Behavioral Health Services Act Fund in 26-27 for the purposes described and required by Proposition 1. The May revision also includes $211.9 million in behavioral health services funding in lieu of general fund in 26-27 for existing statewide behavioral health programs. The administration has carefully evaluated existing behavioral health programs supported by general fund within the parameters of Proposition 1. Identified workforce programs aid the overall behavioral health workforce continuum and allow flexible post-program placement within the state or counties. Identified population health programs support mental health and substance use prevention programs for underserved populations. In addition to reducing general fund costs by shifting to the Behavioral Health Services Act Fund, these programs represent significant investments in behavioral health workforce and prevention, complementary to the new programming that will be enacted by the departments utilizing Behavioral Health Services Act Fund resources. So accounting for this shift from the general fund to the Behavioral Health Services Act fund, the Department of Public Health will have $119.8 million from the BHSA fund, and the Department of Health Care Access and Information will have $94.3 million from the BHSA fund to expend on new population health and workforce behavioral health programming. HCI will also continue to support BHConnect with their allocation. Funds for the Department of Public Health and the Department of Healthcare Access and Information will be available through June 30th, 2029. Thank you for listening to this testimony. I'm happy to answer any questions that the members may have.
Thank you so much. Is there anything from LAO on this?
Yes. Will Owens with the Legislative Analyst's Office. So our office is still in the process of reviewing the specific programs that are being proposed to be offset under the governor's proposal. So, but that being said, a key question for the legislature with these proposals is whether the proposed solutions are consistent with the language within Proposition 1. The first being that there is non-supplanting language within Proposition 1, and whether these proposals to offset general fund with BHSA revenues would kind of run afoul of that. The second question is whether the specific programs proposed to be offset constitute eligible uses of the funds under Proposition 1. So we've raised these questions with the administration and are working with them to get more information. And once we have that, with our analysis, we will promptly follow up with the committee. But in the meantime, available to answer any questions.
Thank you. Thank you. Any questions from the Dias?
Assemblymember Bonta. Yeah, I just want to better understand some of the proposed fund draws from BHSA. And just the overall context, I understand for Prop 1 funding and the movement, or the impact, I should say, on counties that I've pretty consistently heard is that we've taken away a lot of prevention dollars with the way that we've structured Prop 1 usage. and those are severely, being felt pretty severely and significantly on the front lines for people in particular So I have a question about one of the population preventions the Department of Industrial Relations Equal Representation and Construction Apprenticeship Grant with $3.5 million out of BHSA. What is the nexus there?
Yeah, I'm happy to speak to that. And before I do, I just want to really quickly note that the budget does not propose any changes to the local BHSA program. So counties will be receiving 90% of the BHSA funds pursuant to the requirements. So we're not anticipating an impact to the money received at the local level by the counties. But you are making a suggestion about how the state should be using its apportions, 10% of that funds for funding that seems to have questionable nexus to the purpose of Prop 1 and BHSA.
Yeah, I'm happy to provide additional information with regards to that particular proposal.
So as you mentioned, some of the funding is intended to be directed for the Equal Representation in Construction Apprenticeship Grant. So the intention of this grant is to improve worksite culture at construction worksites for a targeted underserved population of women and gender nonconforming employees. Specifically, the grant supports mentorship, community building, focused trainings, and the fostering of peer connections to positively influence the behavioral health of participants. So this is generally in alignment with the intention of Proposition 1 to support underserved communities via community-wide behavioral health programming.
And there are in both the population-based prevention and workforce, again, it seems like there's $11.9 million directed at this mental health app. The chair had a serious hearing panel on that specifically, and then an additional $44.6 million for apparently that same set of apps. So the Children and Youth Behavioral Health Initiative services platform?
Yes.
So this specifically for the mental health apps, right?
Yes. So I can give a little bit of context to that one as well. This platform supports virtual health services for children and youth to increase access to culturally responsive behavioral health care for youth in underserved and rural communities. These supports provide first line and primary prevention activities that are consistent with the goals of the allocation for population based mental health and substance use disorder prevention programs, including reducing the prevalence of and risk of developing mental health and substance use disorders and incorporating evidence-based practices. So this is in alignment with the intention of Proposition 1 to bolster access to preventative behavioral health services for specified impacted populations on a community-wide level.
Is there anyone besides DOF that through the chair might want to answer that question? Apparently no.
Okay. And then there has also been, and Chair has highlighted as well, the defunding, if you will, of the mobile crisis services. Can you share with me what the intention is in this proposal for mobile crisis services?
Do you mind repeating the question Mobile crisis services There been a lot of talk about that
It's clearly been a priority of many of our colleagues in the legislature to preserve funding for that and to not shift the cost of those two counties. I'm looking at something here that includes BHSA and mobile crisis services. So can you speak to that at all?
Yes. So that 20 million BHSF dollars is to support the remaining portion of the non-federal share for mobile crisis services through the required date in statute of March 31st, 2027. And so this is just fulfilling that last portion of the non-federal share. And just to provide additional detail, this is replacing the 988 special fund dollars that were proposed for that portion of the non-federal share in the governor's budget. We're replacing the 988 dollars with behavioral health services fund as it's a more appropriate source of funding for the service.
Why is it a more appropriate source of funding?
The intention of 988 was to be able to ensure that there was a place to call and people to be able to be responsive to that in an urgent and efficient way. So in order for mobile for 988 dollars to be used for mobile crisis services specifically, the service has to be initiated through a 988 contact and then transferred to a mobile crisis service. And so given sort of the difficulty with being able to tie that contact initiation to the mobile crisis service initiation, just given that complexity, we think Behavioral Health Services Fund would be a more appropriate source.
that was raised in our hearing on 988 and seemed to be an area of improvement, not an area to then defund or rationale to defund 988 and the mobile crisis units within 988 defunding. Those are all the questions that I have.
Thank you. I think that just to be transparent, this is kind of awkward because the voters voted for something and now there's money being shifted around. I don't know that the voters really expected some of the things that are on page 10 here in terms of this money shift. So it creates an awkward situation to put something before the voters, to have the voters put their faith in a proposal, to have that begin to work, to get negative feedback from the counties in terms of their loss, as Assemblymember Bonta said, in terms of their loss of prevention dollars, right? So the counties are hit pretty hard, and we have heard from them quite a bit in terms of not being able to fund prevention, but then to see this amount of money that is both not in prevention and going to things that the legislature has expressed concern about. Certainly we had as the assembly member mentioned we had lengthy discussions about these mental health apps I know we've had questions in the past about what a wellness coach does how that licensing works Is that really beneficial for folks I have questions around you know why are we paying for CDC our budget Not I don believe CDCR staff should get trained or that there shouldn be outreach coordination and mental health training for CDCR Of course there should. But why is that now coming out of these Prop 1 dollars as opposed to coming out of the CDCR budget, the general fund, what have you? how did all of this massive list of things all of a sudden become Prop 1 dollars? And I don't think the voters really wanted Prop 1 to be a slush fund. I think the counties feel frustrated that they've lost prevention dollars. It's what the, you know, what Prop 1 did was, and it's why people had concerns about Prop 1, is the loss of prevention dollars to put into other very important things, more mental health beds. But certainly when I have asked the question to counties who are feeling the tough part of loss of prevention dollars, I've asked the question, well, are you getting beds built in your community? And there's also questions about where those dollars are. So it's just a concerning proposal, and a lot of questions around what we said at the top of this hearing was there's a lot of mechanisms, and I think LAO pointed it out, there's a lot of mechanisms to balance this budget, and the question is should it be balanced on the back of Prop 1 dollars? So there's I think there's a lot of concern. I've certainly heard a lot of concern from the legislators that aren't here today about how this proposal is rolling out. So I guess my question would be, do you have kind of any response about that piece of things and the and the fund shift overall and how this is? how this money is. It feels a little bit like it's being used as a slush fund to backfill general fund.
So I think, first of all, appreciate and hear the concerns from the legislature. This proposal represents an opportunity to support these existing behavioral health workforce and population health programs with this fund source that has been deemed as appropriate, These programs are in line with the intentions of Proposition 1 to bolster the ability of individuals to access population health preventative care as well as invest in these workforce pipelines. And in doing so, it allows us some additional flexibility within the general fund that was previously supporting these programs. So within sort of the broader budget picture that we're facing, this was identified as one of the ways to give us some additional flexibility in those general fund dollars while maintaining these population health and workforce incentive programs and services for the state.
And do you have any response to LAOs that they've asked for and to start looking at? Do these items really qualify? Are they actually eligible under Prop 1? Do you have any response for LAO?
Yeah. So with regards to the concerns that were raised, the administration has evaluated the language of Proposition 1. We do not see this proposal as a violation of statute. So with regards to the concerns that were raised about supplantation,
every year statute requires that the funding set aside for state purposes be appropriated in the budget. So these dollars are not ongoing. They're subject to the annual budget act. So these funds could be rolled back or augmented through this annual process as needed. And then with regards to the individual programs. I'm happy to answer specific questions about specific programs as needed, but in general, these programs were assessed within the intentions and context of Proposition 1 to identify programs that, again, provide population health programming being provided on a community-wide level to target populations. And the workforce bucket was assessed to determine if these programs are helping to bolster this workforce pipeline into behavioral health employment opportunities at the county and state level. So we sort of looked at all of the requirements of Proposition 1 and assessed whether or not these programs sort of fit within the intentions of this. And it was determined by the administration that the identified programs do fit within the intentions of Proposition 1. Thank you. Anything else from the dais? We'll move to public comment. I see there's a number of people. So just as a reminder, you have 30 seconds, even though you may have a longer testimony. We're going to ask you to cut it off their name, organization, and your position on issue for our overview of Behavioral Health Services Act proposals in the May revision.
Hi, my name is Nico Fisher. I'm a high school student from the Bay Area. I'll be heading to UC Berkeley next year, and I'm here in support of Alcove. ALCOVE is a network of centers around California that provide needed mental health support for young people at no cost to them. More than that, there are safe spaces for the entire community to come together. ALCOVE has had a tremendous impact on my community in Santa Clara County and in the Bay Area. And it's having an impact across the state. And we're asking the government of the state of California to provide a one-time $24 million allocation in the 2026-2027 budget year to just stabilize our operations. This is a really important thing for the young people of California. Thank you.
Hi there. My name is Yash Jha. I'm a high school senior in Los Angeles, California, and I'm the co-chair of the Alcove Beach Cities Youth Advisory Group. We currently have five operating Alcove locations around California. We're going to have 11 by the time August comes around. And I'm just here to also support the $24 million budget ask in support of all 11 centers and the entire Alcove network. Thank you all for your time.
Thank you and welcome.
Hi, I'm Sophie Martin. I'm from the ALCO San Juan Capistrano Center, and I'm from Tustin, California. I'm also here to support the 24 million budget ask for ALCO centers. The system that ALCO provides has really proven to me and my peers that it's the way forward for supporting youth mental health health and addressing the mental health crisis we have nowadays. Thank you.
Hi my name is Mona Cho I'm 18 and I'm from Alcove Beach Cities. Alcove has supported my mental well-being and I'm here to amplify the 24 million dollar budget ask and support of all 11 Alcove centers. Expanding Alcove means expanding access to hope and healing and agency for young people who are too often overlooked and the most effective investments are the ones that help young people before they reach crisis. Thank you.
I'm Sage Hernandez. I'm also for the Youth Advisory Group in San Juan Capistrano. I'm located in Oceanside and I support the 24 million budget ask.
Hi I Susan Parmalee Executive Director of the agency that operates El ALCO San Juan Capistrano and I can say we been deeply affected by the loss of county prevention money This is innovative prevention and early intervention that we need to keep in California We've already made an investment and we really want to keep it going and we really need this one time 24 million budget ask. Thank you.
Good afternoon, Chair members. George Cruz on behalf of the California Behavioral Health Association. speaking on the proposal for population-based prevention. We're in strong support and ask that those prevention dollars focus on the existing programs like the California Reducing Disparities Project, who have well-documented ROI for the state's investment. Thank you so much.
Stacey Haramoto with REMCO, the Racial and Ethnic Mental Health Disparities Coalition, and several organizations with the California Reducing Disparities Project. We really want to thank the members and the staff for trying to get answers about the population prevention dollars because it's been very confusing to us. And we're really glad that you're on top of this because, as you mentioned, our community-defined evidence programs are finding very little support in the counties. And then when the state cuts the commission funding and then the other funds are getting shifted, thank you for helping us keep your eye out. Thank you.
Thank you. Welcome.
Good afternoon, Chair and members of the committee. Diana Luna with the County Behavioral Health Directors Association would like to express concerns with the proposal to shift BHSA funds to offset general fund commitments. As mentioned on the panel, these funds were shifted from counties to state and resulted in significant cuts, and we do not think that it is consistent with the original intent of the proposition. Thank you.
Good afternoon. Glenn Backus for Drug Policy Alliance and full support of the Mobile Crisis Unit funding. Thank you.
Good afternoon. Trent Murphy with the California Association of Alcohol and Drug Program Executives. We represent community-based providers in the treatment system. We are concerned, like you are, about the proposal to backfill existing general fund commitments through the BHSA dollars. We're also alarmed by the shift on a community-based mobile crisis services from a state-funded program to an optional one. Making it optional would make the quality of treatment you receive dependent on your zip code. So we would urge the subcommittee to reject this approach. Thank you.
Michael Henning, California Alliance of Child and Family Services. We represent nonprofit community-based organizations that serve children, youth, families across the state, including providers of mobile crisis, 988 services, CalAIMS advanced care management, and community supports. The California Alliance is concerned about the May revision proposal to use BHSA to replace general fund support, and we agree with this subcommittee that this warrants additional review. We also strongly oppose this offsetting of BHSA funding. Thank you.
Thank you so much. Oh, please.
Hi, my name is Pija. I'm with Somgan, and I just want to make sure, I just want to say we have to remember how important cultural, competent, and in-language education to reduce substance use. Thank you.
Thank you so much. Seeing no other public comment thank you to the panelists I appreciate you putting up with our tough questions And I know we have some things that we gonna work on between now and having a final budget. We're gonna go on to issue five, the Commission on Behavioral Health, May budget, May revision proposals. Let's see. Welcome, and whenever you're ready, please go ahead introduce yourselves and you're welcome to start
okay thank you good afternoon chair Addison members I appreciate the opportunity to present today my name is Brenda Graylish and I'm the executive director for the Commission for Behavioral Health is which is also known as the Behavioral Health Services Oversight and Accountability Commission and I'm joined today with one of my commissioners dr. Gary sigh who also is the chair of our program Advisory Committee the Commission's an independent state agency led by 27 commissioners whose membership reflects the public behavioral health system including consumers family members providers community members counties and state partners our role is to bring transparency evaluation data informed policy recommendations grant making and technical assistance to strengthen outcomes for Californians most affected by the public behavioral health system especially those who are underserved and those with the highest behavioral health needs given our Commission's independent voice we're sometimes treated as a threat because accountability, transparency, and community voice can be uncomfortable when systems are under strain. We've seen this previously and repeatedly in the last few years. During the development of Proposition 1, there were serious concerns about whether the Commission would lose independence. Last year, the Commission nearly lost the $20 million annual allocation for the Mental Health Wellness Act, which has been our longest ongoing local assistance program. And this This year, the May revise proposes cuts to two core BHS a tools that voters approved in proposition one innovation and community advocacy. The mayor revised proposal this year seems to have the same goal as last year, which is to weaken the commission and limit our ability to administer grants as per our statutory duties. Specifically, this year's proposals would not just reduce programs, they would weaken two of the BHS a foundational how we change the system mechanisms. Innovation that scales and community voice that holds implementation accountable. Starting with the innovation proposal to permanently reduce the Commission's five-year innovation partnership fund from $20 million to $10 million. Essentially, Proposition 1 fundamentally changed innovation funding in California. Prior, under MHSA, innovation accounted for about 5% of funds, which was roughly $90 to $200 million per year statewide across the counties. Under BHSA, innovation is now centralized into a statewide strategy through the Innovation Partnership Fund at $20 million, only $20 million for five years. In other words, Prop 1 already shrank innovation dramatically. The state's dedicated innovation capacity is now far smaller. So cutting innovation again would cut into the core of what the BHSA envisioned as the statewide pathway to learn what works and scale it. At the same time it made sense to bring innovation to the state level so it would remove the burden off of counties So the Commission is intended to be the state dedicated statewide innovation engine Build to test evaluate and scale solutions across regions so counties can adopt what works. It also allows us to bring forward scalable approaches for community-based organizations, tribal partners, universities, nonprofits, and the private sector, creating a funnel of innovation that does not rely solely on government to generate solutions. The immediate impact of this proposal cut would affect our current procurement. We've received an extraordinary volume of this year's Innovation Partnership Fund applications, and we are right in the middle of scoring proposals. A midstream reduction would directly reduce the number of high-quality, implementation-ready projects that can be funded. Demands and readiness are clear. Since the March 2026 RFA was released the Commission's received over 400 questions and inquiries We've held two bidders conferences with over a thousand participants and we've received over 300 applications Because we're in the middle of an active procurement. We can't disclose specific applicants or applicant details However, we can say that the response reflects the kind of broad innovation ecosystem that the legislature intended this fund to support Applicants include nonprofits counties public health departments county offices of education hospitals business other private sector entities universities research organizations consulting firms small community-based organizations faith-based organizations and tribal organizations Many of the applications explicitly specify public-private partnerships The proposals reflect a wide range of strategies to improve the California's behavioral health system. Some are focused on specific Behavioral Health Services Act priorities, while others are aimed at broader system improvement, implementation support, and innovation adoption. Notably, when the Commission conducted the early concept development to help shape the request for application, we received a diverse set of ideas showing both the demands for and the potential of this funding. These concepts range from AI-enabled tools to reduce administrative burden and improve service delivery to technical assistance and infrastructure support to help community-defined evidence practices become integrated into the behavioral health system. In fact, several departments within the administration submitted concepts for the Commission to consider. And that's significant because it demonstrates that the need for funding was recognized not only by outside stakeholders, but also the administration. In other words, state departments identified ideas and priorities they believe were worth advancing through this fund. So there's therefore difficult to reconcile that earlier recognition of the fund's value and with the proposal now to substantially reduce it just as the commission is about to make awards. A 50% cut at this stage would be highly disruptive and would significantly reduce the impact of the program. It would essentially mean that the small grant category would go from eight to four awards, moving from $4 million to $2 million, that would be impacting community-based organizations, nonprofits, and tribal organizations, because we have a specific carve-out. And it would also reduce the large grant categories from about three grants that we were anticipating from maybe one to two, going from $16 million to $8 million. And this would have real consequences. It would reduce access to funding for smaller and community-based applicants, narrow the range of ideas that the state can support, and diminish the state's ability to test, refine, and scale innovations that could improve behavioral health outcomes. It's also troubling given that this process was shaped in part by input from across the field, including hundreds of community stakeholders and departments within the administration, all of whom submitted concepts for what this fund should support. Throughout the process, the administration provided important constructive input and distributed RFA announcements to our RFA announcement to help promote this funding opportunity broadly. So to invite that level of engagement, build a funding opportunity around those ideas, solicit applications, and then cut the program in half immediately before awards are announced would send a deeply discouraging message to our applicants and our community partners. Applicants invested extensive time and resources in good faith, relying on the funding structure that the commission has published. For smaller organizations especially, that investment is significant. Cutting the program at the last moment would not just make the competition tougher, but it would pull back opportunity after the state's encouraged innovation and participation. Put simply, we're the only entity in state government looking at innovation for a broken system. Cutting this funding sends the message that the California behavioral health system doesn't need dedicated innovation support, despite the clear demand, the ongoing implementation pressures on counties, and the realities that families and communities are facing every day. For these reasons, I respectfully request that you reject the May revision proposal and maintain the full $20 million for the Innovation Partnership Fund. Moving to the advocacy proposal. So the proposal is a permanent reduction of $6.7 million ongoing to our very longstanding community advocacy program. This is essentially shrinking the voices of those, you know, who this behavioral health system exists to serve. The Mental Health Services Act was pioneering because it required transparent, collaborative planning with robust community engagement. It was nothing about us without us. I mean, that's been going for the mantra for years. Proposition 1 added a new statewide expectation for community planning and integrated county plans. And the point is not paperwork, but the point was that the right people are able to show up, understand the system, and advocate effectively so that the plans can actually reflect what the community needs. The administration's been appropriately emphasizing that Prop 1 requires a stronger, more inclusive community planning process, and that counties must meaningfully engage these stakeholders in developing integrated plans. If the state's raising expectations for county engagement, it should not simultaneously eliminate the only statewide funding source that helps underserved communities understand the system, participate effectively, and bring their perspectives forward. The community advocacy contracts are the state's practical mechanism to reach and engage underserved communities, reduce barriers, and teach people how the system works, and ensure that participation is real and not performative, so that county plans and state implementation can reflect lived experience. I'd say I'm eliminating the program would abruptly remove capacity delivered through 16 contracts serving nine underserved populations, including LGBTQIA plus diverse racial ethnic communities, veterans K through 12 clients, consumers, families, parents, transition aged youth and immigrants and refugees. And just as an example, our California Association for Veterans and Services Agencies, Veterans Services Agencies, had done some analyses on the MHSA three-year program and expenditure plans and had, under our advocacy grants that we had provided to them, in 13 counties. And while all of them had acknowledged the need for veterans, only five had actually identified veteran level programs through MHSA funding and that the kind of work that done under these advocacy grants that could and would continue under these advocacy programs if they continued There's no, like I was mentioning, there's no dedicated statewide funding that supports this type of advocacy, outreach, education, and engagement for these underserved populations. These contractors are community-based infrastructure. infrastructure, there are trusted messengers who convene community-led events, connect people to services, and provide direct feedback to improve implementation. Many of our contractors are midway through multi-year contracts right now. Elimination would halt work underway and destabilize community partners at the exact moment the Behavioral Health Services Act depends on credible community engagement. And direct services alone do not fill that gap because many people cannot benefit from services that they don't know about, that they can't access, or they don't trust. These contractors are the bridge between vulnerable communities and the systems they rely on for essential care. And for these reasons, I respectfully request that you reject the May revision proposal and maintain the $6.7 million community advocacy program. And with that, I'm going to pass over to Commissioner Gary Tsai to say a little bit more about the Innovation Partnership Grants from a commissioner and a county behavioral health perspective. Thank you.
Good afternoon, Chair Addison, members. Thank you for the opportunity to speak today. I am Dr. Gary Sy. I'm the Director of Substance Use for Los Angeles County, a board-certified physician in psychiatry as well as addiction medicine and a commissioner on the Commission for Behavioral Health. I'm here to urge you to reject the May revised proposal to permanently cut the Innovation Partnership Fund from $20 million to $10 million. From a county implementation perspective, VHSA is a major system shift occurring alongside workforce shortages, rising acuity levels, as well as increasing expectations for accountability and outcomes. Under MHSA, innovation was largely county-based, which resulted in situations where scaling across California could be challenging. The shift of BHSA to a statewide innovation strategy is important because it created a mechanism for California to better adopt and scale models that have been piloted, evaluated, and refined at both the county as well as the community-based organization level. The Innovation Partnership Fund is designed specifically to support novel behavioral health programs that can be implemented and sustained. It's also intentionally structured to bring in ideas and tools from outside government while still benefiting counties and focusing on the most vulnerable populations highlighted by the BHSA. This is exactly what California and counties need, practical solutions that can be adopted locally with evidence supporting them and with an intentional plan to scale. Reducing the Innovation Partnership Fund would not just reduce a line item, but it would also reduce what counties can realistically access in terms of tested tools, models, and best practices that address high-need populations. As a county public health leader and the chair of the Commission's Program Advisory Committee, which plays a leading role in the Innovation Partnership Fund, I'm committed to making this fund work for counties and for California. The Innovation Partnership Fund was developed with extensive engagement from community members, providers, counties, state partners to help shape the RFA that is actionable, aligned with BHSA priorities, and built for real-world implementation. For these reasons, I respectfully ask you to reject the May revise proposal and to maintain the full $20 million for the Innovation Partnership Fund. Thank you Thank you Is there anything from D Afarelio Victoria Rapley Department of Finance So first to address the million allocated for innovation partnership grants
the May revision includes $10 million Behavioral Health Services Fund for grants to private, public, and nonprofit partners to promote development of innovative mental health and substance use disorder programs and practices. Proposition 1 requires up to $20 million be allocated to the commission annually for five years. The amount included in the May revision is in alignment with the requirements of Proposition 1. In addition, for the $6.7 million related to the Community Advocacy Grant Program, with the implementation of the Department of Public Health population-based prevention activities, Many of the activities of this grant program also align with CDPH's state and local activities. This reduction also allows the state to support direct service investments.
Any questions from the dais? Assemblymember Bonta.
I want to thank both commissioners for your testimony. I think one of the most striking budget hearings that we had was last cycle, Chair Addis had a review of kind of culturally concordant here with care within behavioral health. I don't remember the specific issue, but I do remember so many people offering public comment that it wrapped all the way down to our sergeant there outside the door and down the hallway, probably outside this building. And those are people who were from tribal communities, from very diverse communities, veterans communities, LGBTQ communities, immigrant and refugee communities, all speaking to the need to be able to offer very sensitive and culturally concordant behavioral health drafted and organized in a way that was representative of their communities. My understanding of both of these funds, the Innovation Partnership Grant Program, as well as the Community Advocacy Grant Program, is that you've organized 27 members, a 27-member commission to really make sure that we have an opportunity at the state to be able to make sure that those organizations have the resources that they need to be able to blossom and to support our communities in a very deep and meaningful way. Last week we heard an informational hearing in combination with the Select Committee on Native American Affairs, the deeply troubling ongoing needs for our tribal communities to be able to address the levels of suicidality and depression in tribal communities. it's fair to say that both of those, I'm assuming, I don't know who are the grantees that have applied, but I'm very distressed at the fact that a grantee, a community-based organization, probably spent their last dollar in identifying a grant writer, putting together, you know, multiple thousands of dollars of resources to be able to make an ask of one of these two programs only to kind of mid have that potentially not be funded For what I heard and this is where I think I want clarity was many of the activities also align to support direct services and it's essentially a shift from our – to be able to do some cost savings because we can, because by statute and PREP 1, and there's an up to amount of $20 million, and we've just decided to essentially say, yeah, so what? In this budget year, we're going to mid-cycle keep you from being able to fund those very important programs. So please explain again to me the rationale by DOF to essentially defund mid-cycle, stream these grant programs through this commission?
So, first, the $20 million was originally held at governor's budget for the budget year. This proposal would decrease that amount to $10 million. The rationale for this was, in the past, the administration received feedback that there is a desire for Proposition 1 funding to prioritize core direct services as much as possible. So this redirection of funds will allow us to instead allocate funding for direct services within the 3% state-directed cap.
From the commissioners before continued response through the chair, these grant programs, the advocacy grant program, as well as the innovation partnership grant program, would you categorize that work as direct service behavioral health work?
This is, so basically, and I think there's a little confusion between what CDPH is doing for the population-based prevention, which is prevention of like stigma campaigns or opioid campaigns versus what these community advocacy grants do, which are really, they're the folks that are supporting people in the community so they can get direct services. So these are advocacy organizations that are really speaking for their populations. For example, like as I was mentioning, the veterans, you know, they can go through the plans and look and do the analysis, see who's not putting direct services for veterans into their integrated plans and then show up and advocate for those populations. So these are the voices of the population getting served to be able to make sure that the services that are being offered or provided to them are the services they want and need and that they can access them. Thank you.
So it's the voices of the community. So we're able to pierce through our state-level noise to actually hear from community what community needs around behavioral health. And that's different than a statewide campaign for suicide prevention. prevention. Yeah, thank you. For example.
Is it okay? I think he had it. Oh, please, please.
Joseph Donald's Department of Finance. So just to kind of further reemphasize some of the points my colleague made. So the overall approach of this is trying to focus the direction of or reallocating the funds to direct services. I know, you know, the commission has expressed concerns that we understand there's concerns from the legislature. And, you know, we're open to having those conversations, understanding, you know, to where technical assistance can be provided. I think I would just reemphasize, you know, the funding that would be reallocated. A lot of the programs, there's a lot of legislation. I'm at what CD pH is doing which does a consultant collaborate with the Commission with a lot of the communities that you mentioned especially tribal communities of programs that can address those very needs so While we understand there are concerns with this proposal just want to reemphasize that purpose was trying to Reallocate those funds to those direct services, but there's any other concerns or questions We're happy to take those back and continue that conversation I would just offer that.
I think we probably have different definition of what direct service means for your consideration. I believe that when a community is afforded an opportunity to outline through a needs assessment where there are gaps, where there are assets and needs assessments and where there are people and resources that can be relied upon in order to be able to organize addressing a particular behavioral health concern, mental health concern, needs of the community. That is actually a part of what needs to happen in order to be able to provide adequate direct service. And it is also in and of itself direct service. when we are hearing directly from communities around what they need. So I almost feel like the definition that has been generated by DOF is perhaps a bit too literal and is discounting the importance of making sure that people have the opportunity to claim what they need and articulate that in a way that will allow them to be able to have the capacity to support their communities. So I have questions through the chair about the rationale that's been offered by DOF for cutting these programs. And I certainly have questions and concerns about doing so midstream, mid funding cycle, as somebody who has written many a grant. Thank you.
Thank you, Assembly Member Sheryl. So I'd love to hear from the commissioners on this point of overlapping with CDPH and what's already happening.
Is that your understanding or assessment? I think it's apples and oranges. So what CDPH is doing is statewide population-based efforts. So like I was saying, stigma reduction, that's not what these our contractors do. Our contractors are in the communities working to advocate for their populations at their local planning processes. So like the annual or the three-year integrated plans now, behavioral health services integrated plans. We want community members to show up and say what they need and be able to meaningfully participate in those discussions. That's one way. That's one example of what these advocacy organizations do. But they're really in their communities, very deeply embedded in their communities, doing the work, working alongside the local boards and commissions and the county behavioral health departments to really advocate for the needs of the populations they represent.
And I would just add the work that the California Department of Public Health will be doing, as was mentioned, is population based. And so it is still focused on the community. I think that where there are similarities But how it focused on the community is different So campaigns those are population level Innovation partnership funds the advocacy work would be more targeted in terms of specific innovations specific groups that have specific interests and identified needs within the behavioral health services. And so I do think that it's a bit of a different comparison and a different way of kind of looking at that. I also would point out that direct services need not be only Medi-Cal reimbursable, right? We can also provide direct services that are not Medi-Cal reimbursable, and those also add value to the system. Yeah.
Yeah, thank you for that.
I mean, excuse me, I share the concerns raised by my colleague about the cuts to both of these. as someone who in a past life was an organizer, I know organizing all of those things, turning people out to meetings, making sure that people know how to share their stories, talking about how you can input and how the process works. All of those things takes resources. It takes money to pay organizers and staff and people who can do that, organizing that work. And I think to chair of the health committee, Ponta's point about the joint hearing that we had last week. You know, I also worked for a tribe in the 90s when mental health was a crisis and suicidality was a crisis then, and we're not figuring it out. And I think part of that is kind of cookie cutter solutions when unique communities unique solutions that fit their needs. And one of the things that I've heard from tribes both last week and on other issues is that how a lot of grant programs are not structured in a way that allows tribes to access them in a real way. And so I'm very concerned that this will cut down on hearing those issues and hearing those voices and hearing what unique communities need as chair of military and veteran affairs. Certainly when it comes to our veterans, you know, very concerned about those voices also not being heard. And, you know, and I think that if we are shifting to statewide planning and really kind of bringing this up to a statewide level, that maintaining that local input and that input from diverse communities that have different needs is really, really important. because otherwise we get back to that very cookie-cutter approach where we're just burning through a bunch of money and it's not really meeting the needs of the people who need it, right? And I think at this moment, when we don't have money to burn and we have to be very intentional about how we do it, I feel like this is, you know, certainly this is not going to balance our budget, these cuts. And, you know, I think by making sure that we're having these kinds of grants and input and programs, this helps us to be more targeted and use our money more wisely and more effectively. And I think that that is the kind of process we need to encourage right now when we have to be careful about what we spending on and how and with who Thank you. I should have mentioned this at the top.
I think this is one of those things that last year the administration came before us, tried to cut one of your programs. People were very upset. We had an agreement. Legislature put that money back in the budget. We got an agreement on the budget last year, passed it. Things were fine. Now we're back having a very, very similar discussion around cutting programs from the same commission, already knowing that the legislature didn't want to cut this program. So equally disturbed, as what I said at the top of this hearing, around having to revisit year after year things the legislature has already said no to in terms of specific proposals. proposals. I also, I just had to look back at issue four and it looks to me like the proposal is to take 211 million out of prop fund backfill the general fund with so-called behavioral health in behavior, so-called behavioral health areas while also cutting 16.7 million from a verified expense that we already know qualifies under Prop 1. So it seems the shifting of dollars, we just had that lengthy discussion around this shifting of dollars and questions that the LAO raised that we certainly are raising around, you know, do those things from issue four even qualify? Yet here under issue five, we have something we know for sure qualifies. You're taking that money away to backfill general funds. So I don't understand really the rationale of how this is helpful in the face of also putting $211 million over into general fund backfill. It's confusing to me because it's not really a savings for the Assembly members' comment. Certainly the $16.7 combined here isn't going to fill the budget gap, but also you're taking that money just to backfill general funds. it's actually not even a real reduction that would help our budget that much, particularly compared to the detriment that we're hearing here. So I'm happy to hear any reaction on that. Yeah, Joseph Dulles, the Department of Finance. I would totally hear your concerns on this proposal, and we're opening to continue this discussion in the next couple of weeks as we move towards the enacted budget. Thank you for that. Any will move to public comment on issue five. as you're coming up. Well, just a gentle reminder, if you could give your name, your organization, your position on the commission for behavioral health may revision proposals and feel free to fill that gap so we can just get the next person in. I know we all kind of give a gap there, but just so that we can get the next person up as quickly as possible. Welcome. Go ahead. Stacey Hiramoto with REMCO, the Racial and Ethnic Mental Health Disparities Coalition. I really want to thank the members for your thoughtful questions. I think you understand the issue. Out of all the places to cut of the commission, these are the last two places that we would recommend cutting. These programs give hope to underserved communities not only BIPOC but to LGBTQ the veterans youth you name it These programs give hope to the community and we just really thank you for your thoughtful questions and please reject these cuts. Thank you. Good afternoon, Chair and members. I'm Evan Fern with Disability Rights California. We strongly oppose the proposed elimination of the community advocacy program and the 50% cut to the Innovation Partnership Fund. These investments are critical for ensuring that consumers, families, veterans, and other impacted populations have a voice in shaping our behavioral health system, and that the state can test and expand behavioral health solutions that actually work. Eliminating these funds would silence community input and limit service innovation. We urge you to reject these cuts. Thank you. George Cruz on behalf of the California Behavioral Health Association. I just want to thank the committee for their thoughtful comments and questions on this specific issue, and we're also strongly opposed to the reduction of from 20 to $10 million on the Innovation Partnership Fund. Thank you. My name is Anthony Gerebaimena. I'm the program manager for LIV, and I'm here representing also our LIV partner organizations, VROC, VALA, Asian Mental Health Project, AIDS Healthcare Foundation, San Diego, Impulse Group, and North County LGBT Resource Center. LIV has supported LGBT plus communities across all five behavioral health regions in California by partnering with 14 community-based organizations to address barriers to behavioral health care, including lack of cultural competency, limited safe spaces, and inadequate access to affirming providers. Through LIV's statewide community briefing, providers, community-based organizations, advocates, and public health officials across 42 counties have gained greater insight into the needs of the LGBTQ plus community. We strongly oppose. Thank you. Thank you. I'm Shelby Gnos of Mental Health America of California. I'm also here on behalf of Stonewall Alliance Center of Chico, San Francisco AIDS Foundation, Vera Drag Story Hour, and Reach LA in strong opposition to cuts to the CBH community programs. Hello, my name is Alondra Garcia-Parris, Program Supervisor for the California Youth Empowerment Network. And on behalf of On the Margins of Sonoma County, Moss SSF from Sacramento County, Koreatown Youth Plus Community Center from L.A. County, we strongly oppose the budget cuts to the CBH Community Advocacy Grants. Kyan has served more than 2,400 transitional-age youth ages 15 to 26 across 34 California counties reaching both rural communities such as Trinity, El Dorado, and Humboldt, and urban regions such as Los Angeles, San Diego, and Sacramento. Thank you. Hi, my name is Lexal Amillo. I'm a project coordinator with the California Youth Empowerment Network, or KAYEN, and I'm also here on behalf of the Human Response Network up in Trinity County and Project Youth in San Diego County. KAYEN has trained and empowered youth leaders throughout California to influence behavioral health policy at both the local and statewide levels. Youth participants have contributed to changes in school policies, county programs, and statewide legislation, and we're in strong opposition. Thank you. Greetings, Chair and Committee members. My name is Danny Therickel with Mental Health America of California, also on behalf of Disability Rights California, Mental Wellness Center, and Mental Health Association of San Francisco. the Commission's Behavioral Health Community Advocacy Grant Program is the only funding source that ensures underserved and historically marginalized communities have an actual voice in behavioral health decision making process we respectfully urge to you protect this critical funding and the governor's May revision proposal. Preserving this program is essential to maintaining community engagement, equity, accountability, and transparency in California's behavioral health system. Thank you. Good afternoon, Chair, Committee members. Karen Vacari on behalf of Mental Health America of California. We urge you to protect both of these vital CBH funds, which go directly to the very communities that the MHSA, now BHSA, is designed to serve. Thank you. Good afternoon, Tiffany Murphy, Chief Operations Officer with Mental Health America of California, also representing our partners, Children's Partnership Project Return Peer Support Network and Youth Forward in strong opposition of the proposed elimination of these BHSA funds. These proposed cuts would create long-term and potentially irreversible impacts across California's behavioral health system. Remember, advocacy is not just focusing on the changes is needed reflective of the community serve, but also protection of the things that are working. The MHSA, now BHSA was approved by voters with the intent of funding not only direct services, but also the support of the infrastructure. Thank you. Hi there, Danny Offer with the National Alliance on Mental Illness, also known as NAMI California. Obviously you get it beyond the wildest dreams of a subcommittee. So thank you very much. Just to add that, you know, these resources have existed since the first Mental Health Services Act back in 2004 for a really good reason, that of the core six values of the MHSA, community collaboration was number one. And for families, advocacy is not just abstract. It gives us agency and a system that can often feel impossible to move. So thank you. Thank you. Hello everyone, my name is Maxime Temple. I'm here with CalVoices. I'm here to oppose item 4560 which which would eliminate funding for community advocacy grants. We urge legislature to reject the proposal and keep the community voice alive. Thank you. Good afternoon, my name is Nicole Rosendo and I'm with CalVoices. I'm here to oppose item 4560 which would eliminate funding for community advocacy grants. We urge the legislature to reject the proposal and keep community voices alive. Thank you. Hello my name is Savannah Mitchell with Cal Voices. I'm here to oppose item 4560 which would eliminate funding for community advocacy grants. We urge the legislature to please reject this proposal and keep community voices alive. Hi, my name is Virginia. I'm here with Cal Voices. I'm here to oppose item 4560, which would eliminate funding for community advocacy grants. We urge the legislature to reject this proposal and keep community voices alive. Good afternoon. My name is Grace Gallagher, advocacy manager with Painted Brain. I oppose the elimination of the community advocacy grants. I also urge you to reject the May revision cuts to community-based behavioral health services, including peer support, mobile crisis, and prevention programs. California cannot address the behavioral health crisis while cutting the workforce and organizations preventing hospitalization, incarceration, and homelessness. Please protect funding for community-based care and ensure that peers are not left behind in this conversation. Thank you for your time. Good afternoon Trent Murphy with the California Association of Alcohol and Drug Program Executives or CADPE We strongly oppose the cuts to the advocacy grant and we also oppose the reduction in the innovation funds that were explicitly put there to build up trust with the populations that we most want to center in Prop 1. Thank you. Jocelyn Farrell, Cal Voices. My name is Jocelyn Farrell from Cal Voices. I am the program coordinator for our Access California program, which is a community advocacy grant for the client and consumer population. I stand in opposition to the cuts to the community advocacy program and we urge the legislature to reject this proposal and keep community voices alive. Good afternoon. My name is Nicole Chilton and I am program manager of Access California, which is a program of CalVoices, and we are funded by the commission. Our program subcontracts with 12 agencies throughout the state who directly work with individuals receiving services in California's behavioral health system and are vital to promoting advocacy and providing direct services for community members. I am here to oppose item 4560, which would eliminate funding for our community advocacy grants directly impacting our 12 subcontractors and furthermore their community. We urge you, the legislature, to reject and keep community voices alive. Good afternoon. My name is Marona Gonefer. I'm with Cal Voices. We would like to thank you for your strong defense of the CBH grant program. Thank you so much. The legislature must reject the move to balance the budget by going after a small fund intended to enhance the voices and engagement of communities in the behavioral system. Please reject this proposal and thank you. Hi, my name is Jerick Ruiz with Ognite Filipino based here in Sacramento, and I urge you all to reject the government's proposal to eliminate the commission on behavioral health. Especially with this program, this program provides grants to culturally responsive and community led organizations that serve populations that often face barriers to accessing to behavioral health, including cultural and linguistic barriers and long lasting stigmas. Thank you. Good afternoon, Anjelka Kabande with SOMCAN. California's budget deficit cannot be solved by continuing cuts to Medi-Cal and health equity programs. That's why we say no to the governor's proposal to eliminate the Commission on Behavioral Health Community Advocacy Program. These are really important, especially for communities like my community, the Filipino community, that still has a lot of stigma around mental health and accessing that. Therefore, organizations that goes out there in the community and speaks to our folks is really important. Thank you. Hi, my name is Anne. I'm with Somcan from San Francisco. We provide direct services to mostly Filipino immigrant community in San Francisco. I am here to strongly oppose. Thank you. and other vulnerable communities on these BH issues related to Prop 1 as required by law Thank you Good afternoon My name is Andrea Mackey I the Associate Organizing Director with the California Pan-Ethnic Health Network, and we reject the cuts to the Commission of Behavioral Health. Good afternoon. My name is Lindsay Rodriguez, and I'm the health policy advocate at the Mixteco Indigenous Community Organizing Project on the Central Coast, where I live and work in Lumpa, California. I'm here to reject the elimination of the Commission for Behavioral Health Community Advocacy Program. We urge this committee to stand together with the state's most vulnerable population. Thank you. Good afternoon. My name is Alondra Mendoza. I'm a community advocate with the Mixteco-Indígena Community Organizing Project in Ventura, California on the Central Coast. I am here to reject the elimination of the Commission of Behavioral Health Community Advocacy Program. During this time of family separation from ICE, the emotional scars are left behind to our community members, and we urge this community to stand with the most vulnerable population. Thank you. Good afternoon, my name is Daisy Salazar. I am a program manager with Mexico Indigena Community Organizing Project in Santa Barbara County on the Central Coast. I oversee a prevention early intervention mental health program known as ALAS. Cutting the Commission for Behavioral Health Community Advocacy Program would pose a critical threat to our indigenous communities' well-being. Please fight to keep the BHCA program. Thank you. Good afternoon, Chair and Members. My name is Juan Carlos Diaz. I'm a community advocate with the Mixteco-Indigenous Community Organizing Project, also known as MIQAP, in Benjura County on the Central Coast. I'm here to reject the elimination of the Commission for Behavioral Health Community Advocacy Program. We urge this community to stand with the most vulnerable communities. Thank you. Thank you. Good afternoon, Chair and members. Vanessa Teran, Director of Policy with MICOP. As an advocacy organization dedicated to serving the indigenous Mesoamerican population, we express significant concerns regarding the proposed cuts to behavioral services. These reductions will directly impact two critical initiatives in our prevention and early intervention programs for mental health and domestic violence in the Central Coast. On behalf of MICOP, we respectfully urge the subcommittee to reject the proposed $6.7 million and cut to the Commission for Behavioral Health Community Advocacy Program in the May Revise. Thank you. Good afternoon, Chair and members and staff. My name is Tweedo. On behalf of the Southeast Asia Resource Action Center, I urge you to please oppose the May Revise proposal to cut $10 million from the Innovation Partnership Fund, eliminating half of this grant program, which stripped critical funding to be granted in July of this year to services for California's most vulnerable populations. Southeast Asian American organizations serving families impacted refugees impacted from the Cambodian genocide Vietnam war and secret war in Laos have applied to IPF to address the stigma language barriers historical trauma and the lack of cultural relevance care. So thank you so much for your time. Good afternoon. My name is Sangita Gautam. I am a mental health specialist at Center for Empowering Refugees and Immigrants. Our organization is funded by Commission for Behavioral Health Community Advocacy Program We reject the governor proposal to eliminate this program because eliminating this program would remove the primary way that our vulnerable communities can meaningfully participate in planning, oversight, and continuous improvement of Behavioral Health Services Act that ensures communities receive essential mental health funding and services. No decision about communities without communities. Thank you. Hello, my name is Erin Scott and I'm here on behalf of Refugee Enrichment and Development Association, RETA, here in Sacramento. I'm here to oppose the proposal to cut CBH's community advocacy program. This program is critical in engaging refugee and immigrant communities and BHSA as required by law. A cut to this funding is a cut to our most vulnerable communities. Thank you. Good afternoon, my name is Ravi Sang and I'm with the Cambodian family in Orange County. We've been serving the immigrant and refugee communities for 46 years, and the community advocacy program has been instrumental in helping smaller organizations like ours build the capacity to advocate for our communities. We've been able to have monolingual and ESL Cambodian community members submit their feedback to local three-year plans in language. Local engagement would not be possible without the community advocacy program, and we've only been able to move the needle this far because of this investment. We call on the legislature to reject this proposed cut. Hello, my name is Keikoa Lopez-Bugullo, and I'm the grants manager at the California Pan-Ethnic Health Network, and I reject the governor's main revised proposal that would eliminate the Commission for Behavioral Health Community Advocacy Program, which enables CPEN to advocate with partners statewide to inform county level BHSA integrated plans as required by law and would threaten funding midterm while community engagement for final county BHSA integrated plans are at the highest need. Thank you. Chair and members, Kathy Mossberg on behalf of the First Five Association want to share our opposition to the May revised proposal to eliminate half or 10 million of the Innovation Partnership Fund. These funds are due to go out. I know there's been discussion. This will cause great impact to the community. Certainly those we're serving was zero to five. So we encourage you to reject this proposal. And then on the behavioral health side, I'm sorry, on behavioral health side, on the public health side, we know we need more dollars there as well. So we'll work with this committee and hope we can get a few more dollars on that side as well. Thank you. Good afternoon, Chair and members. Magali Zagal with Greenberg Charg on behalf of Triple P America. Again, we align our comments with First Five Association. We strongly urge you to reject the governor's proposal for the $10 million Innovation Partnership Fund. Thank you. Michael Henning, California Alliance of Child and Family Services. The California Alliance opposes the proposed reduction to the Innovation Partnership Fund and supports Assembly Subcommittee 1's request for the rationale behind this decision. Thank you. Hi, good afternoon. My name is Maria. I represent Youth Leadership Institute, and we strongly oppose the cuts to the community advocacy program. Right now, California is experiencing unprecedented challenges, environmental disaster, new technologies like social media and AI attacks on our immigrant and queer communities. And we have never seen youth so depressed, isolated, and anxious. And we need behavioral health services that respond directly, can nimbly respond to this shifting landscape. And we urge you to reject the proposal. Hello, my name is Anu, representing Youth Leadership Opposing Issue 5, Item 4560. We urge you to reject cuts to the BHC Community Advocacy Program. I am here today as an adult ally to uplift our youth's voices. Youths are the future voices and leaders of California. Without these programs, there wouldn't be hope for youth voices to shape behavioral health policies. Thank you. Good afternoon, Chair and members. Alfredo Medina here with Annette Phelps and Phillips on behalf of the Joe Torrey Safe at Home Foundation. I'm here to urge the Assembly to reject the Governor's May revise proposal as it relates to the Innovation Partnership Fund, specifically as it relates to Joe Torrey and the kids that they serve, and to uplift and support Assemblymember Solache's $5 million budget request asked and one-time funding to support the Joe Torrey Safe at Home Marketplace program, which provides trauma-informed and mental health and prevention services to students and families. This comes at a time in which we have bridge funding needed to ensure that the continuity of care in the state continues. And while Joe Torre conforms to the new BHSA framework. Thank you. Thank you so much. And I appreciate all the public commenters for your succinctness and working with us so that everybody can have their voice heard. We're going to move to issue six, California Department of Public Health may revision proposals, and we'll welcome you forward to give your testimony. And please go ahead and introduce yourself when you are ready. Madam Chair and members, my name is Brandon Nunes. I'm the Chief Deputy Director for Operations at the Department of Public Health. Your agenda does a great job of highlighting a lot of our issues, so I'll try to be as quick as I can. For us, the 26-27 May revision includes $5.4 billion. It's a 5.6% increase from Governor's budget and includes $750 million in general fund, $4.6 billion in special and federal funds, $2.1 billion for state operations, and $3.3 billion for local assistance. As your agenda highlights, there are some basic estimate updates that we do every year. You'll see that the majority of those updates are related to tobacco revenue accounts. These are changes in revenue estimates that occur in our budget related to Prop 56 and Prop 99 tobacco revenues. And those changes primarily are impacting our Center for Healthy Communities and our Center for Environmental Health. And so you'll see a number of different changes related to those accounts. We can go into those if you like later. But we also have changes related to our various estimates for WIC and Genetic Disease Screening Program. particularly, the WIC estimate includes a $71.7 million decrease, and this is driven by a decrease in participation projects, offset by a slight increase in food inflation projections. Sorry, participation projections, offset by food inflation projections. And then for GDSP, the estimate reflects a $3 million decrease, and this is a decrease that's attributed to lower participation in our CFDNA and our neural tube defect prenatal screenings. And then for our AIDS Drug Assistance Program estimate, there's a couple things going on in that estimate. There a million increase and this is primarily driven by a funding extension for the disease intervention specialist funding that was introduced back in the 25 budget And then we have $60 million one time from our rebate fund that includes $50 million to support services for those living with and at risk of HIV, and especially for services that are impacted by the loss of federal funding. and then an additional $10 million for LGBTQ plus community centers also experiencing a loss in federal funds. There's a number of different program investments that are made in the May revision as well. A couple of them that the agenda asks us to highlight a little more specifically. One of those is what the chair mentioned in her opening remarks related to our public health information technology systems. There has been an increase related to funding for those systems, specifically $113.3 million that will go to support all of our public health information technology systems. You may recall that only Sapphire was funded at governor's budget. Now we have funding included in the budget for Sapphire, our California Immunization Registry, our vaccine management system, Sapphire as well, and CalConnect. We have funding to design, develop, and implement our future disease surveillance system, as well as funding that helps support core CDPH enterprise architecture. To help fund this, we were able to identify some special fund sources, as well as reappropriating general fund that we were saving in the current year that we're going to ask to be reappropriated into budget year to help offset some of those costs. There's an investment to go through some more of the programmatic investments. There's an investment related to sickle cell centers of excellence. $30 million general fund is included, and that's going to be $6 million a year over the next five years for CDPH to support sickle cell centers of excellence. And this will help provide treatment and health care for individuals with sickle cell disease. Another item that we were asked to kind of do a deeper dive into was the statewide paramenopause and menopause campaign. As you know, paramenopause and menopause impact more than half the population. yet symptoms remain under-recognized, under-discussed, and frequently under-diagnosed. To support this, CDPH is requesting a May revision increase the general fund of $3 million to improve provider training and increase public awareness so more Californians can access timely, evidence-based support. The funding will be used to implement a comprehensive dual-audience communication strategy that addresses both consumer-focused communications to help normalize paramenopause and menopause, validate lived experiences, and empower women to seek information, evaluation, and treatment, and provider-focused communications to improve awareness, responsiveness, and quality of menopause-related care. Let me go. If you'd like, I can, you want me to adjust and go back through the agenda item by item, or I may be jumping around on you. I apologize for that. No, you're good. You're good. Whatever you have there in front of you is perfect. Yeah. Moving over to another investment that we had is the Los Angeles County contract extension. For years now, we've been contracting with Los Angeles County to provide health care quality inspections in the L.A. County area. CDPH is seeking to extend the term of that contract for one more year or one year. The extended contract in 26 is projected to total million including million funded by Federal Resources and million funded by the Licensing and Certification Program Special Fund And that going to be an increase of million for the contract extension And this increased funding will support salary and benefit increases for L.A. County staff who are required to complete state licensure and federal recertification workload on behalf of CDPH for the terms of the contract. And for the L.A. County area in particular, the L.A. County contract has facilities in the Los Angeles County area pay for services related to that contract. There's a specific fee on facilities in that area. Moving on to the Behavioral Health Services Act state allocation. CDPH is requesting $119.8 million annually to build, expand, and operate a comprehensive prevention infrastructure, including statewide campaigns, training, data and evaluation systems, and direct support for local health jurisdictions, community-based organizations, and tribes. These resources will allow CDPH to establish a Center for Social and Behavioral Health, ensuring we can evaluate behavioral health as a public health priority, centralize and coordinate statewide strategies, manage grants and contracts, and lead suicide prevention efforts as required by statute. Funding also will support high-impact statewide initiatives, such as the new suicide prevention and 988 awareness campaigns, expansion of the CalHOPE warm line, stigma reduction efforts, and targeted strategies for young men and boys under the governor's executive order. The resources will also be provided to local communities, giving counties and partners the resources to expand prevention services, strengthen coordination with Medi-Cal and county behavioral health systems, and reach underserved populations. We were also asked to provide some input on trailer bill language that we have. We have four pieces of trailer bill in our budget as of May revision. The first item is related to SB 669, its technical cleanup. As you may be aware, Senate Bill 669 requires the California Department of Public Health by July 1, 2026, to establish a 10-year pilot project to allow up to five critical access hospitals that meet specified eligibility requirements to provide standby perinatal services as defined. CDPH is required to, in consultation with stakeholders, develop a template to collect and evaluate data and to report to the legislature within two years of the end of the pilot. So what this trailer bill will do, it's going to be able to allow us to, it's a cleanup measure that makes technical changes that will allow CDPH to more effectively implement the pilot project. Related to the AIDS Drug Assistance Program, we have a piece of trailer bill that's related to disease intervention specialists. And this trailer bill language updates health and safety code to clarify the allowable use of the AIDS Drug Assistance Program rebate fund. The amendments explicitly authorize ADAP rebate funds to support state and local disease intervention and investigation activities and services as determined by CDPH for HIV, STIs, Hep C, HCV, or MPOX, and other communicable diseases transmissible through sexual or intimate physical contact. The third piece of trailer bill that we have is related to composite distinct parts SNFs, skilled nursing facilities CDPH proposes adding statute establishing requirements for a general acute care hospital seeking to add a composite distinct part SNF to its license This proposal would require general acute care hospitals to demonstrate that the composite distinct part will improve access to care and address a specific unmet need And then finally, the last piece of trailer bill that we have is related to home health agencies moratoriums. This proposal would authorize CDPH to establish a temporary moratorium on licensure of new home health agencies, limit changes of ownership for existing home health agencies, and revise HHA licensure and disclosure requirements and require CDPH to update HHA regulations. and the purpose of the moratorium is to allow CDPH to make a thoughtful approach in revising HHA regulations and to establish requirements for HHAs that are similar to those in place for hospice agencies. I know I kind of took a high-level approach to that. If there are any items that you'd like us to dig back into, we can. Plus, we have some of our subject matter experts from the department if you have specific questions in other areas. Thank you. No, I really appreciate it. Is there anything from DOF LAO? Please. Yes, Will Owens with the Legislative Analysts Office. So just want to kind of circle back to some of the comments my colleague made at the opening of the committee. So given the state's kind of current budget condition, our general recommendation is that proposals for new discretionary spending have a particularly high bar. Now in cases of health and safety, the legislature may find those to be priorities. That being said, in instances where the legislature considers new discretionary proposals, we would recommend that the legislature look for dollar-for-dollar reductions in ongoing expenditures for those proposals, one-time or ongoing expenditures for those proposals, given the structural deficit. But with that, able to answer any more questions broadly. Thank you. Thank you. Is there any questions from the dais?
Please, Assemblymember Ponte. Thank you. I want to actually just thank the DPH for reflecting, I think, in DOF some of the aspirations and hopes that we had as it related to ensuring that we had a strong public health network given this moment in time. So particularly the health information technology systems, we know need to be in place in order to be able to ensure that California can meet the moment around infectious disease and in healthy communities. As we know, we are dealing with a different kind of reality in terms of the way in which the CDC is stepping up in that regard. So thank you for giving us an opportunity to, in all likelihood, carry more than California in that area. And very much appreciate that, as well as the funding to be able to support sickle cell centers, which was a California Legislative Black Caucus priority, and to be able to provide allocation of funding to make sure that we have an opportunity to look at any deleterious kind of events that happen within our hospitals to ensure that we are offering care in an appropriate manner. So I want to thank you for those and many other program elements here that align with, I think, what I've heard from my colleagues are important priorities for them as well. Thank you.
All right.
I'll echo those compliments. Appreciate getting to see that something we discussed not very long ago. You've already made adjustments on, and I think it certainly leaves me optimistic. I did have one question, and it's also, I think, called out in the agenda around the Prop 99 funds and the effect that this could have on California Cancer Registry? And if you're cutting funds there, if so, what kind of savings we would see?
We are looking at the reductions to Prop 99 that impact the Cancer Registry. We acknowledge there's about a $1.6 million reduction that a result to the CCR. $720,000 will be a reduction from Prop 99, and then there's an $850,000 reduction related to Prop 56. And then we're currently going through a process just assessing the impact currently.
So how will you, if you're going through the process of assessing the impact, when will you have that? When will you know what the impact is?
I think one of the things that we're looking at is the impact that some of this has is it trickles through federal funds that we receive for this, too. So that's one of the assessments that we're making and then seeing what's left to be able to support the entire cancer registry. So that's something we're working on now and could probably have something for you and your staff shortly either this week. I want to say possibly next week, but I won't need to work with Department of Finance and within the administration, too.
Okay, I do think it would be important to get that information. I know that oftentimes cancer registry really can indicate other environmental factors that may be happening. I mean, there's definitely linkage, right, between pockets of where people are diagnosed with cancer and it sort of can unwrap some other things for us to be able to have that data, particularly if we're talking only a 1.6 million dollar savings and I don't mean that's a small amount but in the scope of California's budget it's a small amount to save and we could be giving up quite a bit of important information for that so if we could get that information sooner than later as we go through the process to finalize the budget would be helpful understood with our colleagues on that. Thank you. And then one other question on the IT is if the, if, are these one time, are you looking at this as a one-time allocation? We're going to need to potentially re-discuss this next year and in out years, how we're funding the
vaccine IT programs. Please. Riley Thompson, Department of Finance. So what is proposed that May revision is a one-time investment of $113.3 million, both general fund and special fund.
Got it. Thank you. Any other questions? No. Okay. We will turn this over to public comment, if there's anyone in the room with public comment. For issue six, California Department of Public health may revision proposals. Welcome.
Thank you, thank you chair members. I'll start with thank you for highlighting the cancer registry. On behalf of the Public Health Institute, we are very concerned with this 1 or 1 rounded up cut to the cancer registry This registry continues to get cut year over year and we are very concerned about what that will mean for our federal SEER dollars that will come up for us to apply for next year. But we do urge you to reject this cut and then backfill it if you can. On behalf of San Francisco AIDS Foundation, APLL Health, and Essential Access Health, we want to thank the department for considering the use of the ADAPT Drug Assistance Fund, but we would encourage this committee, this subcommittee in the legislature, to look toward the slate of investments that have been put forward by the LGBTQ caucus. We support all of those, and we encourage you to support them as well. Thank you. Greetings. Whoops. Robert Gamboa with the Los Angeles LGBT Center. We appreciate including the In the Epidemics proposal and the LGBTQ Plus Community Center Fund in the May revise. However, we respectfully urge the legislature to untangle the LGBTQ plus community center fund from the AIDS drugs assistance program 60 million proposal. The community center fund is intended to be a flexible 35 million general fund investment to help stabilize LGBTQ community centers responding to rapidly evolving federal threats and funding instability. Only general fund dollars provide the flexibility necessary to support the broad range of services LGBTQ community centers provide across California and should not draw from HIV medication and prevention funds. Thanks. Thank you. Thank you, Madam Chair. Members, Kathy Sunderling-McDonald on behalf of Public Health Advocates, a statewide nonprofit that runs the legislative-created All Children Thrive or ACT program. We're urging adoption of trailer bill language, reauthorizing the ACT program for two calendar years, and an investment of $10 million general funds spread over three fiscal years to continue the program. Today, the act of support of policy and funding wins impacting more than 2.8 million youth and helped our partners in 31 communities secure more than $37 million in additional funding well beyond what the original legislative investment was. Thanks for your consideration. Good afternoon, Madam Chair and members. Jack Anderson with CHIAC representing local health departments throughout the state. commenting on a few items related to public health information technology systems, express support for the proposed $113 million investment for the key public health IT systems in 2627, and appreciate this subcommittee's leadership on that item. We also express support for the $18.7 million proposed investment of ADAP rebate funds for the disease intervention specialist workforce and local health departments statewide. And then lastly, related to BHSA, express support for the proposed provisional language to provide CDPH-BHSA funding to local health departments as direct allocations. Thank you. Good afternoon. Beth Malnowski, the SCO of California. On behalf of our state and county public health workers, I want to thank the state for the inclusion, the mayor's vision of the public health IT infrastructure funding, and hope this can stay in the final budget. Thank you. Bruce Palmer with the California Association of Public Health Laboratory. directors in support of CDPH public information technology systems in line with CHIAC. Thank you. Good afternoon. Glenn Backus for Drug Policy Alliance in support of the Ending the Epidemic's request for funding using ADAP funding and opioid settlement funds to fund HIV, hepatitis, STI, and overdose prevention and navigation into drug treatment and medical care. Thank you.
Thank you. Seeing no other public comment, we'll move to issue 7, which is Department of Healthcare Access and Information And we welcome you up Please feel free to introduce yourself and start when you ready And then if there are any other comments from DOF for LAO we take those afterwards
Good afternoon, Madam Chair and members. Elizabeth Landsberg, Director of HKIE, the Department of Healthcare Access and Information, joined by our Chief Deputy Director, Scott Chrisman. I'll go through two of the items, and then Mr. Chrisman will cover the others. starting with the Distressed Hospital Grant Program. The May revision proposes up to $50 million for another round of state grants to hospitals in immediate and significant financial distress to help prevent the closure of those hospitals. And I just want to briefly talk about the data that we have available to us because there has been a lot of interest in the financial stability of hospitals, which we certainly share, and I do want to level set on the data that HKI receives. HCI receives detailed annual financial disclosure reports and less detailed quarterly financial reports. Both sets of data include utilization data by payer, balance sheet statements of changes in equity, income statements, statements of cash flows and revenues by payer. There is a data lag. So hospitals are required to submit their quarterly financial data 45 days after the conclusion of each quarter and have a 30-day extension available. So, for example, the quarter that ended May 31st, quarter one of 2026, that data was due to us last Friday. Less than half of hospitals have submitted that data. So the most recent financial data we have right now is as of December 31st, 2025. We do summarize data from financial reports on our website, both by specific topic as well as longitudinal trend data by hospital annual financial disclosure report. but I just want to be clear that there is a limit on the real-time data that we do have available to us. I thought the committee would also be interested in an update on the AB 108 grant program passed earlier this month, authorizing $25 million for a distressed hospital small grant program. As of last evening, HCI has received 10 grant applications from hospitals, indicating immediate and significant financial distress. Seven of these hospitals are existing recipients of the Distressed Hospital Loan Program, and in all, the 10 hospitals are requesting $118.5 million in grant funding. HKIE is in the process of evaluating and scoring these applications over the next week based on severity of financial distress to follow up with grant awards for near-term financial support. I'm going to take out of order and talk about the Behavioral Health Services Act request from H-Chi. So we do have a BCP for $3.2 million in state operations funding to implement the Behavioral Health Services Act workforce initiative funding component. These funds will support positions and contracting services to support community engagement and coordination across various stakeholder groups, research and evaluation to support individual programs, as well as overall impacts of the initiative, and information technology enhancements to implement and accurately track data regarding the initiative. So we have been engaging in a month-long stakeholder engagement process to develop the BHSA WET or Workforce Education and Training Plan, and these resources would allow us to implement that plan. With that, I'll turn it over to my colleague for the remaining items.
Great. Thank you. Item two on the agenda has to do with the diaper access initiative provisional language This is actually a technical adjustment to correction to add identical language that is included in the 2025 Budget Act It was inadvertently left out when the 26-27 governor's budget was released in January. So the May revision finance letter corrects this oversight. On item number four, also technical in nature, the Calorex biosimilar insulin initiative reappropriation. The May revision request would reappropriate up to $18.4 million in the 2022 Budget Act until June 30 of 2029, extending for time to continue the development of low-cost biosimilar insulin under the CalRx program. Item number five is for the Rural Health Transformation Program, which we've actually discussed with this committee. This budget request actually increased spending authority for federal funds awarded to California, administered the Rural Health Transformation Program for a budget year. So this follows a current year request for authority approved by the Joint Legislative Budget Committee. So the May revision request is to increase HKI spending authority by $126.4 million one time for a total budget authority of the $233.6 million award received by the state from CMS. Also included is provisional language for an exemption from the public contract code and authority for use of a third-party administrator to meet the condensed timelines required by CMS for program implementation. Last item six, having to do with the opioid settlement fund reversion, the proposal asked to actually revert $19.6 million in the 2023 budget act. This would go to the Department of Health Care Services. This is essentially dollars that will expire if not used, and they had been appropriated for the naloxone initiative, which we were able to essentially implement without using all of those funds, and so we're looking to revert. Happy to answer your questions.
Thank you. Elio, do you have anything?
Jason Constantouros, Elio. I want to focus on two key issues for the legislature to consider on this item. The first really reiterates a point you've heard my colleagues make a number of times, which is around sort of new spending in the budget. As you've heard us say, we have a general recommendation of having a high bar for new spending in light of the state's fiscal constraints. And that if there is something that's particularly high priority to find sort of dollar for dollar reductions elsewhere in the budget to help pay for that. I did want to also note, though, that if this particular if number one on your agenda on page 19, that's the distressed hospital grant program. If this is a high priority for the legislature, you know, the administration noted that in its summary of it, that this really was meant to be a starting place and that it intends to work with the legislature. And we think there are modifications that could be added to this. For example, there could be more parameters that are added. Currently, there are sort of only two parameters, a sort of estimate of sort of how much cash you have on hand and also your sort of payer mix. But the Distressed Hospital Loan Program had many other factors that I considered that measured community need, that also looked at other measures of financial distress. And so we think that's an area the legislature could explore. The loan program also required hospitals to have a turnaround plan. And we think that could be particularly helpful given that this is one-time funding, having sort of plans for long-term financial sustainability would sort of help ensure that the one-time funding has a sort of long-term impact. The other area that I wanted to touch on It's just sort of overall budget solutions. So our office has recommended identifying more budget solutions than what's in the, on top of really what's in the May revision. And we think this could be an opportunity to revisit some initiatives that are in HKI's budget. For example, you can see there's a proposal on page two involving the diaper access initiative. So last year's budget did provide an additional amount of funding for this year in 26-27 of $12.5 million for this initiative. So this isn't a new proposal of something to agree to last year. But given the fiscal constraints in the state, that could be an example of something to look at. The sorts of things that you'll see in HKI, again, another example would be number four, the CalRx sort of reappropriation. These are not, in the grand scheme of things, the largest in proposals will be carrying Medi-Cal in a bit. Those will be much bigger sort of spending items. But it's the sort of things the legislature could revisit. and some of these smaller actions in aggregate can help sort of address, sort of get to that sort of a budget solution goal. Thank you.
Thank you so much. Do you have no? No. Okay. Any questions from members? Please. Assemblymember Bonta.
I did have just one question around the structure of this distressed hospital grant program with the $50 million allocation here, recognizing we just previously allocated in this, took early action on 25 million, and then we have an already existing distressed hospital loan program to impart to LAO's comments. We now have three different grant programs, essentially with three different criteria for implementing, for making sure that we are following through on what the grant program is intended for. Can you speak to the need potentially to streamline those programs for efficiency?
Certainly. Thank you, Assemblymember. So just to be clear, the second, the $25 million that you all just passed last week, the statute required the less than 10 days cash on hand, but we used a lot of the same criteria. So the statutory language gave us discretion to work with our colleagues at Department of Finance to come up with the criteria. So there are some standard ratios that we use, debt service ratio and the like. So we did, with our application that's posted on our website, get a lot of the same information. It's true, as noted by the LAO, that we did not require a turnaround plan with the $25 million. The first $300 million is a grant program. Pardon me, is a loan, a no-interest loan program. This $25 million is a grant program. and we didn't require a turnaround plan for the 25 million, noting that it's such an immediate program. But I just want to note that we do have standard ratios and criteria that we've been using across the program. So now we're essentially putting 75 million into this grant program, not requiring, across the two, the 50 million and the 25 million, not requiring the turnaround component for at least this 50 million. or at least the $25 million.
Is it in the $50 million? Yeah, Joseph Donaldson, Department of Finance. I think it's important to kind of contextualize the difference between the Distress Hospital Loan Program and now the program that was passed in early action as well as the proposal here at May Revise. So this current proposal that allows that augmentation up to $50 million, this is intended for a little bit different purpose, but also directed towards Distress Hospitals. of this specific program is intended to provide the short bridge assistance to hospitals that are facing really kind of immediate risk of closure right now So I think while these programs do have the intended goal of direct it towards distressed hospitals, this one has a little more of immediacy to it. But as noted, you know, with this proposal, this is a starting point for this proposal. We understand that seen as AB 108 was passed just recently, there is obviously interest by both the Legislation Administration to address this. So we're hoping that this is a starting point as we move towards the inactive budget.
Please.
I just wanted to just touch, help sort of frame the issue a little bit as well. So that, as the sort of administration noted, that $25 million sort of early action item, as it was sort of explained by the committee when it was sort of adopted, there were a couple of hospitals that had indicated they were on the path to closure by the end of this fiscal year. And so that was really the intent of that. This really is a proposal that you could think of as adding on to what the yearly action is, but that's not necessarily the same objective here. This is really meant for the upcoming fiscal year. The legislature could have a broader focus if that's a high priority for it. And we'd also emphasize that the statute does give the administration flexibility to add more parameters. But we think it's a generally good practice that the legislature adopt the sort of high-priority parameters in the statute so that it ensures the funds are being allocated as it intends. And the state's now implemented the loan program. It's now implementing the grant program. Presumably, there are lessons learned here that the legislature could use to sort of add a little more specificity on the parameters.
Thank you. I would agree wholeheartedly with LAO's comments. I think that we've had an opportunity to have this loan program in place. It's been very beneficial to distressed hospitals. We know that, as the director indicated, seven of the existing recipients for that loan program are part of the $25 million, the AB 108 grant program, and presumably 17 or the others that are in there would be reapplying. So I'm trying to hold the idea that we are in a crisis moment for sure where our hospitals, because of H.R. 1 and our own choices related to how we are funding Medi-Cal, are going to not have the resources that they need in order to be able to address their stability over a long period of time when, especially in these hospitals, many of them have very high Medi-Cal payer mixes. disproportionately high paramedics. So we're kind of sitting with that, recognizing that these hospitals are going to be in additional distress over time, and also recognizing that we did require with the initial loan program, a turnaround plan. And we're kind of seeming to bypass the turnaround plan component of this when we keep on funding through grant, through these additional grant programs, without kind of making sure that we're aligning ourselves with the requirements that we put in the loan program. So those are, I think, obviously incredibly important to fund, but I would like to see a more streamlined and more coherent approach across all three programs so that we know as a legislature whether or not we are on track to make sure that we addressing the structural concerns of these hospitals Thank you. Thank you, Assemblymember Bonta. I have a couple questions on this. The first is, are you saying, and maybe you could clarify, Are you saying it's quicker to get money to these hospitals by giving them a grant instead of a loan? And if so, why is that?
It is somewhat quicker to do it through a grant program. So the original distressed hospital loan program, we were partnering with CHFA under the treasurer's office. And so we sort of had two sets of processes we were going through. And so that does streamline things to some extent. Are there other? No, I think that's it. It's not unlike getting a loan where you're going through a loan processor, and there's quite a bit of review and approval so the grant can be expedited and we'll be administering that directly from HCI. And is it months, weeks, days?
What's the timing difference? I'm incredibly proud of my team who put up an application two days after the governor signed the bill,
and we gave hospitals a week. We got the 10 hospitals, and we plan to have recommended grants by next week. compared to what time frame on loans? It was a six-week process, and even that, admittedly, it's a shared responsibility. That was a strain on hospitals to put together all the financial documentation in six weeks' time. So to do it in a week's time was Herculean, and we're still working through those pieces. But, yeah, we're proud to get the grant pieces in, and, again, it's just a much lighter lift than a loan.
And then those seven that applied for the grant, They do have the turnaround plan because they had applied for the loan. Then how many more don't have a turnaround plan?
That's right. So every hospital that received a distressed hospital loan did submit a turnaround plan and we do get updates from them. So we do have those for the seven and the other three aren't required. So we hear the legislature and it could be something that we could add if the budget continues to include a 50 million or some other grant program moving forward. What we do ask for is an operating budget against the grants. So how are the grant funds going to be used to maintain operations and keep the doors open over the next 12 weeks? I guess that what I was wondering is could you get a turnaround plan after you give up?
I certainly understand the vital nature of getting funds out quickly, and it's something I've commented on from the dais is how frustrating it is for the public when we set up a program and we cannot get them the money out the door that we promised that we were putting in the budget. So I get the need for immediacy. One thing I'm wondering, though, is could you not, in this next round, even if there's an immediate need to get the $50 million to these hospitals, if we approve all of that, could you not ask for a turnaround plan within X amount of time after that money has been allocated so at least we could keep tabs on what's happening?
Certainly with a new grant program, we could request turnaround plans. And for those that have applied, if we make them a grant award, I mean, I just want to our finance deputy works closely with those hospitals. And we are tracking. The elements of a turnaround plan with them.
Okay I think from a transparency perspective and for the public if this has turned from a loan that we hoping to recoup as a state to tax dollars going to help hospitals stay open which we want and need for the transparency for the public to understand that yes we not going to keep giving grants indefinitely These hospitals do have plans It sounded like last time we heard this issue, there's some success for a finite number of hospitals in their turnaround plans by starting to expand services. That was a happy moment in our hearing, I would say, particularly around maternity wards. And we would want to see that more hospitals are starting to do that kind of planning if tax dollars are being used. The other question I know it's come up before is how the $25 million, that's already allocated. We voted on that. But that's compared to $118 million requested. So now this $50 million, how did you get to that figure compared to what we assume is, that probably doesn't meet the need. And I think I've heard from public hospitals have said the gap is more like 300 million, or excuse me, distressed hospital, public hospital. Does that make sense?
Yeah, just Donald's Department of Finance. So, you know, this figure included for May Revise for this proposal, as we've noted, is a starting point. We acknowledge that, you know, the need might be greater than what is in this proposal. You know as noted were you know the language is a starting point to provide either you know feedback from the legislature of what new parameters you might want to see. But you know this proposal just reflects kind of that importance of addressing this issue and that really immediacy related to this stress hospital. So, you know, to the extent that the legislature has, you know, any, you know, has any questions, you know, we can engage with that level of technical assistance.
I saw LAO looking this direction. Didn't know if there was another comment.
I appreciate that. I do think that there's widespread agreement that we don't want any more hospital closures, whether they're distressed or other hospitals in California.
And then my other question, and I know you shared the timeline with us in the prior hearing on the rural health transformation program, but I still continue to receive questions on what's happening with that program. So if you could just remind us briefly the parameters, the timing, what's happening, where that money is going.
Yeah, absolutely. Absolutely. I mean, we're happy. We've sort of built our capacity. We have, you know, both state staff working as well as professional services consulting on the work. So design is happening right now across the three initiatives, the transformative care model, rural workforce development and technology and tools. So I would expect to see, you know, in early summer, there will be released requests for applications to actually apply for a set of grant programs across those three areas. So that work's happening now, and we're on track to start launching those in the summer. We've done another stakeholder webinar since we last spoke. And again, with that, we believe there's enough lead time to take in applications, review, score, award, get through the review process and approvals, and have that first tranche of dollars committed or obligated by October 30th this year. So it's underway.
Okay, thank you. That's helpful. Absolutely. And just as a reminder, this is non-duplicative money of the public hospitals, of the – I'm mixing up my terms.
That's correct. Of the distressed hospital loan. loan, and grant program monies.
You're spot on. We had a conversation.
So we've been very deliberate with CMS that what we're calling the transformative payments for rural health, those will go to hospitals that are not necessarily meeting criteria for distress and not intended to. Those will be investments in rural health transformation that sort of serve the goals directly of the CMS program, if that sort of makes sense.
Perfect. Perfect. Thank you. And separately, because I know I'm mixing up terms here, just to clarify for the public, This is all about distressed hospitals, loans and grants, the rural transformation, the public hospitals are totally separate. I know I wove that in, but totally separate conversation. So thank you for that. I don't have any more questions. It looks like no more from the diocese. Is there any public comment for this item? Department of Health Care Access and Information Budget Change Proposal or May Revision Proposal. Welcome.
Good afternoon, Madam Chair and members. Mark Farouk on behalf of the California Hospital Association. Just want to acknowledge the inclusion of the $50 million in the grant program as an initial first step. I think the discussion here this afternoon revealed the scope of the need, given the number of applications and the dollar amount of the applications for that first $25 million that was previously appropriated in AB 108. Just wanted to say that CHA, we continue to support Assemblymember Soria's request for an additional $300 million in funding for distressed hospitals. Thank you. Good afternoon, Madam Chair. Connie Delgado on behalf of the District Hospital Leadership Forum. These are the 33 district and municipal hospitals here today in support of the $50 million for distressed hospitals. As an illustration, our members were, nine of them were the recipients of the original loan program.
There were 16 in total, which really illustrates the ongoing need that these hospitals face every day and financially making sure that they stay viable and to support the members in their community. We also want to support HKI's efforts on the Rural Transformation Program as they work to implement this with district hospitals. Thank you very much. Good afternoon. Erin Norwood on behalf of Madera Community Hospital, also in support of the $50 million additional funding. We appreciate the legislature passing the initial 25 million, and we have applied for that. But obviously, as has been discussed here, that is a drop in the bucket, and we're very supportive of the additional funding. We appreciate it. Thank you. Thank you. Thank you. Vanessa Cahina, on behalf of OCHIN, here in appreciation of HKI's partnership on the Rural Health Transformation Grants, and then on behalf of Visión y Compromiso, the statewide network of promotoras and community health workers, for our partnership with them on Pillar 1 and Assemblymember Celeste Rodriguez's budget request for $30 million to continue that work. Thank you. Thank you.
Seeing no other public comment, we are going to move on. All right. We're moving on to issue eight on Covered California. We're going to hear about the May revision proposals and the health care affordability reserve fund. So May revision proposals for Covered California and the health care affordability reserve fund. and welcome and feel free to begin and introduce yourself when you're ready.
Good afternoon My name is Angel Alonso Coronet with the Department of Finance We also here joined by today by my colleagues at the Covered California I be presenting today the three proposals included in the May revision The May revision includes $26.8 million from the Healthcare Affordability Reserve Fund in 2026-27 and $13.4 million from the Health Care Affordability Reserve Fund in 2027-28 and ongoing to augment the gender-freeming care program. This reflects an increase of $13.4 million compared to the governor's budget, which included $15 million. The augmentation aligns with available program funding, with updated costs reported by health plans. The 2026-27 amount is higher than the ongoing amount because it provides an increase in funding for two coverage years, coverage year 2026 and coverage year 2027. Ongoing years augment a single coverage year. The program design, eligibility, and cover services remain unchanged. And Covered California would continue to refine projections using cost submissions from the June 2026 rate negotiations and there forth. I can move on to the next proposal.
Okay, perfect. Moving on to the next proposal, the $1 premium subsidy program. The May revision proposes shifting the $1 premium subsidy program from the general fund to the Healthcare Affordability Reserve Fund with $20.35 million in 2026-27 and ongoing. This proposal will maintain the program in full. It supports access to reproductive health services for Covered California enrollees. This shift will accomplish two things. Provides approximately $20.35 million in ongoing general fund savings in a constrained fiscal year. And it will also maintain the program without any changes to enrollee experience. And I can move on to the third proposal. We have the state premium subsidy program. So the May revision proposes augmenting the state premium subsidy program by $110 million from the Healthcare Affordability Reserve Fund in 2027 and ongoing, bringing total program funding to $300 million compared to the governor's budget, which included $190 million. This augmentation will expand eligibility from 165% of the federal poverty level to now 200% of the federal poverty level beginning in the 2027 coverage year. The projected impact includes over 200,000 additional Californians usually eligible for a state premium subsidy. This brings total enrollees receiving a state subsidy to over 500,000 in plan year 2027, compared to over 200,000 in plan year 2026. What this augmentation would do for enrollees is for those up to 150 of the federal public level will continue to have access to premium plans Enrollees between 150 and 165% of the federal public level will receive a more generous subsidy in plan year 2027. Next but not least, enrollees between 165 and 200% 200% of the federal level will now be newly eligible for state premium subsidies. This concludes my presentation. We alongside with my colleagues from Covered California are here to respond to any questions from the members. Thank you. Is there anything from LAO? Any questions from the Dias? I have a question around each car funds and how, what's the dollar amount in each car that will be left if we approve all these proposals?
Yeah. So the projected ending fund balance for 2026, 27 is approximately 230.9 million. That's what will be left.
That is correct. In H-Carp. And is that including the loan repayment?
Correct.
Okay. So there used to be close to a billion in that fund. Much of it was less lent to the general fund, I understand. I'll say maybe over half a billion. I'll call it close to a billion. Maybe it was more like 600 million.
Yeah, Joseph Donald's the Department of Finance. So I think it's important to remember that with the revenues from this special fund, it's kind of twofold. You have the one-time repayments from the general fund. I think it's the tune of over $700 million that will be spread out over about three years. And then we have the revenue coming in from the ISRP. Flagging that obviously that revenue source is a bit unpredictable, given obviously with the changes now with federal HR1. As my colleague noted, we're projecting that with the proposals in the May revise, both with the $1 subsidy, the state subsidy program, as well as the augmentations to gender affirming care and other existing programs, there would still be a balance of $230 million.
And then what's the plan for that money? Why leave that money just sitting there?
So I think with this program, you know, we addressed, we understood the need to kind of understand how we could use this to address the population in terms of affordability. But I think there's also a need to kind of temper that with sustainability. With this program augmentation to the state subsidy program, we felt that this would provide that added affordability assistance in a way that's still sustainable if the ISRP revenues experience volatility. You know given kind of uncertainty that's kind of HR 1 and everything else affecting the state budget We wanted to put forth a prudent proposal that would be sustainable over several years rather than Create a proposal that may not be sustainable if revenues, you know adjust You know differently in the out years
What's the portion now of the ISRP versus the state loan?
repayment isn the state loan repayment closer to in the 200s I believe this year there will be a repayment I defer to my colleague to correct me but I think this year there is a repayment of about million this year
Isn't that a year of, I mean, we have a couple of years of that happening, correct? Not just this year. It'll be next year.
It's over a three-year period.
So couldn't we be able to count on $200 million for the next three years coming into this fund?
We can count those dollars. I think for, you know, in terms of developing the program, we still want to be cognizant of outside of past those one-time loan repayments. That revenue stream kind of is exhausted. Then it's just fully relying on ISRP revenue. So the real goal of this is just trying to create as sustainable of a program as possible. But to the extent that the legislature has additional feedback, we're happy to have those conversations.
I ask the question just because of this push and pull between looking at dollars on a page and then looking at real people who didn't get the health care subsidies from Congress, looking at real programs that we have to make very challenging decisions about that are real people's lives. And when you see $230 million sitting in an account that is planning for a future, I understand wanting to be and needing to be good fiscal sponsors. That's what we're here for, is to steward the taxpayers' dollars. But I also know that this program has a couple hundred million that's supposed to come into it over the next three years, that there should be some surety around that. And I do think there's folks that are wondering, you know, why not more into the subsidies or more into, you know, a different program, if that would be, you know. Thank you. Thank you. I don't have any other questions on this. We'll move to public comment for issue A, Covered California and the Healthcare Affordability Reserve Fund may revision proposals. and if you can state your name, organization, and tell us your position in 30 seconds, we'd be grateful.
Good evening. Whitney Francis with the Western Center on Law and Poverty. We support the increase in funding to expand the state premium subsidy program, which will support people under 200% of the federal poverty level to afford and maintain health coverage. We also support the gender-affirming care augmentation, but additional investment is still needed to protect access to medically necessary health care for transgender youth. Thank you. Good afternoon, Michelle Johnston, Director of Advocacy and Policy with the National Multiple Sclerosis Society. We support the governor's efforts to mitigate the harms of federal legislation by proposing a $110 million increase to the Healthcare Affordability Reserve Fund. Most individuals with MS are diagnosed in their 20s to 40s when they're getting established in their careers. Without adequate medical and prescription drug coverage, managing this disease becomes financially impossible for many individuals. Delays or gaps in necessary diagnostic tests or treatments can worsen the prognosis and may lead to serious, long-term, irreversible consequences. We ask that you continue to seek solutions to preserve access to health care for this population. Good afternoon, Diana Douglas with Health Access California. Health Access supports the augmentation for gender-affirming care and the continued support for the $1 premium subsidies. We have long advocated for state funds to support lowered costs for covered California enrollees, and to that purpose, we're deeply appreciative of the governor's May re- proposal to augment the current $190 million with the additional funds. This will stretch our current affordability efforts, which are currently used only for those at the very lowest incomes, and are showing incredibly fruitful results in terms of keeping people covered and preventing people from disenrolling in the face of all of the Trump cuts. We appreciate the Chair's remarks on ensuring that the $200 million are repaid. Thank you.
Thank you.
George Hughes on behalf of the California Behavioral Health Association. We just want to voice our support for, sorry, for the gender-affirming care augmentation and the $1 premium subsidy program. Thank you. Nicole Wardleman on behalf of the Children's Partnership, greatly supportive of the additional subsidies and appreciative of the gender-affirming care investment as well. Good afternoon, Chair and members. with Greenberg-Turig on behalf of Equality California. Strongly support the augmentation for the gender affirming care program. Thank you. Nick Luizos with the California Association of Health Plans, also in support of the state's premium subsidy augmentation for many of the reasons already stated. Thank you.
Thank you, seeing no other public comment. Thank you for your testimony. We'll move on to what I believe is our last issue, Department of Health Care Services may revision proposals. I think as you're getting settled, I know I flagged some concerns in my opening remarks, but I'll reiterate and kind of share as we welcome you up. We have had, and I hope you'll cover this, but we have had immense concern coming forward about changing approximately 2 million Californians of UIS status from managed care to fee-for-service. We're hearing a lot about that. I think actually before it was even public, We started hearing about how detrimental this could be, and I think there's a lot of questions around how would this proposal actually work in practice. It feels like this might be one of those situations where we're saying people have health care, but the system is so complicated that they're really unable to access that care. And so it looks like they have health care on paper. But really, in real life, they're they they're just not able to access it. Those are some of the comments I've heard. I'll also say at the top of the hearing, I mentioned how, you know, there were a number of items that the legislature and the administration finally came to agreement on last year. I think the administration was called xenophobic for the acupuncture proposal. People were very, very upset about that acupuncture proposal. And I think I'm actually quoting another legislator when I say that. And so I was very surprised after all of that discussion last year, the immense heartache, the final, you know, coming to an agreement to see this back in front of us again this year. Feels a little bit like regressive bargaining, to be totally honest, when you know how the legislature already feels. And then we've talked about dental numerous times. So to see you know once again to not see anything on the dental side of things I know my colleagues you know likely have other concerns We had issues around the MCO tax county resources pace reductions and other things. So with that, I'll welcome you. Thank you, Chair Members.
Michelle Boss, Director of the Department of Healthcare Services. We'll start with doing an overview of the major proposals, then discuss the proposals related to addressing the state budget projected shortfall and out years, and then dig into the updates related to H.R. 1. So as part of starting with the MCO, as part of the governor's May revision, we propose to renew our MCO tax effective January 1, 2027, that conforms with the new stringent federal requirements in H.R. 1. The budget reflects net revenue of about $575 million in the budget year, $2.3 billion in 2017-2018 and 2018-2019, and $1.7 billion in 2019-2019 from the renewed MCO tax. Funds would support the Medi-Cal program and maintain the targeted rate increases that went into effect in 2024 for primary care, maternity care, and non-specialty mental health. H.R. 1 significantly constrains states options to impose health care related taxes and prohibits taxes that assess a higher tax rate on Medi-Cal managed care plans than commercial plans or otherwise place a disproportionately high tax burden on the Medicaid plans. Proposition 35 requires the state seek a federal approval to continue a tax on MCOs on and after January 1, 2027 that is substantially similar to the current MCO tax and caps the annual non-Medicaid tax liability under the tax to $36 million annually. In order to comply with the applicable federal and state laws, so H.R. 1 and Proposition 35, the administration proposes to seek renewal of a 2027 MCO tax with two components. A component that is substantially similar to the H.R. 1 non-compliant tax authorized by Proposition 35 as prescribed and authorized under Proposition 35. A substantially dissimilar H.R.1 compliant tax authorized by the legislature that is not subject to Proposition 35. In terms of the federal considerations, the department does not anticipate this approach jeopardize approval of the H.R.1 compliant tax. CMS can deem one component of the tax permissible while deeming the other component not permissible. Our current MCO tax consists of two components. We have the AB 119 tax that is subject to Proposition 35 and the increased tax levels authorized by SB 136 and AB 160 that were authorized subsequent and not subject to Proposition 35. And from a federal perspective, they constitute one tax on our MCOs as a class of providers. From the state law consideration, the administration is following the requirements of Proposition 35 to submit a substantially similar tax, despite the likelihood of federal approval. Proposition 35 does not prohibit a tax on MCOs outside of Proposition 35. And as I just mentioned, we already have today attacks that is out an MCO tax that is outside of proposition 35. The budget scores is substantially similar dissimilar tax excuse me dissimilar tax not subject to Proposition 35 given the tax subject to Proposition 35 is not compatible which HR1 In addition, the May revision includes an additional $1.9 billion in MCO tax revenue subject to Proposition 35 in 2627. 627. And this is a payment growth related to our Medi-Cal program. The administration was tracking that these collected revenues would be greater than the 2025 and 2026 calendar year allocations. And we've came to that final number as we working towards the May revision final numbers. In addition, this number is higher than originally thought because of the higher F map that we will be getting for these rates. Proposition 35 requires that funds be spent to expand healthcare benefits, healthcare services, healthcare workforce, and payment rates above and beyond those in effect in January 2024. And this proposal meets these requirements, in addition to, because they are to support payments that are related to increases compared to 2024. Now I will turn it over to Chief Deputy Director Tyler Sadwick to discuss the transition of UIS individuals to fee-for-service. Thank you. Good evening, Chair and members. Tyler Sadwick, State Medicaid Director. The May revision proposes a transition of all Medi-Cal members with unsatisfactory immigration status from the Medi-Cal managed care delivery system to the Medi-Cal fee-for-service delivery system effective January 1st, 2027. This change is not a proposed state policy. This is required under updated federal guidance released in September. CMS clarified states cannot use risk-based managed care for individuals who have unsatisfactory immigration status and who are only eligible federally for emergency services. To clarify, Medi-Cal eligibility for these members is not changing, only the delivery system through which they receive care. Certain managed care-only benefits will no longer be available, including community supports and enhanced care management. However, some care coordination services will be available and continue to remain an option under existing fee-for-service benefits. In terms of who is impacted, this includes the approximately 2 million Medi-Cal members whose immigration status is not satisfactory from a federal perspective, including undocumented individuals, lawful permanent residents within the five-year waiting period before they are eligible to receive full-scope, federally funded Medi-Cal, and individuals who are permanently residing under the color of law or pre-call. In terms of the immediate next steps to operationalize this for impacted members, the department plans to send a general notice and a frequently asked questions material in fall of this year. We will put that out for stakeholder review and feedback, and they will be translated into 19 threshold Medi-Cal languages, including a review of readability. The department will work closely with Medi-Cal managed care plans to assess the specific care coordination needs of high risk and complex populations, review prior authorizations for benefits, and engage on overall care coordination. The department will operationalize changes to effectuate this switch in our eligibility system in late December for UIS members and for new UIS members entering coverage on or after January 1st These changes to the eligibility system do not impact county social service workload May revision proposes provisional language, which would allow the Department of Finance to augment DHCS state operations budget of up to $25 million in general fund to help support the initial transition efforts. For example, this will help the department expand capacity for state-performed functions within the fee-for-service delivery system, such as utilization management reviews, member noticing and communications, fielding inquiries from providers participating in fee-for-service, workload related to analytics forecasting and reporting. It will support the department to stand up new resources as well to effectively support this population to transition across delivery systems, such as collaborating with Medi-Cal managed care plans to coordinate care, dedicating new call center resources to help members navigate the transition and locate providers, and to develop new guidance to clarify how existing fee-for-service benefits can be used for ongoing care management. May revision also proposes $33 million in local assistance related to data system costs, such as a significant increase in the volume of claims processing under our fiscal intermediary. And just as context, system-related costs are always in local assistance. We plan to come back at governor's budget with a request for ongoing resources. These are identified to be sort of temporary to support the immediate transition. To clarify what will not change, Members who have Medi-Cal eligibility will retain Medi-Cal eligibility. Pharmacy benefits will continue to be delivered through Medi-Cal Rx. Specialty behavioral health services will continue to be delivered through the counties. This is not impacted by this new federal policy. Long-term services and supports will continue to be accessed through the fee-for-service system, including home and community-based waiver programs. And UIS members who have full scope, including dental, including children and pregnant and postpartum individuals, will continue to receive dental care predominantly through fee-for-service. The department is committed to mitigating the impact to members in ensuring a seamless transition across delivery systems through this immediate time horizon. We plan to work closely with plans on reviewing authorization data across a variety of benefits for UIS members. This is key to assess member needs and incorporate into the implementation plan to avoid disruptions across the transition in January. We're developing scripts and FAQs to support member-facing services such as call centers. We're conducting analytics to identify the extent to which Medi-Cal managed care plan network providers are actively participating in the Medi-Cal fee-for-service delivery system. Our goal is to increase the overlap of network providers that also accept fee-for-service to the greatest extent we can so members retain their trusted care relationships. For example, we're looking at the level of the county and ultimately at the level of the plan county combination in terms of which primary care providers, specialty providers, and ECM providers are enrolled with the plan and also participating in fee-for-service. We plan to use this information to conduct targeted provider outreach to encourage them to enroll in PAVE and qualify as fee-for-service providers to retain their patients and their care. We also plan to conduct outreach to ECM providers to the extent that they're fee-for-service providers today to encourage them to transition to billing to the community health worker benefit and maintain those relationships with impacted members. Turning to the fiscal assumption, the May revise assumes a reduction in 583 million general fund dollars in budget year, of which 471 million is general fund, and $1.5 billion total fund ongoing, of which $1.2 billion general fund is associated with this federal requirement. The savings models includes multiple complex factors leveraging calendar year 26 managed care data as a primary data source. There are multiple drivers in savings of these costs. There are general fund savings associated with no longer covering ECM as a benefit, 50 million in budget year, and 120 million ongoing. General fund savings from no longer covering community supports, $39 million in budget year and $94 million ongoing. General fund savings for not paying managed care non-benefit rate components, $239 million in budget year and $574 million ongoing. There are general fund costs predicted to be attributed to higher utilization of certain services in the fee-for-service delivery system, including $224 million in budget year and $539 million in ongoing. There are general fund savings projected from lower utilization of certain other services, including due to immigration-related chilling effects, including $356 million in budget year and $850 more million in ongoing. And there are additional general fund savings related to the qualified non-citizens population that H.R. 1 requires to be moved to Restricted Scope Medi-Cal. We recognize that the shift to the fee-for-service delivery system introduces new volatility into the budget and fiscal forecasting processes. We will continue to monitor cost and utilization trends for UIS members and develop budget projections based on the best available information at a point in time. Happy to provide more information at a later point regarding historical utilization trends and projected utilization, if it would be helpful. Maybe moving on to proposals in the May revision to address the structural out-year budget shortfall. The May revision includes proposals to achieve general fund savings. These proposals reflect difficult choices needed to ensure fiscal stability and preserve the long-term viability of the Medi-Cal program. We recognize these are proposals, and the administration and the legislature will work together over the next coming weeks to achieve a balanced structural budget to serve Californians. The May revision proposes to increase the monthly premiums for adults with unsatisfactory immigration status, ages 19 through 59, from $30 to $50. Estimated savings as a result of this proposal is $427 million in 27-28, decreasing to about $314 million annually in 29-30 as a result of disenrollments of individuals. The members who are subject to premiums are again individuals 19 years of age through 59, non-pregnant, not in foster care or former foster youth, and enrolled in state-only full-scope Medi-Cal. The Budget Act as was mentioned earlier imposes a premium for these individuals to be implemented no sooner than July 1 2027 The May revision also proposes to do full reinstatement of the Medi asset test no sooner than January 1 2027 and this is to reinstate the asset test to the levels of for an individual, $3,000 for a couple. Again, this proposal is being proposed in regards to addressing the out-year structural budget deficit. In terms of the caseload impacts, which was one of the questions I think that has come up. We estimate that in the budget year, approximately 25,900 individuals will lose coverage as a result of this, growing to 37,000 in the out years. This estimate is based on the assumption that Medi-Cal caseload of seniors and persons with disability would return to level seen when the departments previously imposed this asset limit. We used the LAO's estimates from last year, their report understanding recent increases in Medi-Cal senior caseload. At the time, LAO estimated that about 112,000 individuals gained Medi-Cal access as a result of eliminating the asset test. And so using that as a starting point of the population, based on preliminary data and on the partial reinstatement from January and February of this year, we assume that two-thirds of the starting population were impacted as a result of this first imposition of the reinstatement. We will look to sharing and disseminating more information over the coming months as we get more information on caseload. As the chair mentioned, the May revision also proposes to eliminate the optional adult acupuncture benefit. This would apply to all Medi-Cal members except for the mandatory populations and settings, and this would go into effect no sooner than January 1, 2027. This results in a general fund saving of $5.4 million in 2627, $13.1 million in 2728 ongoing. This would not apply to Medi-Cal members under the age of 21 pursuant to early and periodic screening, diagnostic and treatment. So our EPSDT requirements, individuals receiving long-term care or nursing facility care, individuals receiving pregnancy related services, emergency services, surgical services provided by a doctor of dental medicine or dental surgery, services provided in our FQHCs and rural health clinics and other members as identified by federal law. The May revision proposes to further cap the program of all-inclusive care for elderly, our PACE rates, proposing to cap these rates at the actuarially sound lower bound, except for a new entrance in their first two years of operation. And this would go into effect January 1, 2027. estimated general fund savings of 33 million in the budget year, increasing to 84.9 million in 2829. Our contracted actuaries develop a rate range that constitute a reasonable range of payment rates. The range reflects reasonable variation in assumptions related to benefit costs and utilization trends and non-benefit costs. In the Medi-Cal program, PACE is the only instance where the general fund routinely funds payments above the lower bound. Additionally, the May revision proposes to refine the community supports benefits. We are proposing to refine referral pathways eligibility criteria service definitions and utilization management criteria for certain community supports effective January 1 2027 Estimated general fund savings are 26 million in 2627 58 million in 2728 and about 50 million ongoing for all of our community supports We are proposed to establish standardized minimum enrollment requirements, similar to our enrollment pathway for community supports providers for asthma remediation proposing to make changes to the referral sources to come from a member's health care team, such as the primary care provider or specialist, given that this service is intended to be for individuals with asthma and for which this intervention would be medically appropriate and cost-effective. For housing transition navigation services, to the extent appropriate, adjust payment levels to be commensurate with the service intensity and discontinue or otherwise reduce payments to providers during months when no services are provided. Housing transition and sustaining services, proposing to limit eligibility beyond an initial six-month service period to the extent appropriate, adjust payment levels to be commensurate with service intensity. For medically tailored meals and our medically supportive food community support, reframe our referral resource pathways to come from, again, the members' care teams to the primary care provider or the specialists, given that this service is intended to be for individuals diagnosed with nutritionally sensitive conditions and for which this intervention is medically appropriate and cost-effective. Proposing on the personal care and homemaker services to tighten the requirements concurrent to the referral for IHSS or the in-home supportive services and authorization of additional hours approved by IHSS. And then with regard to recuperative care as part of the provider vetting and contracting process, ensure providers meet standards that align with the National Institute for Medical Respite Care Certification Standards. In terms of the enhanced care management, we are proposing to refine eligibility criteria, service definitions, and utilization management criteria for the benefit effective January 1, 2027. Estimated general fund savings in the budget year of $41.4 million, growing to about $99 million ongoing. Our goal is to drive fidelity to this model, continue to encourage our managed care plans to implement ECM as a community-based, high-touch, person-centered service as intended, and remind our managed care plans that care management models that are predominantly low-touch, remotely delivered, really were not the intent of the ECM benefit. With regard to the medical loss ratio remittance, the May revision proposes to redirect medical loss ratio remittances to the general fund. Current law directs these dollars, it's about $25 million, to the Medi-Cal Loan Repayment Program Special Fund. Now I will turn it over to Deputy Director Yen Duang to go through our HR1 updates. Good evening, Chair and Chairmembers. The May revision reflects costs of approximately $1.5 billion general fund in 2627 and reduced general fund costs of $1.9 billion by 2930. This reflects increased costs of $363 million general fund in 2027 and reduced savings of $157.6 million in 2930 compared to the governor's budget. The changes in costs reflect a higher Medi caseload retention due to refined work and community engagement data analysis and updated federal guidance for the six renewal policies as part of H.R. 1. The May revision projects H.R. 1 disenrollment of 44,000 in 2627 and 1.3 million by 2930, which is at full implementation, which reflects a decrease of 478,000 individuals in 2627 and 446,000 by 2930, which is, again, at full implementation compared to governor's budget. Specifically, the current estimates in the May revision reflect updated analysis of the number of individuals who may be eligible under the medical frailty exemptions, including folks in the waiver programs, disabled veterans, and individuals participating in the CalFresh Able Body Adults Without Dependence requirements, which is the CalFresh version of the work requirements. And as you may recall, these data points were not available during the governor's budget due to additional analysis. And at this time, states are still awaiting final guidance from the federal government on working community engagement requirements. The May revision also reflects a change to the caseload estimate associated with the new six-month renewal policy per H.R.1. This is due to updated federal guidance that the department just received in March of 26, which has modified the way we understand this policy. The updated policy will mean that California will begin transitioning individuals to the six-month kind of schedule for renewals beginning in March with the actual disenrollments as a result of the six-month new cadence beginning October 1st of 2027. so therefore there are no impacts assumed as part of budget year and only in budget year plus one. For county administration, the May revision proposes a one-time county administration augmentation of 228.7 million total funds, 171.6 million general fund in 26-27 to account for the additional caseload associated with HR1. This one-time augmentation is in addition to the current base allocation of $2.4 billion total funds. This one-time augmentation provides counties with additional support to adjust their operations and workflows as part of H.R.1 and also accounts for the refresh Medi-Cal caseload projections that I just shared earlier that shows fewer cases requiring county review because of the data exemptions we were able to do in the background for state fiscal year 2627. We will continue working with our county partners in the out years to recalibrate funding needs given the uncertainty of HR1. DHCS also proposes, as part of May revision, 33.3 million total funds, 16.7 million general fund for each year. This is a three-year limited time period for optional surge staffing contracted through the state, DHCS, to provide immediate relief to county social services agencies for ancillary workload as a result of HR1, such as call centers, processing incoming paperwork from applicants and members, and any operational tasks directed by the counties, the work by the surge staffers is not meant to supplant the county's authority to make final Medi-Cal determinations. Additionally, as part of the May revision, DHCS proposes a stronger accountability structure in response to HR1, which introduces tighter oversight of state performance and could require repayments estimated at the billions annually through various federal audit findings as it relates to timely and accurate Medicaid eligibility processing. So given the increased risk of significant federal repayment requirements, DHCS must strengthen county performance and accountability. Currently, DHCS cannot impose financial penalties on counties that are not meeting performance metrics related to timely adjudications of applications and redetermination processing unless all counties receive the cost of living adjustment in that year. The proposed changes through the administration's trailer bill would de-link the imposition of these financial penalties from the cost of living adjustment and increase and allow DHCS
to impose financial penalties in any year in which the department allocates funds to the counties in excess of the county admin base for core eligibility functions. These changes increase the state's ability to drive sustained performance improvements, creating a stronger accountability framework and mitigating the risks of significant ongoing federal requirements. Thank you, this concludes my testimony and happy to answer any questions from the committee. Any other comments from LAO? Please.
Jason Concentoros, LAO. So this is one of your more involved areas the May revision this year with many new proposals and budget solutions. We did email staff some initial comments over the weekend, and the committee has actually made these initial comments public on its website, so you can access our full initial comments there. I know it's getting late, and for the sake of time, I thought I would try to streamline a little bit some of the key messages of our analysis, but happy to expand more in the Q&A. There's really three key issues we think the legislature will want to sort of dig into over the coming weeks as it's grappling with its sort of final decisions around Medi-Cal. The first is really around assessing the estimates that are in Medi-Cal. Now, we did do an initial review of the Medi-Cal estimate, and we found that the underlying caseload and cost estimates in the estimate to be reasonable and to serve as a reasonable starting point. But there are several proposals on budget solutions where we're still working with the administration to better understand the underlying estimates. A really good example of this would be that shift from managed care to fee-for-service issue that has been mentioned a few times. If you're hoping to follow along, that's on page 23. That's number one on page 23. That's where it's described in your agenda. And fundamentally, what's going on here is the federal government had issued guidance that directed states to shift emergency care, which is in part supported by the federal government, from managed care to fee-for-service for people who have unsatisfactory immigration status as deemed by the federal government. The administration is proposing to implement that and also shift the state-only comprehensive coverage also to fee-for-service as well. And in doing so the administration estimates significant savings initially about million in the budget year and then billion general fund ongoing That summarized again at that last sentence of page 23 And the administration has conceptually described some of these estimates. They did also provide some additional information on sort of the breakout there. So we understand in concept, but we think some more information on their underlying assumptions and the modeling could be warranted, particularly given that it's a key component of identifying savings for the budget. The second area, you know, after sort of assessing the estimates, really will be to weigh the trade-offs of a number of proposals. And you've already talked about in your opening comments some of the key trade-offs here. A lot of these budget solutions raise the trade-off of helping to improve budget resiliency, but also limiting access for several groups. One that's come up a number of times, and a good example of this would be the asset limit, sort of returning to that original asset limit. That's described on page 25 of your agenda, and that's number two on page 25. And this is something that the legislature had eliminated in an effort to expand access and simplify eligibility rules. And as it was noted in our analysis, we found this was quite successful. It had resulted in more than 100,000 people gaining access to Medi-Cal and had some sort or simplified the process. The legislature, in last year's budget, instituted one to help address the budget problem, but at a higher limit than the historical one. And now the proposal is to go to that full limit. And so back to sort of the $2,000 for an individual, $3,000 for a couple. And so that's really what's sort of before the legislature is whether, the weighing the benefits of having sort of the fiscal benefits of that with the restrictions and access for that population. Another area to really weigh the tradeoffs would be the MCO tax. And here the tradeoffs are a bit different. Now, what's going on with the MCO tax is that the administration is planning to submit kind of a two-part MCO tax, one that complies with Proposition 35 and one that really complies with H.R. 1. And the reason why there's that incongruence is because the current MCO tax does not align with H.R. 1 rules. The current MCO tax imposes most of the tax on Medi-Cal enrollment and has very little tax on private insurance enrollment. And the reason for this is the tax on Medi-Cal enrollment draws down more federal funding, that when you tax private enrollment, the cost falls on private insurance, and at least some of that cost is likely shifted onto consumers through the form of higher premiums. H.R.1 has directed states to make their provider taxes proportionate. So whatever we charge on Medi-Cal enrollment, we now have to charge on private enrollment. But Prop 35 really talked about having sort of a substantially similar tax and also imposes a limit on how much we can charge private enrollment. And so because of that, in absence of a change in Proposition 35, the only option to the state would have been to reduce the Medi-Cal tax and, in effect, having very small MCO tax. So what the administration is attempting to do here is to comply with both. They're submitting a proposal for a Prop 35 compliant tax and then an H.R. 1 compliant tax that's more proportionate. With that, the budget may revision assumes that second part is really what becomes the future MCO tax. That's more proportionate. And there some mechanisms there that get quite complex but the policy tradeoff is really about what to charge the shifted cost onto private enrollment So the administration has told us that the new charge per member per month would be about And premiums are about $600 a month. That's a very rough rule of thumb. And, of course, it varies widely depending on the person. Some people have many higher premiums. Some people have lower premiums. But if you take that $600 per month as a rough rule of thumb, that $8.85 is about a 1% to 2% increase in premiums. And so that's sort of the fiscal implication there. Does the legislature want to expand more funding for Medi-Cal, but at a greater cost to private health care consumers? The legislature could have an opposite interest. The legislature could be interested in having an even larger MCO tax than what the administration is proposing, generating more money, but at an additional cost to the consumers. And that would be an area the legislature could explore with the administration to better understand how much capacity we sort of have under this arrangement. After sort of weighing the tradeoffs and getting more information, the third area we think the legislature could really focus on is weighing alternative approaches. And we've identified a few alternatives the legislature could consider. A good example here would be funding for county administration. And that is summarized also on page 25. That's number five on your agenda. And this is a proposal to provide additional limited-term support for counties to help administer H.R.1. And the concern here is with so many policy changes in place in HR1, counties could become kind of overwhelmed with implementing the new processes. And so this is intended to help provide additional support and a sort of limited-term surge in staffing. Because of that, there's a basis to consider this. Even in light of the state's sort of fiscal situation, there's a basis to sort of consider the funds. But there still is a lot of uncertainty about the exact need that we're looking at here. So one alternative that the legislature could consider is providing an initial amount, but then pairing it with opportunities for additional one-time funding, depending on sort of workload indicators that come into play. So if workload indicators were suggesting that more funding was needed, there would be authority to sort of meet with that. Another area of alternatives to consider is around the MCO tax. So the administration has proposed what is a fairly novel approach. It's a new approach that hadn't previously been considered. But there are other approaches a legislature could consider, too. For example, Proposition 35 allows the legislature to amend it with a three-fourths vote in each house. And there's a specific provision that specifically targets amending the limit on private enrollment. So doing that could be an approach to have an MCO tax, but having one that's still within the purview of Proposition 35. There's another tradeoff of doing that. Proposition 35 also directs how the state can spend MCO tax funds and gives a portion of it to provider rate increases rather than just offsetting general fund costs. The administration is proposing to have a tax outside of Proposition 35, and so it would use all the funding to offset general fund costs. But amending Proposition 35 could enable the state to really operate still within those Proposition 35 rules, allowing for some funding for provider rate increases. Exploring this approach, though, again, comes with other tradeoffs because there would be less funding for budget solution. This is a key budget solution that helps balance the budget under the May revision. So, again, that's another area where the legislature would want to consider dollar-for-dollar reductions elsewhere if it's interested in exploring something like that. And again, there could be other creative solutions too, as the legislature sort of thinks through its options here. Thank you Thank you Anything else from anyone there Any questions from members
Many? All right. Assembly members, should I? Thank you.
Where to start? So many things. So, so just since we kind of left off on the MCO tax, just so I'm clear, you're talking about a three-fourths vote to amend Prop 35.
That is something that Proposition 35 allows in the statute. There are lots of provisions in Proposition 35, and so any sort of action would sort of need to consider all those provisions. But there is a provision in there that does allow amendments to a three-fourths vote. It has to be consistent with the purposes of intent of Proposition 35. And then there is another provision that specifically, when it talks about the limit on taxing private enrollment, it says that the limit shall be in place, except for pursuant to that three-fourths vote. So there is a call out specifically in the measure there.
And would the proposals being brought forward by the administration require a three-fourths vote, too?
No. No, the proposal, the second component of the MCO renewal package would be a two-thirds vote bill. Previous MCO taxes have been a two-thirds vote bill. It's the Proposition 35 requirement of a three-fourths bill if we were to amend Prop 35. But we are proposing an MCO tax outside of the Proposition 35 framework. Proposition 35 allows the administration to continue an MCO tax without any vote from the legislature. So the three-fourths votes only needed to amend Proposition 35. So under their approach, they would submit an MCO tax that's compliant with Proposition 35 that would have no required vote from the legislature. And then there would be a second component that would require the two-thirds vote. And that two-thirds vote is a general rule for approving new taxes in the state. That's why.
Just to clarify, no other vote outside of the vote on the budget.
I mean, this is a proposal within the budget.
Right.
If the administration would be a trailer bill, that would be a two-thirds vote.
So there wouldn't be a vote on this.
It just wouldn't be our budget vote, right?
Correct.
Yes. But we wouldn't take a separate vote.
I just want to be super clear for the public that this would be voted on should the legislature choose to, you know, come to agreement with the administration.
Should we come to an agreement on what you've proposed here today? There absolutely would be a vote on this, just not a vote to amend Prop 35.
I just want to be crystal clear with the public.
Yes, that is 100% correct.
Okay, thank you, Assemblymember. And, okay.
I mean, it seems like this is, in the three-legged stool, this is a big piece of it. So I think that this is something that we just have to dive into a lot more. I, so on number five, the Medi-Cal, County Medi-Cal administration, this is something that I submitted a letter. I and some of my colleagues submitted a letter for $574 million for the county workload to have more eligibility workers. So happy to see that's included, not to the level that I requested, but, you know, room for growth. And I think is really critical to make sure that people are not falling through the cracks. So happy to see that in there. And hopefully we can bump it up. The asset test limit, I mean, I just don't even know why we're back talking about this. We already did this last year. you know, everybody had to come in and cry at the microphone. And I don't think people have time to do that in this quick turnaround this time. But, you know, we heard stories about people with disabled kids and one parent is working and one parent needs a car so that they can take their kid to the doctor or they have to have a special vehicle because of, you know, someone is in a wheelchair and they need a special vehicle for that. So like, you know, we, you, you talked about people falling off just by the change that was made this year, which is much more modest than, um, you know, than we would see if your assets go down to $2,000. Um, so, I mean, this is just, we're not fixing a structural deficit on the backs of disabled people and seniors. Like that's, this is a non-starter for me. And I think that's all we should talk about it. Or that's all I will talk about it because, yeah, we can't do that. So, and then the other concern I know is not necessarily here in the budget, but it's something that we need to figure out because it is about to sunset is around the dental piece that is sunsetting on July 1. And, you know, I'm very concerned hearing about providers just completely pulling out of being able to provide care. And I just we have to figure out how to solve this problem and making sure that these supplemental payments continue for folks. You know, this is the only option for dental for people who are utilizing these services. And if these providers disappear who already are not getting nearly what the cost of care is and out of the goodness of their heart are doing this important work for kiddos who, you know, are having, losing multiple teeth in their mouth. and is so directly connected to their health that, you know, I think that it's really critical that we incorporate that back in the conversation and really try to figure out how we do that, especially for the kids. I think it's really, really critical that we make sure that we solve for that before July 1st because people are either in or out on July 1st, and so we can't come up with a solution after July 1st because providers will already have to decide that they are out of the program. And so I think that that's something that's critical that we really figure out before the end of June So you welcome to comment on any of that I know it getting late so I trying to just wrap it all into quick comments but those are kind of the highlights from this section that I wanted to discuss.
Just to follow, we would be happy to provide kind of the estimate for maintaining the payments for dental for kids, so happy to follow up with that, just so you have an understanding for those dollars. Thank you.
Assembly member Bonta. Thank you.
I have a few questions. My apologies. No apologies. As you should. As you should. So I'll start with the MCO tax. So I'm just trying to understand. So the newly proposed kind of Prop 35 compliant, HR1 compliant MCO tax allocates no, the Prop 35, the new one, doesn't allocate any of the MCO funding for provider rate increases?
So the MCO renewal package, right, would generate $2.3 billion in new revenue. This would be an MCO that's compliant with H.R. 1. The May revision includes $2 billion of that to general support for the Medi-Cal program and then about $300 million for the 2024 targeted rate increases for primary care, maternity care and non specially, non specially mental health services. So those are the rate increases that went into effect 2024 to get to 87.5% of Medicare maintaining support for those rate increases. So that's what the 2 billion 2.3 billion 2 billion for general support of the Medi-Cal program and 300 million to maintain those rate increases from 2024. But no new rate increases. Yeah, you know, there's a bit of a nuance that I think I overlooked there. So there are some, you know, the MCO tax package currently has a number of provider rate increases. Some of those are permanent in state law and exist with or without an MCO tax in place. And those were adopted in 2024. And they basically increased certain provider rates to 87.5% of what Medicare pays. And what the administration is saying is those would continue. Proposition 35 includes other sort of provider rate increases in it that, you know, things for physician services and hospital services, and I don't have the full list in front of me, but there's an extensive list of provider rate increases. And without an MCO tax part of Prop 35 beginning in 2027, there wouldn't be funding for sort of those areas. It would be the one outside of the—it would really be the tax outside of Proposition 35. That would be mostly offsetting general fund spending. And then what does this MCO tax result in for cost to the plans that will ultimately get passed on to consumers? So for the commercial plans, as Elio noted, it's $8.85 per member per month. We anticipate that to be about a $1.5 billion impact to our commercial plans. Okay. Broken down 737 to Kaiser, 200 million to Anthem, 225 to Blue Shield. Gross.
And just so I'm clear, provider rate increases are included as a part of the proposed reform. reform?
Just that 2024 one that relatively smaller It just a few hundred million dollars But the other provider rate increases that are part of Prop 35 would would no longer be funded because there would be no MCO tax part of Prop 35 Got it. So no funding specifically going back to it would be for general fund backfill, not necessarily for anything related to health care.
So $2 billion to support the Medi-Cal program.
So $2 billion will be going to the Medi-Cal program, and then about $300 million to do those 2024 rate increases. As you're weighing the tradeoffs there, from a policy perspective, there's really a fundamental question about you're facing a lot of fiscal challenges right now and pressures to reduce spending in Medi-Cal and make budget solutions. So the more you have from the MCO tax to offset general fund spending, the more you can sort of stave off some of those reductions and preserve the Medi-Cal program. The more you put to provider rate increases, you have the benefit then of providing provider rate increases, which may be a priority for you. But the downside then is that you have less budget solution, and it could entail more cuts, including other kinds of cuts in Medi-Cal that are sort of outside of Proposition 35. So that's really the fiscal and policy tradeoff that you would face with that sort of decision.
Okay.
I'm going to move to the Medi-Cal administration.
There's – last time that we talked about this in hearing or that I was a part of, there was a very vast differential between what CWDA believed that they needed and what you all believed they needed in order to be able to fully administer the programming. and you settled on a one-time augmentation of $262 million, correct?
At Governor's budget, we didn't include any dollars, and we acknowledged that we were working with the counties and CWDA to come up with a proposal. So we didn't include anything, actually, at Governor's budget, except the recognition that we would come back at May revision. Because as the Deputy Director mentioned, we still continue to refine the caseload in terms of what we thought the impact was. And so we've significantly reduced what we project to be our disenrollments as a result of HR1, and that is all part of the calculation to assess what does county administration need in terms of some of these requirements. In particular, the six-month redetermination actually doesn't go into effect until budget year plus one, where we previously thought it was going to go into effect in budget year, but based on updated CMS guidance. So we learned a lot over these last few months, and that's where we came with kind of the refined proposal.
And would that number of $262 million be one that's, and then $33 million for the budget year plus one and budget year plus two, would that be a number that the counties would agree is sufficient to support the administration of these changes?
I know that they are asking for more. There's no question that they, yeah.
What's their more?
I think based on the County Wealth Directors Association, they've updated their requests for 2627 to 630 million total funds, 157.6 million general fund for the current year. And then for 2728, 789.6 total funds, about 197 million general fund. So we understand our one-time augmentation is lower than what they are requesting. To be specific, it is less than half of what they're requesting.
That correct Okay Less than 50 of what they requesting just so we aware May I add something very quick Sorry Megan Sabah Department of Finance I just want to add that the one nature of the proposed allocation in the May revision is also acknowledging that as Director Boss pointed out we anticipate that counties will need time to ramp up activities but also we don yet have data available so it will allow time for actual data to come in that will allow us to better assess true need
Where in the language or in the request does it actually confirm that there will be essentially a revisitation of true need? That would be part of the annual estimate process. So there isn't any language tied to the allocation itself.
Would it be feasible to attach some language to the allocation itself so that we are actually making sure that we are revisiting that in a meaningful way?
I can't commit to anything, but I can take back your comments.
Okay.
And then I do have a question about this idea of the state contract surge capacity.
So contract to me means not state employees?
Correct. That's correct. Okay. So our plan right now is essentially to hire non-state employees for various periods of time where we believe we are going to need additional resources for the county. Yes. And I think we leveraged this idea from our experience during the Medicaid unwinding. We know several counties have used very similar kind of constructs to support them for certain ancillary tasks. And the thought process is the search staffer will be a three-year limited kind of contract contracted through the state. So it's easier, and it will be kind of an opt-in for the counties should they choose to elect the use of it. And the idea is these these contractor employees will be subject matter experts on the ground to assist as directed by the counties in terms of what tasks they need to support them, because we understand with the county augmentation, it will still take them some time to recruit. And so there will be this gap period when, you know, they'll need resources on the ground very immediately to start the H.R.1 implementation efforts.
In theory, however, the Medi-Cal unwinding was temporary. There was a fixed time in which we were making a major change.
H.R. 1 is something that will exist ongoingly, and we are not necessarily setting ourselves up for being able to have the capacity to support that at the county level with this surge contract approach. I will note that even the CWDA request phases down over time. It is not as high at the end as it is in the beginning. And last week, the California Health Care Foundation came out with a report really acknowledging the importance of using surge capacity for these types of situation and kind of county eligibility processing, quick deployment of kind of resources depending on kind of the influx of the need and really federal changes. And so kind of I know other states do this as well.
I would assume that one of the reasons why there's a phase down of the number of enrollees is because
there are budget assumptions that there are going to be fewer people to actually be able to qualify.
I think that is probably CWDA's numbers. I don't know how they arrived at them.
But your numbers certainly took that into account as well. We did. Yes. And I think the
CWDA projections from a dollar perspective also took into account that there will be some familiarity with the core eligibility functions.
We understand H.R. 1 is an ongoing policy and, you know, it's here to stay at least in the next couple of years. But I think the CWDA assumptions does take into account. There will be some kind of stability throughout years.
The estimates that I've heard are that we will essentially have 80% fewer people, particularly the UIS population, on Medi-Cal over time.
So just to be clear, when we're talking about numbers, we're talking about people who will not have health care insurance of any significant sort. And we're talking about people being essentially uninsured.
But I wanted to move now to the kind of I'll just double down for the sake of time on the asset test limit and the chair's comments around progressive negotiation. And I think we were very clear in our last conversations around this, around both the rationale for why that was, in Assemblymember Schiavo's words, a non-starter for her and I think a non-starter for many of us. And so I am also disappointed to see that again on the proposal list here. I wanted to move, if possible, to the PACE programs. Can you walk us through the now, what I believe is true is that you are lowering the PACE rate cap.
What is the impact of that on PACE organizations? So the proposal is to cap the rates at the lower bound of the actuarially sound rate. And again, PACE are the only organizations that get paid above the lower bound. For new PACE organizations, we would exempt them from this rule so that they can build up kind of, you know, the infrastructure and the capacity for the first two years as a PACE organization, and then moving forward, capping it at the lower bound. So all of our other managed care plans operate generally at the lower bound rate of a managed care rate.
What is the functional impact of that for those organizations?
I don't know that we have no assessment of the functional impact. For new organizations, that's why we did the grace period for new organizations as they build up and become kind of new to the market. But in terms of the ongoing, I think traditionally our PACE plans have a higher profit margin than our other managed care plans. They get paid at a higher rate than our managed care plans because it's a dual Medicare-Medicale rate. And so I don't know that we have any particular impact.
They are also working with people who are largely elders who have very complex medical needs and health care needs, which might explain the need to make sure that they have the funding that they need. I'm very disappointed to see us going after our PACE programs and our elders and making sure that they have the ability to have the dignity of life and care in their most critical years.
If I may the rates that we are adjusting here are actuarially sound And so we are still proposing the lower bound rate to be consistent with actuarially sound rates that reflect the cost necessary to provide the care. So maybe contrasting that with some of the information
from stakeholders about the Prop 56 dental cuts as part of the 2025 budget act, where we hear dental providers saying they may no longer participate in Medi-Cal
I think it's different here because the rates are actually really sound, and to that end, they do reflect the cost of doing business, and we're not anticipating pay centers to close as a result. In just as context, we recently implemented a two-year moratorium on new pay centers because we were experiencing explosive growth in new pay organizations, including in the same market area competing for market share. So I just wanted to provide that additional context.
I'm aware of that. I wanted to move now to the components around the conversion to FFS. This is an area of deep concern for me. One basic question is, is it possible to have care coordination services, or I think you mentioned that care coordination services would still be a part of the fee-for-service model. What does that look like in actuality, and is it reimbursable?
I'm sorry, can you repeat the last part of your question?
The coordination services that you talk about that would be available under the fee-for-service models for the UIS population. What does that actually look like, and are they reimbursable? Are they reimbursable? Thank you.
So taking a step back, I think it's a testament to our times that, you know, moving 2 million Medi-Cal members across delivery systems is just one of many significant initiatives that we're tasked with implementing. I think ordinarily this would be like perhaps the single biggest thing that we're focusing on in any given year. We're taking this quite seriously in terms of thinking on the ground for members and for the providers who are treating them today. How do we make this transition as seamless as possible? So we're looking at the array of billing codes and benefits that exist as a fee-for-service Medi-Cal benefit today and seeking to really sort of lift that up, crystallize that into sort of easy-to-understand guidance so that providers understand the levers and the benefits and the reimbursement codes that are part of the fee-for-service delivery system that can support them to provide care coordination and care management. So just as an example, a new benefit that we implemented several years ago, community health worker services, is available in the fee-for-service delivery system. Our hope is that many members in managed care today who are subject to this transition, to the extent they're receiving community health worker services today, that will continue. So that should not be impacted if those providers accept fee-for-service. For members who are receiving enhanced care management today, we're doing analysis to see if those providers are enrolled in fee-for-service. And if so, we would provide them with technical assistance so they can continue providing the same type of care management and bill it as a community health worker service. There are other billing codes for other sort of office visits or FQHC visits that also support care management, and we hope to provide guidance on that as well.
some of the feedback that I've also received is that there concern that the fee for service model has essentially been fairly attenuated given the fact that we moved to the managed care model now we are moving back for UIS population and that there might be some populations entirely, like children, for instance, where we are not going to ultimately be providing the same kind of care or allowance for there to be fee-for-service for different populations or different types of service for different populations in that. So what you just talked about in terms of kind of doing the translating, again, back to fee-for-service,
how is that process going to be done? In what time frame is that process going to be done? and does it align with the deadlines for moving from the managed care system to the fee-for-service system that you've outlined? Thank you for the question, member. The first thing that I'd acknowledge is the timeline is compressed. So CMS did issue this guidance with under 12 months to effectuate this transition for 2 million members to an entirely new delivery system. So we are working at an accelerated timeline. I mentioned we plan to provide member-facing notices and FAQ materials vetted through stakeholders, vetted for readability, translated into threshold languages this fall. I'm hoping in advance of that to start conversations with our plan and provider partners to understand the type of information and guidance that would be helpful for the providers to understand the options available to them, especially with respect to care management and ensuring they can deliver the same type of care they're delivering today under ECM. With respect to children and their ability to have access to the same type of services, aside from community supports and enhanced care management, which are only available in the managed care delivery system, all other benefits remain the same. So benefits are not changing. This is really just a transition from receiving care via a health plan to being able to receive care in the fee-for-service delivery system. So benefits are not being reduced in any way.
I will hold you to that. We should all be held to it. I think I will – I might have some other questions. I will defer right now, but I think my biggest last question for now is the essential continued approach of refusing to provide legitimate care for our UIS population. We seem to be going in the wrong direction with the setting of the premiums, raising them from $30 to $50. There is no discussion or at all any kind of contemplation of whether or not it's possible to delay or defer the enrollment freeze. There is this other issue related to DentiCal and the receipt of DentiCal for our UIS population. And then of course we have the going back in on the IHSS and the kind of the asset test limit for people I pretty clear about the fact that we continue to be fine with making sure that our immigrant community or undocumented community members are not going to have the health care that they deserve. And that is a choice. Your budget speaks your values.
That is a choice that we seem to be making at this moment in time in the state of California. And I believe that to be shameful. I'll turn it over to the chair. Thank you, Assemblymember. I have a number of questions. I just want to start back at the MCO text, and just to see if I can confirm my understanding of what's happening here. So Prop 35 is going away completely. I mean, we're not going to be able to do Prop 35 anymore because of H.R. 1. Is that right?
Right. So we'll be submitting a package to CMS with a kind of an MCO that is a tax that's substantially similar to what is proposed or authorized under Proposition 35. And then another component that will be an MCO that really conforms to HR1. And so we do not anticipate that the Prop 35 version of the MCO will be approvable because it is not broad-based and uniform as LAO mentioned. And so, yeah, the new revenue would be outside of Proposition 35. And all those rate increases for certain providers that happened under Prop 35 are not happening moving forward under this new proposal. So is that the only thing I would add is that current, you know, the current Prop 35 implementation also has used a lot of those provider rate increases as a budget solution to offset general fund spending. That was a budget solution that was adopted.
People hated it.
Yeah.
My understanding is that there's some additional proposal this year around that.
So some of these sort of provider rate increases haven't sort of happened yet. But the rules were to change in 2027, and in 2027 the rules were a lot more specific about the kinds of provider rate increases. And that was sort of the long-term plan under Prop 35. And those really won't come into effect if there's no tax pursuant to Prop 35. Prop 35 will still be on the books. It'll still be on the law. This will be law, and it probably likely still will require the state to go through the motions of submitting a tax. But under the administration's proposal, the overall effect is to have a tax outside of it.
I mean, I guess what I'm getting at is the voters voted for it overwhelmingly. They thought there were going to be certain provider rate increases. HR1 came along and said, no, that's not compliant anymore. So that stuff is sort of going away, but there's this new plan with two components to it. Is that the gist that you're proposing?
Now, there's this new plan with two components. Some of it's Prop 35 compliant. All of it's HR1 compliant. So the Prop 35, we will be compliant with Prop 35 in that we will be submitting a proposal to CMS with a substantially similar tax. But we do not anticipate that that will be approved by the federal government. So we can't. We're trying to abide by state law and the federal requirements.
Okay. And then under this, do you expect $2.3 billion?
Correct.
Under both components put together?
For the HR1 compliant component.
Okay. Okay. And $2 billion will go to Medi-Cal just to general support. Okay. And $300 million for rate increases but not rate increases associated with Prop 35?
Correct. These are the 2024 rate increases that were part of the original MCO term sheet.
And so what happens to those folks that thought there was a rate increase in the future for them?
So we've been very clear through our stakeholder engagement with Proposition 35, I've given HR one that the kind of the, these rate increases. So we have 2026 uniform dollar rate increases that will go into effect. We've been very clear with stakeholders that this is really only till the end of 2026. These were not ongoing rate increases given what we knew with the kind of the federal changes prop 35 passed before.
I mean,
HR one completely changed the kind of the universe in this space. And so we did not have any understanding for what this might mean when we passed when pop 35 was passed.
Did you have something?
Well, I was just going to add that, you know, proposition, just as a reminder that Proposition 35 does have that three-fourths vote provision to amend it. And that, you know, with any sort of measure, what the intent is is always somewhat debatable. But arguably that mechanism was in part intended to address things where there were changes in federal rules. And so that is a provision in Proposition 35. So if the interest is to preserve kind of that structure of Proposition 35, there could be alternatives to consider. But again, it's because this is a key budget solution meant to help balance the budget, that's also the fiscal tradeoff to weigh in terms of the offsetting general fund versus more provider rate increases.
I'm just thinking of that person who comes to us and says, I voted for you, but Prop 35 on the ballot. I voted for it. I thought X, Y and Z was going to happen. What's happening? I mean, the federal government passed H.R.1. And so these providers that thought they were going to get a rate increase aren't necessarily going to get a rate increase, just these four groups.
They will have their rate increases maintained since the 2024 rate increases.
Just these four groups, though.
So primary care, maternity, and non-specialty mental health.
Yeah, or three groups. Okay. I'll align my comments on the asset test. So I do have a question. How many people will lose Medi-Cal from the time there was no asset test to the if we enacted the 2000?
So we anticipate about one hundred and twelve thousand total. That's what that was kind of the LAO. And we agreed with the assessment of about that many individuals were able to gain access to Medi-Cal with the.
That's from the no asset test to the $2,000, not from the $130,000.
Yeah.
Okay. All right. And I'll just reiterate, I like my comments. I just, these are the people that are most in need. I mean, we had, you guys saw the hearings last year. People showed up and said, if you do this, I'll probably die. And they came with interpreters and on oxygen and, you know, on communication support devices. It was just super. It was probably one of the worst things I think that we sat through in terms of the amount of pain that a proposal like this would cause to everyday people. and I think people that many of us can just think of someone in our lives or someone in our friends and family's lives that Would no longer have health coverage and I I was just kind of astounded to see this That probably an understatement really I was astounded to see that this is the proposal that coming back to us after all of that that we went through last year and finally reached agreement after lengthy, lengthy conversation. I think on the PACE, you know, you heard extensive questions. I know one of our committee members has talked about the benefit of PACE to his dad and how wonderful that program has been. And I think the core question is, will that member's father still be able to get services at PACE? I think that's what it boils down to when we ask these questions around PACE. So will people lose services?
I mean, I think as Chief Deputy explained, these are actuarially sound rates, and they get certified based on the ability that these dollars can cover the benefits and services that are being provided.
So we don't know. It sounds like we don't know. Some of us are saying, actually, that means, yes, they have all those services.
I mean, I think kind of from a stewardship perspective, right, we want to pay our providers only what it takes to provide those services because every other dollar could be used for another purpose. And if our actuaries certify that these services can be provided at this rate, we would think that they can be provided at that rate, and we would want to use every other dollar to avoid any other cuts.
Okay. And then on the dental, have you calculated out the cost of emergency care for dental, like what that's going to do if we're moving to this fee-for-service model in Medi-Cal? People, if they don't have dental care, they're probably going to go to the emergency room. We're going to have a fee-for-service for those emergency room visits. I'm just wondering, and we've talked a lot in this subcommittee about the cost shift. So if we cut health care from people in one area, where are we shifting that cost to? Each time we ask the question, though, we really haven't gotten answers, right? So dental care is set to go away. We know when, for instance, if kids have a – the rates are set to go away, right? Not dental care overall, but sorry, the backfill of Medi-Cal dollars for the rates. The dentist will say, though, however, that those dentists will no longer take Medi-Cal, which in essence in real life will mean that that dental care coverage will go away for those folks, right, if they lose their dentists. If nobody will take that coverage because the rates are too low, you extrapolate that out to people losing dental coverage. That's where that statement for me comes from is hearing this concern in the field that dentists will no longer take Be able to take this because the rates are not worth taking anymore Therefore those patients are likely to be seen in emergency care We are now moving to a model right where we're going to be using this fee for service and I'm wondering what the cost is going to be around those patients being seen in the emergency room.
So we have not estimated any increase to managed care or fee-for-service related to a change in the dental rates. As we mentioned a few hearings ago, we are required to submit to CMS by the end of September kind of our assessment based on stakeholder concerns kind of the feedback that we hearing once we do our public notice related to these And so all of this will be considered as part of that Because I think this committee has asked numerous times for how do we get what it going to cost to cut care
We understand the numbers in the budget and what it looks like on paper, but we've never received the information on the cost shift of people who still are going to go somewhere to get health care. And so, you know, we've been asking for months, actually. When a proposal is presented to us on the budget savings, where's the estimate of what that will cost?
We have not completed an estimate on what that might mean. We do not know what it will mean to the dental providers and how many providers may or may not choose to maintain access for Medi-Cal members. We don't have that information. Or to the emergency room if they have to see people through the emergency room because they no longer have care coverage, you know, preventative care covered, whether it's dental or any of these other proposed cuts.
Right.
Right. We do not know how many dental providers will no longer provide dental services for individuals and what that might mean. We don't have that information.
Okay. So my last questions are really around this limited time full scope coverage for certain qualified non-citizens. So folks are going to be moving from full scope to restricted scope. Medi-Cal, let's start there. I'm looking at page 24, number two. Okay. So, and you've postponed that, which I think is very humane, to July 1, 2027. But this includes refugees, asylees, certain victims of trafficking. So these are people who are here in the United States legally that will basically only be able to get emergency care coverage.
So this is related to the provision in H.R.1 related to qualified noncitizens and the federal government changing the definition of who is eligible for full scope federally funded Medi-Cal. They made this change. It goes into effect October 1, 2026. At Governor's Budget, the administration proposed to move about 200,000 individuals from full-scope Medi-Cal to emergency services only, reflecting a significant cost to support a full-scope coverage care. And just given the state's fiscal situation and this imposition by the federal government, that was the proposal that came out at Governor's Budget. As part of May revision, we're proposing to delay that transition to restricted scope until July 1, 2027, and maintain full scope until that time.
Okay, and within this is a provision, I want to check my understanding with you, that folks that need dialysis, who right now should be going to clinics for sort of maintenance care for their dialysis, will no longer have those services covered. If they need dialysis, the only place they'll be able to get that care covered will be in an emergency room. And that that is going to affect refugees asylees certain victims of trafficking undocumented individuals or you know people who are affected by the Medi freeze who lose their Medi-Cal because of the re-enrollment provisions, folks who have been here less than five years, none of those folks will be able to have their dialysis covered through a clinic as they do now or were able to. the only place they can get dialysis is in the emergency room?
Yes, Chair. This is also due to recent direction from the federal government. Our federal oversight entity, CMS, clarified for us as part of our ongoing financial management review that initiated in 2020 and continues to this day regarding our state-only expansion programs for individuals with unsatisfactory immigration status. Historically, we had covered outpatient renal dialysis as emergency care, and we defined that as emergency care, and we drew down federal funding because we understood it to qualify for emergency services that are federally eligible. Last year, as part of this ongoing review, CMS directed us to remove dialysis from the emergency benefit. And so it is no longer included in the restricted scope benefit. And for that reason, individuals as a result of H.R.1 who lose satisfactory immigration status and are considered unsatisfactory for a full scope federally eligible Medi-Cal when they are shifted in July to restricted scope, they will lose access to dialysis outside of emergency settings, again, pursuant to federal requirements.
So there seems to be disagreement in the field, and there seems to be concern in the field around when and how this was communicated, and if this has been fully digested by the field. I'm looking at my colleagues' faces who, you know, clearly this has not been communicated very much. What I'm hearing from the field is that it was just communicated in a webinar in February of 2026. I don't think most legislators understand the depth of this. And there seems to be disagreement around whether it's an HR1 requirement to remove that coverage, or it's an HR1 situation to put more parameters around how that coverage is provided. And can you add clarification there?
Thank you, Chair. So this is the change on whether CMS considers dialysis to be part of the emergency Medicaid benefit is unrelated to HR1. It has been communicated to us via this ongoing financial management review that has been in place for half a decade as part of CMS's efforts to ensure appropriate federal claiming for this expansion population. So it's happening under this administration. It's separate from HR1. CMS communicated to us in late 2025. So we did issue guidance recently, had webinars recently, and are still working through sort of the full impact, including through managed care rates.
And do we know what the savings would be or the expense will be from the I would agree with my colleague who's saying over here it's going to be more expensive, but do we understand the financial impact of not covering dialysis, which my understanding of dialysis is it has to happen regularly, not just on an emergency basis. and it really is a life-saving procedure that has to happen on a regular basis and that it will be more expensive to get this regularly needed care through an emergency room. And do we know the cost of that?
I don't have that offhand, but we can take that back and calculate it. I think part of the calculation would be, and this is a little bit perverse, but just in terms of calculating the impact in an emergency setting, federal funding that matches would be available, whereas in an outpatient it would not be. But we can take back that cost impact.
Okay. And then just to be clear, just so I can really understand this, this is not about HR1. It's about a CMS guidance or CMS requirements.
It's two things happening in concert. Just with respect to the specific issue about whether dialysis is covered under emergency Medicaid for which federal financial participation is afforded for individuals with unsatisfactory immigration status, that is recent direction from CMS as part of our ongoing financial management review, in effect an audit. So that is direction from CMS. I think the broader context is that H.R. 1 removed satisfactory immigration status for 200,000 people who will be newly confronted with this policy change from CMS.
Okay, and we don't have a dollar figure on what it's going to cost or save, which is, it's nebulous at this point.
Not at this moment. We can follow up.
Okay. Okay. My last is more of a comment. I feel like as many things as, and I said this at the top of the hearing, I do feel like progress was made in terms of what the administration has brought us since our last hearing, actually. I think there were some things put back in for May revision that the legislature had clearly expressed were problematic. However, this proposal continues to really harm seniors. The asset test, seniors and people with disabilities, I think about the asset test. I think about those quality assurance payments, the WQIP that I mentioned at the very beginning that really is centered around making sure that we have quality insurance happening in our health facilities that are taking care of people who are recovering and seniors. I think about so many of the other pieces that were really harming seniors and people most in need when it comes to health care. I'm looking at some of the shift. I think there's a shift in here of Medi-Cal dollars into the general fund. It's about $12 million. Somewhere in these proposals that would be coming out of Medi-Cal and backfilling the general fund. So it just seems like there's a lot in here that really targets, again, we talked a lot about UIS population, But we haven really talked too much about who is the UIS population and what it you know on a on a very human level who are the people that we targeting And the more I dig into this it the elderly and the people with disabilities that we're supposed to be taking care of. So it's a pretty difficult proposal to digest, I would say, and I think it's going to take a lot more work in the next couple weeks. And I don't know if any of this has raised questions that the two of you, you're welcome to Assemblymember Shabo and then Assemblymember Bonta. I mean, that dialysis conversation is
blowing my mind that the best plan that our federal government has decided is that we should fill up emergency rooms with dialysis patients. This is bonkers. That is crazy. And that is so expensive. This federal administration who supposedly cares so much about waste, and they're about to force us into a situation where we are wasting the most expensive way to provide care to people who need life-saving care on a regular basis, multiple times a week, many people are supposed to go sit in an emergency room and probably wait for hours. Our emergency rooms are going to be a disaster with this kind of policy. And I have to point out, again, that there are no Republicans in the hearing, just like the last one and the one before that and how many hearings on H.R. 1 and the impacts of this big, deadly bill. We should start calling it the big, deadly bill because this bill is literally going to kill Californians and Americans with the policies that they are putting forward and the directions of this federal administration. the idea that we are going to do life-safing regular treatment for dialysis patients in emergency rooms that are already overrun is crazy. That is the most ridiculous thing. I can barely even believe it.
Yeah.
Maybe I should add another comment is what we hear from the field is that 21 other states are not going to manage their medical programs this way. That 21 other states are going to continue to include dialysis care through clinics as a covered benefit. I don't know if you have information on that or if that's accurate. If it is accurate, why wouldn't we do something that way? And what's the cost analysis on that? You have to figure out another solution. I mean, this is, you know, obviously there's a population that the federal government loves going after, but it's also victims of trafficking. This is who we're going to stick in our emergency rooms day after day to get dialysis. among other people needing urgent care who got shot or have broken legs That where we want to stick our dialysis patients Yeah we should definitely figure out another solution to that That's insane.
Thank you. Assemblymember Bonted.
Thank you. Ditto everything that was said by my colleagues and the chair on that issue. I did want to just turn to where this proposal seems to be deadly silent. One is around indigent care programs, and the second is around uncompensated care. So we know that people will, because they are going to be kicked off of Medi-Cal because of the work requirements and the redeterminations, that many people will now be captured in an indigent care program, many of which, all of which I believe at the county level have essentially been captured. decimated. What is the budget solution to be able to support counties in provision of indigent care?
So the May revision does not include any additional resources for county indigent care programs. I mean, as we just testified, we are actually proposing reductions to the Medi-Cal program given the general fund shortfall and out years. I would note our updated HR1 numbers do reflect a decrease in the number of individuals we think that will be in disenrolled compared to governor's budget. So while, you know, reflecting that there will, we estimate about 44,000 individuals will lose coverage in the budget year. That is, you know, we were at about 400,000 prior to that. So reflecting just kind of some updated numbers in that space, but we do not have any budget proposals related to county internet care.
Okay, so 44,000 in this budget year, but let's look a little bit to budget year plus one.
Sure, 1.3 million in out-out years.
We know that those – so what's that number?
1.3 million in 2930, I believe it is.
Okay. So 44,000 plus 1.3 million. Or in total 1.3 million.
1.3 million in 2930 is where we think the numbers will land.
And budget year plus one? Sorry. because several of these proposals consider this budget year and budget year plus one.
Sorry. So budget year plus one, we're looking at about 822,000 individuals at full implementation.
So, sorry, I couldn't hear. So $44,000 this year, budget year, and then sub $1,822,000 in budget year plus one, who will fall out of Medi-Cal. As a result of HR1.
As a result of HR1.
And we have no plan or consideration for anything related to indigent care in this budget year or in future budget years.
We have no proposals. Again, we are proposing reductions to the Medi-Cal program as part of my revision.
Okay. Well, just because you don't have health care doesn't mean that you don't deserve to be healthy and won find yourself in a place where you actually need to be able to have care So it deeply concerning to me that we have no plan at all for any solution around indigent care And then my second question was around uncompensated care So, again, we know that people will end up hitting the emergency rooms, and now we have the added layer of knowing that that will happen for our dialysis patients. So have we made any provisions at all for anything related to uncompensated care?
To my knowledge, the May revision doesn't include any proposals around uncompensated care.
I think we vowed to at least try to figure out how to avoid some of the minefields that HR1 has brought us. And it seems to me not a holistic approach to not speak at all to the rising need that we know will come with indigent care or to have a better understanding of the costs associated with for those items that will be considered uncompensated care, those service provisions that will be considered uncompensated care and the impact that that will have. I think my biggest concern is that we are myopically thinking about the impact to the general fund. That is the job as it has been laid out. But it is so myopic that it doesn't allow us to be able to consider the incredible destabilization to our overall health care system as a result of the decisions that we are making now. So we can offer an additional $50 million to our distressed hospitals this year. And next year, we can look at that number needing to be $250 million or $350 million because we have failed to figure out how to address some of the structural challenges that we know our healthcare infrastructure will be facing as a result of, yes, HR1 for sure, but certainly some of the decisions that we are making in this moment in time that is within our control. So I'm looking forward to the ongoing conversations that I believe we need to have to make sure that we're providing a whole picture of what will be happening and what kind of impact that individuals will have and how it will impact our clinics, our hospitals, our public hospitals, and particularly our emergency rooms in the coming years. And I very much hope that when we present any requests for funding beyond this year, as many of these provisions do, that we also do that in areas with specificity around the number of people that will be losing Medi-Cal. I think we are being asked to make a Solomon's Choice here, and we are not being good stewards if we don't also consider the number of people and the kind of care that they will lose as a result of the decisions that we are making this budget year and over the next several years. So I'm hoping that we can always have robust conversations that include all of those points, because these are not numbers we're talking about. They're people's lives. And I thank you for a very tough conversation about this. and being willing to continue to have these tough conversations as we try to figure this out.
Chair, if I may, Andrew Hewitt, Department of Finance. I just want to note that counties do receive $1.2 billion in realignment allocation for budget year for 2026-27. So that would be $1.2 billion to provide that health care for the aging population. I want to note that $1.2 billion is provided for that purpose in the 2026-27 realignment allocation. it's part of their, their annual realignment allocation.
So we just wanted to know what the, the size of the allocation is for budget year, just, just for context.
Yes. So just following up on that, it's for the health sub account, which is also inclusive of, of counties, current operations. So inclusive of their current both indigent care and public health operations. So not necessarily, it doesn't account for increased indigent care demand, but just rather their kind of current allocation.
Apologies.
So what I think I just heard was a number of $1.2 billion being allocated for realignment. but then an acknowledgement that that realignment actually doesn't consider the increased projections for the indigent care population that counties will have to include in their services. I'm combining the two statements to try to reconcile them at this late hour.
I would say that the $1.2 billion, yes, is the annual allocation, but it does not represent an increase in the allocation as a result of the current budget package.
Okay, so my comment still stands then. We really have not accounted for the impact to indigent care. in these proposals. Seeing nothing else from the dais, I do want to say thank you, and also to every other panelist or every other witness that has been up to testify. I know we sometimes have tough questions, tough tones. It's not a reflection of you, but obviously we have trouble with the proposals. So thank you for bearing the brunt of that. I know that just as humans, you're not the only ones responsible for this. So just appreciate your decorum with that. And I know it's hard for all of you as well to go through all of this. So appreciate your time. We'll move to public comment. Obviously, you're welcome to stay. We'd love for you to stay and hear the public comment. I think there's a lot of it. So I'll just say if you could state your name, your organization, your position on item number nine, which is the DHCS May revision budget proposals. Hopefully I've said that correctly. The DHCS May revision budget proposals and welcome.
Good evening, chairs and members. My name is Simon Vu with the California Behavioral Health Plenty Council So we are majority consumer family member advisory body with federal state mandate to advocate for individual with serious mental illness Urging you to reject the proposal to eliminate the statewide Medi-Cal mobile crisis benefit. Mobile crisis team are an essential part of our crisis system with 44% of adults engaging in treatment within 30 days. These services reduce unnecessary hospitalization, 5150 holds, and law enforcement involvement. And making this benefit also will force many counties to cut services for children, youth, and adults. Thank you.
Thank you.
Thank you, Chair and members. I'm Kate Ladish, President of the California IHSS Consumer Alliance and a Yolo County Benecal and IHSS beneficiary. SICA is gravely concerned about the governor's draconian asset limit proposal, which would single out older adults and adults with disabilities for the $2,000 asset limit, rather than the $130,000 for other Medi-Cal beneficiaries. It's dangerous, discriminatory, and divorced from people's ability to pay for essential care. If enacted, vulnerable Californians will lose care, leading to worsening health, increased homelessness and institutionalization, and needless deaths. Without health care, I will die, and that death counted as a budget savings. It's straight out of Dickens.
Thank you so much for voicing opposition to this.
Chair Gonzalez, on behalf of my clients, the American Diabetes Association, as well as the Bleeding Disorders Council of California, we are deeply disappointed by seeing the asset limit test and the governors may revise.
we strongly oppose reinstating a $2,000 asset limit. I don't know how you avoid homelessness in this state if you can't have more than $2,000 in your bank account. The average rent in this state is $2,200. The $2,000 asset limit test goes back to 1989 when the rent was $590 in this state. Thank you.
Thank you. Thank you very much. Vanessa Hina on behalf of the California Academy of Family Physicians.
We really appreciate the discussion we've had today. There are some bright spots in this budget, including HR1 navigators, increased county eligibility funding, and planning around the MCO tax. But there's a lot to be discussed further, and I believe that Assemblymember Bonta's comments about where's the discussion on indigent care? As family physicians, how do we then recenter primary care in this? what's going to happen with all of that. That is the out-year discussion that we absolutely need to be having. We can't go back, but the big deadly bill is making us go back. We really appreciate the staff work on this. Thank you. Good evening, Chair and members. My name is Carly Holko with the California PACE Association. We respectfully urge the committee to reject the additional cuts to PACE rates and the proposal to move UIS individuals out of PACE and into fee-for-service Medi-Cal. The additional cuts threaten the workforce and care infrastructure needed to serve California's highest-need older adults. At the same time, moving vulnerable seniors out of coordinated-paced care and into fragmented fee-for-service Medi-Cal will disrupt care, worsen outcomes, and increase avoidable hospitalizations. California should be strengthening proven community-based models and not undermining them. Thank you. Good afternoon Chair and members Gabriela Chavez with UDW representing over 250 home care and child care providers in a strong opposition to the Medi asset test because it will balance the budget on the backs of older adults and people with disabilities. Restating the asset test punishes savings and faces low-income individuals to spend down mother's savings. We should not be making decisions that penalize work, savings, and independence.
Thank you for all your comments on the score. Thank you. Good evening.
Whitney Francis with the Western Center on Law and Poverty and on behalf of Justice and Aging. We strongly oppose drastically lowering the Medi-Cal asset limit to $2,000. Again, we urge the legislature to reject this cut that is more severe than other states, including Nebraska, North Dakota, and South Carolina. Second, despite the proposed delay, we remain opposed to cutting Medi-Cal for 200,000 humanitarian immigrants and increasing already unaffordable premiums to $50. We continue to urge the legislature to reject this two-tiered Medi-Cal system and to reject state budget proposals that goes beyond what H.R. 1 demands by rejecting harmful work requirements to stay-only populations. Thank you. Yesenia Rubancho with End Child Poverty California urge you to reject these cruel cuts to Medi-Cal and urge you to take the Senate's approach, which rightfully notes that 42% of Medi-Cal enrollees are eligible because they earn low wages, earn insufficient work hours. And we do this as corporations benefit from one trillion in tax credits from the federal government, paid for by cuts to Medi-Cal, and yet they still expect us to put the health care bill for their unpaid workers. We must do better, and we can do better. Thank you. Good evening. Michelle Johnston with the National Multiple Sclerosis Society. We support the augmentation for increased workloads for county eligibility workers to deal with the increase in caseloads. Like you have all expressed, there are some things we're very concerned with in this proposal, reinstating the Medi-Cal asset limits, eliminating the occupational, the acupuncture benefit, imposing utilization management for transportation services. Many people living with MS cannot drive. And if you have healthcare, but you can't get there, it's not worth having. And then failing to seek ways to keep Californians on Medi-Cal Thank you.
Thank you. Good evening.
Tweedo with the Southeast Asia Resource Action Center. We respectfully oppose the governor's proposed health care cuts for humanitarian immigrants and individuals with unsatisfactory immigration status, specifically the freezing of enrollment, monthly premiums, work requirements, elimination of dental-cal coverage. These cuts will directly harm Southeast Asian elders, refugees, and survivors of war who already face significant barriers to care, and they compound last year's reductions as well as ongoing federal policies targeting immigrant communities. We respectfully request that this legislator reject any proposal that balances the budget. Thank you so much.
Good evening, Amanda Kirsch on behalf of CWDA.
We appreciate the money that was allocated to us in the May revise, but it is simply insufficient. By our estimate, it only allows us to hire one-third of the eligibility workers needed. We are asking for $197 million general fund for $26-27 and $367 million general fund for $27 and $28. We're also asking that you redirect the funds for the staffing surge back to counties so that we can simply hire eligibility workers. We're also asking that you reject the asset limit test and also reject the trailer bill on the performance sanctions. Thank you.
Madam Chair members Tim Madden representing the California chapter of the American College of Emergency Physicians on the MCO tax with the May revised proposal emergency physicians are not included They have been included in the previous MCO tax for funding for our staffing and emergency departments
We're very appreciative of the discussion around emergency departments. I think you understand the need to increase funding to ensure we can staff at levels to provide timely access to care. Thank you.
Good evening, Vanessa Flores.
On behalf of the Alameda County Board of Supervisors, we are deeply concerned that the May revision fails to meaningly address the impacts of HR1. Counties are on the front lines of Medi-Cal implementation, yet funding for eligibility operations falls roughly $100 million short of county requests while adding new processing penalties. At the same time, public hospitals face $4 billion in reductions. Alameda County has long maintained its Indigenate Care Program and remains committed to serving vulnerable residents. But without additional state investment and a short-term bridge strategy, counties and safety net providers will face growing strain on California's risk losing access. Thank you.
Good evening, Chair and members.
George Cruz on behalf of the California Behavioral Health Association. We just want to note our opposition to the reduction of medical coverage for immigrant populations, the increased premiums for adults with unsatisfactory immigration status, the reinstatement of the medical asset limit, and the reduction to community supports. Thank you.
Good afternoon, Chair and members.
Diana Luna with the County Behavioral Health Directors Association. As the legislature continues to work towards the final budget agreement, we, along with the coalition of over 50 organizations strongly urge maintaining the statewide mobile crisis benefit that was proposed for elimination in the governor's budget and remains unchanged in the May revision. Mobile crisis services remain a critical part of California's behavioral health continuum, and we look forward to continuing to engage on potential alternatives to funding this benefit. Thank you. Good evening. Darby Kernan on behalf of the EMS Administrators Association of California, we align our comments with CBHDA. On behalf of the Serious Community Project, representing a CBO Medi-Cal coalition, we are deeply concerned with the ECM and CS services. These services are demonstrating effectiveness, including reducing more expensive health care, so please reject that proposal. And lastly, on behalf of Leading Age California and In-Child Poverty California, we oppose the reinstatement of the asset limit and ask you to reject that proposal as well. Thank you. Diana Douglas with Health Access California. We are again debating these draconian cuts to Medi-Cal for those most in need. It's reprehensible. We're talking about squeezing UIS enrollees for an extra $20 a month for worse coverage, no dental, kicking lawfully present trafficking survivors, refugees down to emergency only Medi-Cal, telling the disabled and elderly they can only have $2,000 in assets, telling the undocumented if they fall off coverage they can never get back on. We must hold our large, wealthy corporations accountable for building their success on the back of low-wage employees who rely on Medi-Cal. We need the Assembly to support a corporate responsibility revenue proposal for Medi-Cal. We need the Assembly to minimize the impact of the fee-for-service transition. Thank you.
Hi, I'm Thomas Levinger, CEO of Golden Age Dental Care. We're one of the few remaining
nursing home dental providers in the state, and I'm here because this care is on the brink of extinction. If Prop 56 cuts stand, nursing home residents will effectively lose access to dental care entirely. You are our last hope. Unlike traditional dentists, we travel between facilities with equipment, coordinate with nursing home staff. Seeing fewer patients, our overhead is higher, and we cannot shift to wealthier private-paid patients because no nursing home residents are on Medi-Cal. The pandemic nearly broke this model already. Supply cost staffing, infection control demands, then inflation drove them higher still. Prop 56 absorbed the costs. Assembly member she out as I have mentioned saving dental care for kids and the numbers of what that would cost during the last budget crisis in 07. We did that for children and also nursing home residents. So it's something to consider, but I'd hate to see any cuts at all. Thank you.
Thank you. Always need to bring it down. Good afternoon.
Katie Rodriguez with the California Association of Public Hospitals. Opposed to the, with concerns with the premium increase and the transition of the UIS population to fee-for-service. both because of network adequacy, but because those two combined is an additional $800 million impact to public hospitals on top of the $3 billion from HR1. And so we still are seeking funding in the final state budget, $500 million general fund on behalf of public hospitals. Thank you. Kelly Brooks, on behalf of the urban counties of California and the counties of Santa Clara, Riverside, Ventura, Santa Barbara, and Santa Cruz, very disappointed about the lack of meaningful investment to mitigate the impacts of H.R. 1 in the May revision. The May revision does not provide enough funding for medical eligibility operations while proposing new penalties. The public hospitals requested $500 million to offset H.R. 1 impacts, yet the May revision provides no relief and makes that situation worse. Overall, the impact is expected to be $4 billion. Finally, there is no investment in county indigent care systems. Urban counties urge the legislature to consider a short-term bridge strategy for individuals who lose coverage. Thank you. Michael Henning, California Alliance of Child and Family Services. CalAIM's enhanced care management and community supports are a critical component of our behavioral health continuum of care. Many of our members provide enhanced care management and community supports, and we are deeply concerned and opposed to the proposed cuts to these services. We also continue to oppose restricting health care access for 200,000 immigrants, including refugees, asylees, domestic violence survivors, and holders of visas for crime victims to emergency-only Medi-Cal. Thank you.
Good evening, Chair and members. I'm Kennell Jack Ray with the Weidman Group on behalf of DeniQuest.
I want to thank both the Senate and the Assembly for including the reversal of the proposed Prop 56 cuts to Deni-Cal providers as priorities in their respective budget plans. Following the governor's May revision, we hope the legislature can hold the line on this item. We respectfully urge the legislature to remain resolute through the final budget negotiations and ensure these harmful cuts are not allowed to take effect. Thank you.
Good evening, Chair and members.
Katie Andrew, Local Health Plans of California. We strongly oppose the May revision proposal to move Medi-Cal members with unsatisfactory immigration status out of managed care into fee-for-service, as well as the proposal to unnecessarily move qualified non-citizens out of full-scope coverage. The difference between the two systems is stark. Fee-for-service is coverage on paper versus true access to high-quality coordinated care provided to members in managed care. We see this as an accounting issue for the UIS emergency services and does not require moving an entire vulnerable population to a second-tier delivery system. Thank you.
Good evening. My name is Danita Stromgren, and I represent AARP as a capital response team member and the 3.2 million individuals who are California AARP members.
We strongly oppose the May revision proposal to revert the Medi asset test to for individuals and for couples We also oppose the proposal to enact a fee cap and a tax levy on CalPACE providers And I'd just like to thank Madam Chair and members for your comments earlier regarding the opposition to these two proposals. We urge your rejection. Thank you.
Chair and members, Nick Luizos with the California Association of Health Plans.
We also oppose the UIS transition to fee-for-service. But on the MCO tax, we have significant concerns. The proposal raises pretty serious affordability red flags. We have been team players on the MCO tax historically, but this $1.5 billion premium tax on the commercial markets is a vastly different animal. So as we develop our formal position, we just ask policymakers and legislators to really seriously consider the impact and magnitude of this proposal. Thank you.
Good evening, Chair members.
Marcus Casper with Dental Surgery Centers Coalition, over 20 years treating special needs patients and underserved children. We're disappointed with the governor's proposal to cut the 56 in the Denti-Cal program. It's incomprehensible that new lower payments have put us about 30 years ago. We are certainly thankful the Assembly has prioritized dental care in their budget blueprint, and we hope to see a delay or complete removal of the cuts in their final budget. The CDA has put out a survey, and they've come up with about 50% of the dental providers will exit the program. I can tell you doing this 20 years, and I have hundreds of dental friends, the number is much greater than that. So DentiCal will crater, and these patients will go to the ER. Thank you for your time.
Good evening. Linda Way with Western Center on Law and Poverty. Related to the fee-for-service shift, we recognize that transitions can cause disruptions in care, and so before any transition happens, we urge protections be in place, including continuity of care, robust outreach and noticing, language access, as well as an access analysis, noting that the last public fee-for-service access analysis was done in 2019.
We also support, echo the support for the Senate's fair share. Thank you.
Good evening.
Ronald Coleman-Vaise here with Authentic Advocacy on behalf of the Coalition for Humane Immigrant Rights, Chair La. We are extremely disappointed with the additional cuts to immigrant health at a time that families are still being attacked. We urge the legislature to reject the increase in premiums. That would make it much more affordable. Yes, it's only $20, but people are already struggling. We also urge you to reject the proposed cuts to humanitarian immigrants, kicking them off full scope Medi-Cal. We align ourselves with the comments from Western Center on Law and Poverty as it relates to the fee-for-service proposal. Thank you.
Good evening, Madam Chair and members.
Jessica Moran with Capital Advocacy on behalf of the Association of Dental Support Organizations. Really appreciate the comments made by the subcommittee tonight on the importance of prioritizing Medi-Cal Dental. strongly urge the legislature to restore the Proposition 56 dental rates. As you know, as you've heard, this will decimate the safety net and understand that tough decisions need to be made, but the budget should not be balanced on the back of our most vulnerable Californians. Thank you so much.
Chair and members, Kathy Mossberg on behalf of Delta Dental.
I associate myself with all those who came before and supporting your rejecting the Prop 56 cuts to dental provider rates. these are essential for keeping providers into service and providing care to those most in need. So thank you for rejecting it in your proposal and hope you continue to do so.
Good evening Chair and members Omar Altamimi with CPEN the California Pan Health Network respectfully requesting the legislature to reject the Ducronian cuts that would balance our state budget on the backs of our immigrant communities
by removing humanitarian immigrants from full-scope Medi-Cal, increasing the monthly premiums to $50, the reintroduction of a $2,000 asset test limit. These cuts don't save our state money. They'll result in more people skipping doctor's visits and seeking emergency care that's more expensive as they live sicker and die younger. Instead of cutting from our most vulnerable in a year where we've raised or we've revenue has exceeded our expectations by $16.5 billion, we should be talking about revenue solutions that in turn fund our state safety net reserve. Thank you.
Sorry. Good evening, chair and members.
Chloe Amosillo with the California Immigrant Policy Center, proud co-chair of the Health for All Coalition. I want to echo the comments by numerous partners made before me on strongly opposing additional cuts to immigrant health care. On the fee-for-service piece, if the transition moves forward, safeguards must be included to ensure equitable access for immigrant enrollees, including the consideration of how language access, provider networks, and specialty care will impact enrollees as a result of the transition. we as a state cannot continue to say we stand with immigrants while cutting down their opportunity to live healthy lives. Thank you.
Good evening, Josh Gallagher on behalf of multiple clients.
On behalf of University of California Health, UC Health wants to echo the concerns raised by the public hospitals regarding the significant negative impacts resulting from the shift of the UIS population to Medi-Cal fee for service and support CAPH's budget requests. In addition, we want to highlight the absence of a May revision proposal to reverse plan cuts to dental supplemental payments. On behalf of the Center for Elder Independence in San Diego PACE, the proposal to lower the PACE rate cap is an unexpected and harmful departure from last year's budget agreement, and we also have concerns with the transition of UIS individuals to fee-for-service. Thank you.
Good evening.
Andy Liebenbaum, Los Angeles County. We've already had to shutter seven of our 13 public health clinics If the county's alignment of budget requires us to consider shuttering a hospital, the devastation is significant. 80% of our patients are covered by Medi-Cal. Over 75% of our patients identify as black, Latino, or Asian. Over 1 million visits are conducted in a language other than English. We align our comments with CWDA, UCC, and all the others who have spoken.
Good evening.
Beth Monowski with SEO California. We are first one to align ourselves with Health Access and the Health for Health Coalition. We strongly believe corporate revenue dedicated to Medi-Cal is a better solution than cuts. Additionally, align ourselves with CAPH and the need for $500 million to stabilize public hospitals. And to minimize who is falling out of coverage, we must fund our county eligibility workforce at $157 million. And we reject the use of these funds for contracting out by the state. Lastly, we support the county-proposed alternative to indigent care. Thank you.
Good evening.
I'm with Political Solutions on behalf of the San Mateo County. have concerns with the lack of meaningful investment in mitigating the impacts of HR 1 in the May revision. May revise provides approximately $100 million less funding than counties requested for medical eligibility operations, while also proposing new penalties tied to eligibility processing timelines. Also deeply concerned about the impacts on public hospitals and indigent care systems. Secondly, on behalf of the California Dental Association, thank you for prioritizing oral health in the budget blueprint. urge you to reject the proposal to cut Prop 56 Medi-Cal dental rates in the final budget. Thank you. Nicole Wordleman on behalf of Orange County and San Bernardino County urging investment in eligibility services in the impacts to HR1 on counties in particular indigent care. We need much more investment in order to keep people covered. On behalf of the Children's Partnership, we urge that the legislature reject any cuts to immigrant health care.
Good evening.
Michelle Gibbons with CHIAC. Appreciate the questions around indigent care. The governor's budget doesn't provide any funding, and it actually retains the dollars that they divert every year for when this population transitioned into Medi-Cal. We strongly urge your consideration of a proposed alternative that keep people in coverage, especially those that fall off due to work requirements. Keeping them in emergency coverage, this will keep them connected to the Medi-Cal system, which is important to get them back into full scope. And it also helps mitigate the impacts to counties. and it will give you time to see what the real fallout is so that you all can have real informed solution discussions. Thank you. Sarah Ducat, on behalf of the rural county representatives of California, I align my comments with my colleague from CHIAC. We're disappointed that there's not additional funding for indigent care and support the alternative to place the population that loses coverage due to work requirements into a temporary two-year pilot program for a state-funded emergency-only Medi-Cal coverage. We are also deeply concerned that they may revise, underfunds Medi-Cal eligibility work, while also proposing penalties for counties that miss processing timelines. The proposal leaves counties without the resources to do the work and then penalizes them when they fall short. And this is the time we actually have to invest in our eligibility workers. They are the key to keeping people in coverage. Thank you.
Thank you, Madam Chair.
Members, Brenda McCarthy with CSAC. Align my comments with my colleagues of CHIEC and our CRC. note that the realignment funding in the health sub-account is fully expended every year to cover the cost of the residual indigent care programs in existence and county public health. So any increase in indigent care programs without state funding will require cuts to public health. I would also note that the alternative proposal we've shared with the committee would allow the state to draw down federal funding for the allowable inpatient stays. That's a very large component of both emergency Medi-Cal and indigent care programs, And so that will bring the federal dollars into the system. Thanks very much.
Good evening.
Jeff Neal representing the counties of Contra Costa, San Diego, YOLO, and Lake. I want to align myself with the comments of all of my county colleagues have come before me, likely the ones that come after me as well, regarding really the just total inadequacy of the May revision to fund, to meet the moment, and fund, you know, avoid the massive cuts to our communities. Thank you.
Good evening, Madam Chair and members.
Jack Anderson with CHIAC. Related to the California Children's Services Program, we did want to note that the May revision does not include adequate funding for county CCS program case management or administration. And as a reminder, allocations are $109 million below what is needed based on DHCS staffing standards. We do understand potential impacts related to the UIS fee-for-service transition as it relates to the CCS state-only population. We're still assessing the provided resources and look forward to continuing to engage with the legislature and administration on those needs for case management staff of counties. And then lastly, as part of the administration's proposed CalAIM waiver renewal trailer bill, we would request that CCS monitoring and oversight provisions in that same article be repealed. Thank you. Good evening. Alexis Rodriguez with the California Chamber of Commerce here with concerns with the proposed MCO tax on non-Medicaid enrollment. The May revision proposes nearly a $9 per member per month tax on commercial health plans, which would estimate over a $1.5 billion tax increase. Just here to stress that this will increase premiums for Californians. Thank you.
Good evening, Madam Chair.
Eduardo Martinez on behalf of Western Dental. We're the largest Medi-Cal dental provider in the state. And really just want to thank you and your colleagues for asking great questions about the cuts to Medi-Cal dental. We do believe that these cuts will result in dentists fleeing the program, and that is not an easy thing to fix even in good years. So really appreciate all your work and help on that.
Madam Chair, members, Angela Hill with the California Medical Association with concerns to the administration's MCO to tax proposal,
which we do see effectively as a backfill for the general fund. And when Californians are already struggling with rising health care costs and we're bracing for the cuts coming from H.R. 1, we think that this is going to increase health care costs, premiums, and not only the patients but the employers who provide that coverage. We're also opposed to the proposal to increase the premiums for UIS, and we do see this as an access issue. Thank you.
Well, good evening, Madam Chair and members. Chad Mays on behalf of the California Society of Pediatric Dentistry.
I want to align my comments with those that believe in that we should restore the Medi-Cal dental, Prop 56 Medi-Cal dental funding. Disappointed that the governor did not put it in the May revise. We're hoping that those of you that are here who have been strong will stand strong with the Senate and will push back on the governor to get that done. And we are not talking about balloons. We're not talking about teeth cleaning. We're talking about serious dentistry with kids under general anesthesia. So please restore that Prop 56 Medi-Cal funding.
Good evening, Chair and members.
Chris Scroggen with Capital Advocacy on behalf of Big Smiles and Children's Choice Dental Care. I want to echo the comments of the previous speakers and emphasize the importance of restoring and request the legislature restore the Proposition 56 funding for Medi-Cal dental. So it's incredibly important for access to care. And also want to reiterate and echo the comments of thanking you all for the really great comments and questions. Appreciate you standing strong on this. Thank you.
Good evening, Madam Chair and members.
Denise Cuevas-Romero with the California Primary Care Association. Appreciate the conversation. Concerned about the lack of the delay for the PPS cuts for the UIS population. opposed to the shift of the UIS population from managed care to fee-for-service. On top of the $50 premium for us, this is access in name only. It going to be very harmful for patients on care coordination and specialty care opposed to the change in the acupuncture benefit the asset limit test and the cap on pace program So really appreciate all the conversations. Thank you.
Good afternoon, Jasmine Asher,
representing the California Association of Orthodontists. I first just wanna thank the assembly for including Dentical coverage in their budget blueprint. I wanted to align my comments with those in the past regarding the absence of dental funding in the budget, we encourage you to restore that funding for the patients. Thank you.
Good evening, Madam Chair.
Christopher Sanchez here on behalf of the Central American Resource Center, I'll line up my comments with the folks from the Migrant Rights Movement, opposed to the governor's impacts to the immigrant community, and on behalf of our friends from the Alzheimer's Association, opposed to reinstating the Medi-Cal asset limit test, capping pace rates and transitioning UIS to fee service and increasing the premiums. Thank you, Madam Chair and members.
Chair and members, Allison Ramey on behalf of Altamed.
I want to align our comments with that of the California Primary Care Association and just emphasize that our belief is that with the shift of the UIS to fee for service, it will reduce access and limit coordinated care services. We encourage the legislature to continue to push DHCS for greater transparency on the assumptions both about the affected populations, the savings, and the provider impact. And while we continue to assess all of the impact and harm created by these additional May revised cuts, we continue to call for the restoration of PPS funding, protection of coordinated care access, reversal proposed UIS, and cuts to pace.
Thank you, Madam Chair and members. Kathy Sunderland-McDonald for the California Association for Adult Day Services. Excuse me, we urge rejection of the asset test. Please do not create another set of barriers and cliff for our older adults and vulnerable adults to fall off. CADS is also requesting adoption of no-cost trailer bill language. The community-based adult services programs have not had a rate increase in 20 years, and we're urging cost relief identification. the trailer bill would ask DHCS and the Department of Aging to come to the table and work with stakeholders to identify those cost relief options and report back next year. Thank you.
Good evening. Louis Brown with the Corporation for Supportive Housing. We respectfully urge the committee to reject the administration's proposals related to Cal-AIM community supports. We are concerned the proposal to limit eligibility for housing tenancy and sustaining services beyond an initial six period can make it difficult to show those services are cost which is required under federal regulations We know from research in the Department's own reports that cost savings materialize after 18 months of services, limiting eligibility in the way proposed could prematurely cut off services before those savings are realized and at the same time put people's health and housing at risk. Thank you.
Hello, Monica Kirkland with Senior Services Coalition of Alameda County, representing over 40 organizations that provide health and supportive services to over 90,000 individuals. And we strongly oppose reinstating the Medi-Cal asset limit. It will cause thousands of older adults and people with disabilities to lose coverage. And this policy will punish low-income Californians and leave many vulnerable people just one emergency away from financial ruin. And really the question is, similar to your sentiments that I do appreciate, is that why are we back here again, as the counties and the communities made it very clear that this is not sustainable. Thank you so much.
Good evening. Julie Sherman, Director of Public Policy for the Arc of California. We represent people with intellectual and developmental disabilities. The proposed $2,000 Medi-Cal asset caps for people with disabilities and older adults effectively requires individuals to be in poverty and remain in poverty in order to access the basic survival need that is healthcare and IHSS. This includes durable medical equipment such as breathing apparatus and life-saving medications. Being low income and having a disability should be enough rather than also requiring individuals to be in abject poverty. Thank you.
Good evening, Chair and members. Jennifer Tannehill with Aaron Reed and Associates on behalf of the California Dental Hygienists Association. I just want to really thank you for your comments and your efforts to reinstate Prop 56 payment for providers. The alternative practice hygienists would not be able to serve the inbound or homebound patients and skilled nursing patients without this funding. And so we really hope it goes. It's reinstated. Thank you very much.
Good evening, Trent Murphy with the California Association of Alcohol and Drug Program Executives or CAATP. CAATP is opposed to the monthly premium increases for the UIS population. We support care coordination for the same populations force the fee for service model. We support HR1 navigators for clinics and appreciate the dollars for county HR1 administrative workload. We strongly oppose using BHSA and opioid settlement funds backfill the general fund costs for DMCODS The state relies on these opioid settlement funds to fund various initiatives including the Naloxone Distribution Project which has documented over 438 opioid overdose reversals since 2018. We should be focusing on that instead. Thank you.
Good evening, Chair Addison members. I'm Evan Fern with Disability Rights California. The proposed medical asset limit for people with disabilities and seniors is inhumane and punitive, an attack on our most vulnerable. These people rely on this critical health care to survive, but 62,000 of them could lose access in the next two years. $2,000 can't cover unplanned expenses like car repairs or hospital bills. We also oppose the $50 monthly Medi-Cal premium for some immigrant groups. Disability doesn't recognize immigration status. Thank you all so much for your comments today on these issues.
Thank you, and thank you to our witnesses. I came to testify you're welcome to stay for public comment for items not on the agenda. You don't have to, though. I don't really see any. But if there are any public comments for items not on the agenda, we'll move to those.
Madam Chair and members, Rand Martin on behalf of Aviana Healthcare and Prime Home Health. Thank you for the comments today about how many of these budget proposals will actually cost the state more money than we're saving. I want to remind you that we have a proposal before you, Ms. Pellerin and Ms. Stephanie, that would move, would strengthen the private duty nursing for children with complex medical conditions so that we could actually save money, keep them out of the hospitals, put them back in their homes, use that money for better purposes, maybe take care of some of these costs that the department has been talking about. Thank you.
Thank you. Seeing no other comments for items not on the agenda, we will close the hearing. We'll adjourn. Thank you. Thank you.