CHA News Article

Governor, Legislature Reach Agreement on State Budget
For CEOs, CFOs, government relations staff

On Monday, the Governor and legislative leaders announced an agreement on a state budget plan that would avoid the deep cuts to health and human service programs the Governor had proposed in May. Legislators rejected the Governor’s proposed cuts to safety-net programs, stating the demand for these services is greater now than ever.  Notably, the budget agreement rejects an earlier proposal to cut certain Medi-Cal managed care payments that would have directly impacted hospitals, a cut CHA opposed (see CHA’s media statement issued yesterday). 

It also rejects cuts to aging programs, Medi-Cal optional benefits, and Proposition 56. 

Although the state is facing a devastating budget deficit, the Legislature was able to avoid most of the deep cuts proposed by the administration by using lower caseload estimates for Medi-Cal and other social service programs and assuming higher tax revenues due in July. The budget also assumes receipt of federal funds and would reverse some of the cuts if the funds materialize; most of those cuts are in higher education and reductions to state employees’ pay. 

Included in the health trailer bill is language requiring the Office of Statewide Health Planning and Development (OSHPD) to establish the Health Care Payments Data Program (no later than July 1, 2023). OSHPD would also be required to administer the Health Care Payments Data System, which would include health care data submitted by health care service plans, health insurers, and other specified mandatory and voluntary submitters. With this data OSHPD will produce publicly available information, including data products, summaries, analyses, studies, and other reports to support goals that include improving public health, reducing disparities, and reducing health care costs. 

Lawmakers will vote on the budget package later this week, and the Governor is expected to sign it by July 1, the beginning of the next fiscal year. Another round of budget negotiations is expected to take place in early August, after the July 15 tax deadline. More will be known at that time about federal funding as well. 

In its media statement, CHA acknowledged the Governor and Legislature for prioritizing the health care needs of the state’s most vulnerable residents.  

“While hospitals appreciate the leadership necessary to ensure the Medi-Cal program is protected,” said CHA President & CEO Carmela Coyle, “we are disappointed the budget deal does not provide the financial lifeline hospitals so desperately need to stem the unprecedented fiscal crisis that has resulted from the COVID-19 pandemic.” 

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