Tell Governor Newsom: Keep the Full-Year PPS Delay in the Final Budget
California’s community health centers serve more than 6 million patients regardless of immigration status, insurance coverage, or ability to pay. That mission is now at serious risk. Last year’s state budget eliminated fair, cost-based reimbursement through the Prospective Payment System (PPS) for Medi-Cal patients with Unsatisfactory Immigration Status (UIS). The original implementation date is July 1, just two weeks away. DHCS only released draft guidance two weeks ago, and final guidance is not expected until after the planned implementation date. Neither health centers nor the state are ready to operationalize this massive change with serious financial and care delivery implications.
The Legislature has acted. Both chambers passed a budget that keeps PPS in place for a full year, stays balanced, and gives the state time to find lasting solutions. Now the final decision rests with Governor Newsom.
The stakes are high. For clinics serving communities where 20 to 40 percent of patients are UIS Medi-Cal enrollees, PPS elimination means an 89% reimbursement cut for a significant share of their patients. Clinics are already planning for layoffs, service reductions, and possible site closures. When a clinic is forced to make these difficult decisions, everyone in that community loses access, not just UIS patients.
PPS is the financial foundation that made Governor Newsom’s Medi-Cal expansions work. Fair, cost-based reimbursement gave clinics the footing to hire staff, open capacity, and build the care infrastructure serving these communities today. Eliminating it now puts that entire investment at risk. The damage will be lasting and far harder to repair once implemented.
Governor Newsom has spent years expanding coverage, improving Medi-Cal, and strengthening the safety net. The Legislature’s budget agreement preserves that legacy.
We call on Governor Newsom to stand with the Legislature and protect PPS reimbursement for UIS communities in the final budget.
Governor Newsom: Keep the Full-Year PPS Delay in the Final Budget To:
Protect Primary Care for ALL | Prevent Clinic Closures | Protect Immigrant Communities | Preserve the Governor’s Medi-Cal Legacy