FY 2026–27 Medi-Cal appropriation
Program-wide appropriation; not a hospital-only amount.
DHCS May 2026 Medi-Cal Local Assistance Appropriation Estimate, Funding Summary, page FS 1Policy and financing
Medi-Cal financing and hospital support programs
Official figures on Medi-Cal financing, distressed-hospital grants and loans, and federal rule changes. Statewide changes are not allocated to individual hospitals because no official facility-level file exists.
Hospital Quality Assurance revenue
Financing line item; not equivalent to net hospital benefit.
DHCS May 2026 Medi-Cal Local Assistance Appropriation Estimate, Funding Summary, page FS 2Managed-care private-hospital directed payments
Official program-level total-funds estimate; it is not a post-policy loss estimate or a facility allocation.
DHCS May 2026 Medi-Cal Local Assistance Estimate, Summary of Regular Policy Changes, page CY 7Distressed-hospital support
Distressed-hospital grants and loans
Grant determinations and original loan awards from the Department of Health Care Access and Information (HCAI) are listed separately. Neither is operating revenue or a current cash balance.
Distressed Hospital Small Grant Program
The page describes award determinations and says HCAI was finalizing grant agreements and would distribute funds after execution. These are not payment-confirmation records; unencumbered funds were to revert on June 30, 2026.
| Hospital / district | Determination |
|---|---|
| Southern Inyo Healthcare District | $400K |
| Palo Verde Hospital | $3M |
| Watsonville Community Hospital | $10.6M |
| El Centro Regional Medical Center | $11M |
Distressed Hospital Loan Program
These are original loan-award amounts, not disbursement balances, repayments, forgiveness, or current net debt. The page's modification status can change and should be refreshed before publication.
| Hospital | Award date | Original award | Step 2 status |
|---|---|---|---|
| Chinese Hospital | 2023-11-06 | $10.4M | Pending |
| Dameron Hospital Association | 2024-01-02 | $29M | No; may apply in future |
| El Centro | 2023-10-05 | $28M | Yes |
| St. Rose Hospital | 2023-12-06 | $17.7M | Pending |
| Hazel Hawkins Memorial | 2024-07-01 | $10M | No; may apply in future |
| John C Fremont | 2024-01-17 | $9.4M | No; may apply in future |
| Kaweah Delta | 2024-02-21 | $20.8M | No; may apply in future |
| Madera Community Hospital | 2024-06-13 | $57M | No; may apply in future |
| Martin Luther King Jr. | 2023-11-29 | $14M | Yes |
| Palo Verde Hospital | 2023-11-21 | $8.5M | Pending |
| Pioneers Memorial Hospital | 2023-10-30 | $28M | No; may apply in future |
| Ridgecrest Regional Hospital | 2023-11-29 | $5.5M | No; may apply in future |
| San Gorgonio Memorial | 2024-01-18 | $9.8M | No; may apply in future |
| Sonoma Valley Hospital | 2024-07-11 | $3.1M | No; may apply in future |
| TriCity Medical Center | 2023-11-29 | $33.2M | Yes |
| Watsonville Hospital | 2023-10-30 | $8.3M | Yes |
Federal Medi-Cal changes
Federal Medi-Cal financing changes
The scenario is a payer-revenue sensitivity and financing-cap screen, not a facility forecast or allocation of federal cuts. It does not convert DHCS or LAO projections into hospital losses.
Source check · September 26, 2026. P.L. 119-21 affects Medicaid provider taxes and state directed payments; mechanisms and transition dates differ. The February 2026 MCO-tax final rule (CMS-2448-F, published February 2, 2026; effective April 3, 2026) leaves California’s current authorization intact through December 31, 2026. SB 125 (Ch. 24, Stats. 2026) enacts a restructured MCO tax effective January 1, 2027, pending federal approval. The state-directed-payment rule (CMS-2449-P, published May 22, 2026) and the provider-tax hold-harmless rule (CMS-2452-P, published July 23, 2026) remain proposed; neither was final as of the check date. DHCS describes grandfathered SDP transitions beginning 2028. CMS approved the major components of Hospital Quality Assurance Fee Program 9 (calendar year 2025); DHCS estimates $5.5 billion in hospital net-benefit payments. DHCS financing guidance. The MCO tax and hospital provider fee are different financing mechanisms. Do not equate gross fee-cap compression with net hospital losses or allocate federal reductions using arbitrary percentages.
U.S. Congress
Public Law 119-21
Sections 71115 and 71116 establish provider-tax and state-directed-payment constraints used as the policy parameters in the exposure screen.
↗U.S. Centers for Medicare & Medicaid ServicesJanuary 2026 health-care-related-tax final rule
CMS finalized the tax-loophole rule and a transition through calendar year 2026 for recently approved MCO taxes such as California's. This is final—not a scenario.
↗U.S. Centers for Medicare & Medicaid ServicesMay and July 2026 state-directed-payment and provider-tax proposed rules
CMS describes proposed implementation details for P.L. 119-21. Proposed provisions remain visibly distinguished from the January final rule.
↗DHCSMedi-Cal Financing: Federal Policy Impacts
DHCS states that California's current MCO tax remains intact through December 31, 2026, after which the same structure will no longer be federally approvable, and that it is analyzing implications for Proposition 35 and existing directed payments.
↗California Legislative Analyst's OfficeThe 2026-27 Budget: Medi-Cal Fiscal Outlook
LAO identifies material uncertainty for the private hospital fee (HQAF) under federal policy changes and explains that its outlook is a fiscal projection, not a hospital-level impact allocation.
↗Dated policy timeline
Policy timeline: 25 dated events
Each event carries the status its source gives, such as enacted, final rule, proposed rule, approved or scheduled. Statuses are current as of the September 26, 2026 source check.
Scroll horizontally to view every column.
| Date | Status | Event | Domain | Source |
|---|---|---|---|---|
| day | completed | HCAI released Distressed Hospital Loan Program award determinations. | subsidy | California HCAI Distressed Hospital Funding Programs |
| date range | completed | The 16 published DHLP award dates span this period; original awards total $292.5 million. | subsidy | California HCAI Distressed Hospital Funding Programs |
| day | enacted | AB 869 (Ch. 801, Stats. 2024) enacted: eligible hospitals (DHLP recipients, small <=50 beds, rural, critical access, health-care-district hospitals) may seek HCAI approval to delay the January 1, 2030 seismic deadline by up to 3 years, with a possible further 2-year delay to a maximum of January 1, 2035; seismic compliance plans due by January 1, 2026. | state policy | California Legislative Information, AB 869 (2023-24) bill text and Legislative Counsel's Digest |
| day | enacted | Public Law 119-21 enacted Medicaid provider-tax and state-directed-payment restrictions. | federal financing | U.S. Congress, Public Law 119-21 sections 71115-71116 |
| day | announced | CMS announced Rural Health Transformation Program awards (P.L. 119-21 sec. 71401); HCAI reports California was awarded $233.6 million for federal FY 2026 (HCAI is lead agency, 'CalRHT'). | federal financing | HCAI California Rural Health Transformation (CalRHT) page |
| day | final rule | CMS displayed the final health-care-related-tax loophole rule. For California's recently approved MCO tax structure, the transition runs through the end of calendar year 2026. | federal financing | CMS Preserving Medicaid Funding for Vulnerable Populations final-rule fact sheet |
| day | announced | CMS issued updated preliminary guidance on P.L. 119-21 sec. 71116 state-directed-payment limits and grandfathering, replacing its September 2025 guidance (per DHCS; letter dated 02/02/2026 by filename). | federal financing | DHCS Medi-Cal Financing: Federal Policy Impacts page (page last updated July 6, 2026), linking CMS SDP letter |
| day | under discussion | The OHCA Health Care Affordability Board received a staff introduction to the spending-target penalty structure and data-submission enforcement regulatory text (informational). The penalty Board vote and regulations are listed as future topics. | state policy | HCAI OHCA Board April 22, 2026 agenda and presentation |
| day | completed | Distressed Hospital Small Grant Program application deadline; HCAI later published four determinations totaling $25.0 million. | subsidy | California HCAI Distressed Hospital Small Grant application and funding-program page |
| day | proposed rule | CMS published the state-directed-payment proposed rule (CMS-2449-P) in the Federal Register; comments closed July 21, 2026. Still proposed as of September 26, 2026. | federal financing | Federal Register |
| day | interim final rule | CMS interim final rule with comment, 'Medicaid Program; Community Engagement Requirement for Certain Individuals' (FR doc 2026-11094), effective 2026-07-31; states must implement no later than January 1, 2027 (correction published 2026-06-29). | federal financing | Federal Register API, documents 2026-11094 and C1-2026-11094 |
| day | approved | CMS approved the major components of California's Hospital Quality Assurance Fee Program 9 (calendar year 2025), including the tax waiver. DHCS estimates hospital net-benefit payments of $5.5 billion; CHA and a congressional press release cite about $5.9 billion. CHA reports full fee-for-service payment approval remained outstanding. | federal financing | DHCS 2026-27 Budget Act Highlights (July 1, 2026), p. 5; Rep. David Valadao press release (June 26, 2026); CHA 'CMS Approves Hospital Fee Program 9' (July 2, 2026, member-restricted body) |
| day | enacted | SB 125 (Ch. 24, Stats. 2026) enacted to restructure California's MCO tax to conform to P.L. 119-21 / the February 2026 CMS rule; the renewed tax is effective January 1, 2027 (or later upon federal approval). DHCS budget scores $575M (2026-27), $2.3B each in 2027-28 and 2028-29, and $1.7B in 2029-30. | state policy | California Legislative Information, SB 125 (2025-26) status; DHCS 2026-27 Budget Act Highlights (July 1, 2026), p. 4 |
| day | enacted | 2026-27 Budget Act (DHCS highlights): $250 million one-time General Fund for grants to California's designated public hospital system; MCO-tax revenue of $2.5B in 2026-27 supporting payment increases relative to CY 2024 for hospital and other services, including $1.9B from CY 2025-2026 MCO tax revenue after Proposition 35 requirements. | state policy | DHCS 2026-27 Budget Act Highlights (July 1, 2026), pp. 4-6 |
| day | official estimate update | DHCS updated the May 2026 Medi-Cal Local Assistance Appropriation Estimate for the 2026-27 Budget Act. | state financing | DHCS May 2026 Medi-Cal Local Assistance Appropriation Estimate |
| day | proposed rule | CMS published the provider-tax indirect hold-harmless proposed rule (CMS-2452-P) in the Federal Register; comments closed September 21, 2026. Still proposed as of September 26, 2026. | federal financing | Federal Register |
| day | enacted | P.L. 119-21 sec. 71109 (alien Medicaid eligibility restriction) and sec. 71110 (emergency Medicaid FMAP for expansion-group non-qualified immigrants limited to regular FMAP) take effect. DHCS: emergency-services match falls from 90% to 50%; California delays its state transition to restricted-scope Medi-Cal for affected qualified non-citizens to July 1, 2027 (about 148,000 people). | federal financing | Public Law 119-21 secs. 71109-71110 (govinfo); DHCS 2026-27 Budget Act Highlights p. 4 |
| day | final-rule transition boundary | California's current MCO tax remains permitted through its authorized term; DHCS states the same tax structure will no longer be federally approvable afterward. | state financing | DHCS Medi-Cal Financing page; CMS January 29, 2026 final-rule fact sheet |
| month; LAO assumption | official projection, not enacted implementation date | LAO assumes federal changes begin affecting California's private hospital fee when waiver authority is renewed. | state financing | LAO 2026-27 Medi-Cal Fiscal Outlook |
| day | enacted | P.L. 119-21 Medi-Cal eligibility provisions start: community engagement requirement (sec. 71119), six-month redeterminations for expansion adults (sec. 71107), and shorter retroactive coverage (sec. 71112; DHCS: one month for expansion adults, two months for others). Each begins in the first quarter after December 31, 2026. | federal financing | Public Law 119-21 secs. 71107, 71112, 71119 (govinfo); DHCS 2026-27 Budget Act Highlights p. 4 |
| FFY 2028 start | enacted phase-down; rulemaking in progress | Provider-tax safe-harbor ceiling begins its statutory phase-down for Medicaid expansion states. | federal financing | P.L. 119-21 section 71115; CMS July 21, 2026 proposed-rule fact sheet |
| rating-period threshold | enacted transition | Qualifying grandfathered state-directed payments begin 10-percentage-point annual reductions toward the new limit. | federal financing | P.L. 119-21 section 71116; DHCS Medi-Cal Financing page |
| day | enacted | P.L. 119-21 sec. 71120 cost sharing for expansion adults above 100% FPL begins. | federal financing | Public Law 119-21 sec. 71120 (govinfo) |
| FFY 2032 start | enacted target | Provider-tax safe-harbor ceiling reaches 3.5% for Medicaid expansion states. | federal financing | P.L. 119-21 section 71115; LAO 2026-27 Medi-Cal Fiscal Outlook |
| day | scheduled | Distressed Hospital Loan Program statutory sunset. | subsidy | California HCAI Distressed Hospital Funding Programs |
Authority hierarchy
Which source governs which claim
DHCS owns California Medi-Cal implementation and currently states what is final, proposed, under analysis, and time-limited. It should control California implementation claims, while Congress and CMS control statutory and federal regulatory claims. DHCS has not published a validated facility-by-facility net impact allocation.
Enacted statute
U.S. Congress
What the law requires
Public Law 119-21
Final and proposed federal implementation
CMS
Effective dates, transitions, grandfathering, and regulatory status
January 2026 final rule and May/July 2026 proposed rules
California implementation and fiscal baseline
DHCS
California tax/payment status, official estimates, and state response
Medi-Cal Financing page and May 2026 Local Assistance Estimate
Independent state fiscal analysis
California LAO
Budget uncertainty and scenario context
2026-27 Medi-Cal Fiscal Outlook
CRWDHEALTH analytical scenario
CRWDHEALTH
Transparent exposure sensitivity only
federal_medi_cal_exposure.json
Program pages
Official program sources
All are public pages with no account or fee.
Official source
Federal policy impacts
Best current California implementation source for MCO-tax, provider-tax, and state-directed-payment status.
↗Official sourceHospital Quality Assurance Fee
Document fee cycles, supplemental payments, and directed-payment context.
↗Official sourceDistressed Hospital Loan Program
Identify statutory stabilization support and program status.
↗The Almanac reports official financing and program context plus transparent exposure sensitivities. It does not predict facility losses, state policy responses, enrollment or utilization changes, or net federal/state fiscal effects. DHCS now posts the HQAF VIII fee and payment model workbook, but it has not been parsed, so no HQAF model amounts are reported. Any future facility exposure index will publish its assumptions and be labeled as a scenario.
Downloads
Policy figures in the Almanac workbook
The workbook lists each figure with its source link, period, unit and caveat.