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The 2022-23 California Spending Plan

Health

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• Overview
• Crosscutting Issues
• Medi-Cal
• Behavioral Health
• Department of State Hospitals (DSH)
• California Department of Public Health
• Covered California
• Department of Health Care Access and Information
• Appendix

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Overview

Spending on Health Programs Notably Increases Under Budget Package. As Figure 1 shows, the budget package provides $42.6 billion General Fund for health departments in 2022-23. This level reflects an increase of $11.1 billion (35 percent) over the revised 2021-22 level. The year-over-year increase primarily is due to significant growth in projected General Fund spending in the Medi-Cal program under the Department of Health Care Services (DHCS). Roughly 60 percent of the increase in General Fund Medi-Cal spending reflects technical budget adjustments, such as caseload growth and scheduled changes in the federal share of cost, and the remaining roughly 40 percent reflects numerous discretionary policy augmentations.

Increases Reflect Numerous Adjustments. The year-over-year net growth in health department General Fund spending reflects a number of discretionary and technical actions adopted by the Legislature as part of its 2022-23 spending plan. Prominent among the policy actions are major new investments in behavioral health-related infrastructure. Major technical adjustments include a funding augmentation to account for a significant increase in the Medi-Cal caseload, in part reflecting COVID-19-related policies designed to allow enrollees to retain Medi-Cal coverage that they otherwise would lose based on income-eligibility rules. In addition, the spending plan reflects the ramping up of augmentations initially approved in the 2021-22 budget, including augmentations for the California Advancing and Innovating Medi-Cal (CalAIM) initiative. An Appendix table at the end of this post shows the major adjustments for each department.

Crosscutting Issues

Secretary of the California Health and Human Services Agency (CalHHS)

Health Information Exchange. The spending plan includes $8.8 million General Fund ongoing and authority for 18 permanent positions, as well as $50 million General Fund spread over 2022-23 and 2023-24 for contracting costs, to facilitate and establish a governance structure for a health information exchange. Legislation associated with the 2021-22 budget required a framework for data exchange to be established by July 1, 2022 and for a data sharing agreement to be executed among participating entities—including health plans, clinical laboratories, health providers, and health facilities—by January 31, 2023. Active participation in the exchange must begin by January 31, 2024 for all health plans, clinical laboratories, large providers, and large health facilities, and by January 31, 2026 for smaller providers and facilities. Funding and positions approved in the 2022-23 budget will allow CalHHS to establish governing practices to support the exchange—for example, aligning state and federal policies, maintaining data sharing agreements and producing guidance, and monitoring compliance with data sharing agreements—and work with consultants to help onboard and provide technical assistance to participants in the exchange.

Office of Youth and Community Restoration Ombudsperson. The spending plan includes $10 million General Fund ongoing to support the ombudsperson at the Office of Youth and Community Restoration. Legislation associated with the budget expands the authority of the ombudsperson to investigate complaints from youth in juvenile facilities, establishes legal protections for the ombudsperson and staff by prohibiting courts from compelling them to testify in judicial or administrative proceedings, and requires additional reporting to the Legislature about complaints and complaint investigations.

Office of Resilience and Response. The spending plan includes $3 million General Fund in each of the next three years and nine permanent positions for CalHHS to establish the Office of Resilience and Response. CalHHS indicates it will assess the success of the office after three years to determine whether it should be made permanent. The new office will help coordinate disaster and emergency preparedness, response, recovery, and mitigation across the 12 departments and 5 offices that make up CalHHS and help support and maintain CalHHS’s All-Hazards dashboard.

Health Workforce Development

Supports Numerous Health Workforce Initiatives. As Figure 2 shows, new initiatives supported in this year’s budget span across multiple years, departments, and fund sources. Total funding is $1.5 billion across all affected years ($692 million in 2022-23). The major features of this package are as follows:

• “Care Economy.” More than half of the total funding for health workforce initiatives over multiple years supports major components of the care economy package proposed in the Governor’s budget. (As we noted in our analysis of the proposal, care economy refers to a broad set of health professions generally focused on caregiving.) Of this package, $627 million General Fund ($53 million in 2022-23) supports initiatives in the Department of Health Care Access and Information (HCAI) to increase the supply of community health workers, nurses, and social workers. Another $364 million in General Fund and Opioid Settlement Fund ($312 million in 2022-23) covers various other initiatives, such as grants for local workforce training programs, expanded vocational pathways at community colleges, and training to health providers on treatment for persons with substance use disorders.

• Behavioral Health. The spending plan provides $112 million General Fund ($56 million in 2022-23) in grants to higher education institutions to expand enrollment at social work and behavioral health training programs. Another $88 million General Fund ($44 million in 2022-23) supports postgraduate training slots and loan repayments for psychiatrists. An additional $35 million General Fund and Mental Health Services Fund ($23 million in 2022-23) provides financial assistance for students enrolled in postgraduate behavioral health education programs and supports efforts to recruit diverse high school students into behavioral health professions.

• Primary Care. The spending plan provides $86 million General Fund ($36 million in 2022-23) in one-time augmentations to the Song-Brown program at HCAI, which primarily supports postgraduate training for primary care providers. The one-time augmentations support training programs for physicians, nurses, nurse practitioners, nurse midwives, and physician assistants. Another $35 million General Fund (all in 2022-23) supports training on information technology (IT) issues to primary care and public health workers; establishes a new master’s of physician assistant program at the California State University, San Bernardino; and funds primary dental care clinical rotation slots.

• Public Health. The spending plan provides $66 million over four years ($21 million in 2022-23) to the California Department of Public Health (CDPH) for early career and leadership training to several types of public health professionals, such as microbiologists, epidemiologists, and public health laboratory directors. (We provide more information on these initiatives in the “California Department of Public Health” section of this post.) The budget also temporarily waives certification and recertification fees for public health nurses, backfilling the associated funding with $10 million one-time General Fund ($3 million in 2022-23) at HCAI.

• Reproductive Health. The spending plan provides $40 million General Fund (all in 2022-23) to HCAI for loan repayment and scholarship programs for providers pursuing reproductive health care careers, as well as training to clinicians and health care workers on abortion issues.

Retention Payments for Certain Health Care Workers

Retention Payments for Workers in Certain Health Care Facilities. The spending plan includes roughly $1.1 billion from the California Emergency Relief Fund ([CERF], which is supported by the General Fund) in 2021-22 to provide one-time retention payments to eligible workers in certain health care facilities, including hospitals and skilled nursing facilities. In addition to this amount, the 2022-23 budget includes $70 million General Fund to provide retention payments to eligible workers of health care clinics.

Medi-Cal

Overview of Medi-Cal Spending Plan

Year-Over-Year Net General Fund Spending Growth of $11.4 Billion. As shown in Figure 3, the Medi-Cal spending plan includes $36.5 billion General Fund ($138 billion total funds) in 2022-23—an increase of $11.4 billion General Fund ($16 billion total funds) relative to 2021-22. Of this amount, roughly $5 billion General Fund is for discretionary spending. Some examples of discretionary funding included in the 2022-23 budget are increased funding for behavioral health (which will be discussed later in this publication), skilled nursing facility financing reform, equity and practice transformation payments, and reducing Medi-Cal premiums to zero. The remaining $6.4 billion net increase in General Fund spending largely is a result of (1) technical changes such as various budget adjustments associated with the COVID-19 national public health emergency (PHE), and (2) implementing and updating previously authorized budget items, such as the CalAIM initiative.

Notable Adjustments to Medi-Cal

In the section below, we provide additional information about notable adjustments made to the Medi-Cal budget as part of the 2022-23 budget package, including (1) a plan to expand Medi-Cal eligibility to all income-eligible California residents regardless of immigration status, (2) budget adjustments related to CalAIM, (3) various financing-related adjustments, (4) funding for equity and practice transformation payments, (5) funding for benefit expansions, (6) funding to reduce Medi-Cal premiums to zero, and (7) funding for various priorities of the Legislature.

Budget Package Includes Plan to Expand Access to Medi-Cal Coverage to Remaining Otherwise Income-Eligible Undocumented Populations. Historically, undocumented immigrants who were income eligible for Medi-Cal only qualified for coverage for their emergency- and pregnancy-related services. Over the last several years, and in a number of steps, the Legislature has expanded comprehensive Medi-Cal coverage to all income-eligible undocumented immigrants who are under the age of 26 or over the age of 49. The 2022-23 budget package includes a plan to expand eligibility to all income-eligible undocumented immigrants aged 26 through 49 beginning no later than January 1, 2024. While there are no costs in 2022-23, the expansion is expected to cost $2.1 billion General Fund ($2.6 billion total funds) when fully implemented.

CalAIM Implementation and Updates. CalAIM is a large set of reforms in Medi-Cal to expand access to new and existing services and streamline how services are arranged and paid. The spending plan provides $1.2 billion General Fund ($3.1 billion total funds) for the implementation of CalAIM and various updates. Updates include (1) a delay from January 1, 2023 to July 1, 2023 for the transition of intermediate care facilities for the developmentally disabled into managed care, (2) the transition of most remaining fee-for-service populations to managed care in January 2023, (3) the coverage of medications as part of the 90-day prerelease services for justice-involved populations, and (4) replacing funding for designated state health programs with General Fund.

Financing-Related Adjustments. The spending plan includes various financing-related adjustments for skilled nursing facilities and provider payments totaling $322 million General Fund ($507.6 million total funds). These adjustments include:

• Skilled Nursing Facility Financing Reform. The spending plan provides $165 million General Fund ($340 million total funds) to implement a new nursing facility financing methodology effective January 1, 2022 to December 31, 2026. The new methodology is intended to improve quality of care and increase funding for the nursing facility workforce. In addition, a 10 percent rate increase related to COVID-19 has been extended for an additional year.

• Backfill Provider Payments Funded by Proposition 56 With General Fund. The spending plan includes $148 million General Fund to transition various provider payments that were supported by Proposition 56 revenues to General Fund support instead.

• Eliminate Certain AB 97 Provider Rate Reductions. The spending plan includes $9 million General Fund ($19.6 million total funds) to eliminate certain provider rate reductions (commonly referred to as the “AB 97 provider rate reductions”), including those for nurses, chronic dialysis clinics, respiratory care providers, blood banks, psychologists, and various others.

Equity and Practice Transformation Payments. The spending plan provides $350 million General Fund ($700 million total funds) over the next five fiscal years, including $70 million General Fund ($140 million total funds) in 2022-23, for equity and practice transformation payments. These payments are to provide grants to providers that will support various activities including, but not limited to, the implementation of electronic health record systems, improved data collection and exchange, and care management systems. A portion of the funding will also be used for a statewide learning collaborative for grantees.

PHE-Related Adjustments. During the PHE, various changes were made to the Medi-Cal program. These included the suspension of eligibility determinations (which increased the caseload from what it otherwise would be), increased utilization of telehealth, COVID-19 testing, and various temporary benefit expansions. The spending plan includes various adjustments to the Medi-Cal budget regarding the continuation and anticipated unwinding of the PHE.

• Additional Federal Medical Assistance Percentage (FMAP) Due to PHE Extension. The federal government increased its share of cost for Medi-Cal (referred to as the FMAP) for the duration of the PHE. The spending plan assumes that the PHE will be extended through mid-October 2022, which means that the increased FMAP will remain in effect through December 2022. As such, the spending plan assumes $3.5 billion in General Fund savings in 2021-22 and $2.3 billion in General Fund Savings in 2022-23 as a result of the increased federal financial participation in Medi-Cal. At the time of this post’s publication, the federal government had extended the PHE to January 2023, resulting in additional General Fund savings in 2022-23 beyond what is included in the spending plan.

• Caseload Increases Related to the PHE. As part of the PHE, eligibility redeterminations were largely suspended leading to increased caseload. The spending plan includes $2.5 billion General Fund ($8.9 billion total funds) in 2021-22 and $3.1 billion General Fund ($11.1 billion total funds) in 2022-23 associated with increased caseloads.

• COVID-19 Testing in Schools. The spending plan includes $200 million General Fund in 2021-22 for the state to directly purchase COVID-19 tests for schools and $102 million General Fund ($405 million total funds) in 2022-23 for schools to bill Medi-Cal for COVID-19 testing.

• Funding to Continue Certain Policies Established During the PHE. The spending plan includes $71 million General Fund ($177 million total funds) to continue various benefit expansions that were temporarily provided as part of the PHE, including (1) $37 million General Fund ($73 million total funds) to continue presumptive eligibility for individuals who are 65 and older, blind, or disabled; (2) $21 million General Fund ($44 million total funds) for increased rates for intermediate care facilities for the developmentally disabled; (3) $7 million General Fund ($47 million total funds) to continue separate billing for COVID-19 vaccines by Federally Qualified Health Centers; and (4) $6 million General Fund ($13 million total funds) to pay Medicare rates for oxygen and respiratory durable medical equipment.

• Funding for County Eligibility Redeterminations. Once the PHE ends, counties will have 14 months to complete redeterminations of eligibility for all Medi-Cal enrollees. The spending plan includes $18.3 million General Fund ($36.5 million total funds) in 2021-22 and $54.8 million General Fund ($109.5 million total funds) in 2022-23 to support the associated increase in county workload.

• Telehealth. During the PHE, the utilization of telehealth services increased in Medi-Cal. The spending plan includes $46.8 million General Fund ($132.5 million total funds) for a new telehealth policy that will be implemented upon the end of the PHE. The policy is a result of a telehealth advisory workgroup convened pursuant to Chapter 143 of 2021 (AB 133, Committee on Budget). The new policy will maintain the rates currently paid for telehealth services, include various changes to protect patient consent and choices, and reduce the use of audio-only visits in favor of in-person or video-only visits.

Changes to Benefits and Delivery Systems. The spending plan makes various changes to benefits provided through Medi-Cal, including the following:

• Home- and Community-Based Alternatives (HCBA) Waiver. The spending plan includes $151.7 million General Fund ($303.5 million total funds) to implement changes to the HCBA waiver. The waiver increases the number of slots available, expands the community transition services, adds pediatric day health centers licensed to operate a transitional health care needs optional services unit, increases the rate paid to personal care agencies, and adds assistive technology and paramedical services as services.

• Medi-Cal Dental Policy Evidence-Based Practices. The spending plan includes $12.9 million General Fund ($12 million total funds) to implement a Medi-Cal dental policy that includes evidence-based practices consistent with the American Association of Pediatric Dentists and the American Dental Association.

• Health Enrollment Navigators. The spending plan adds $30 million General Fund ($60 million total funds) to the health enrollment navigators project annually through 2025-26. The health enrollment navigators project was initially established in 2019 on a three-year, limited-term basis to provide counties and community-based organizations (CBOs) with funding to provide potentially eligible Medi-Cal populations with outreach and assistance applying for and maintaining enrollment in Medi-Cal.

• Tribal Projects. The spending plan includes $30 million one-time General Fund for tribal investments, including $15 million to support the construction of a regional wellness center for the Yurok Tribe and another $15 million for the construction of The Village San Francisco.

• Family Planning, Access, Care and Treatment (FPACT) Human Papillomavirus (HPV) Vaccine Coverage. The spending plan provides $4.6 million General Fund ($8 million total funds) to expand the FPACT program to include HPV vaccines for individuals between the ages of 19 through 45.

• Conforming to Federal Law on Coverage of Clinical Trials. The spending plan includes $1.6 million General Fund ($4.3 million total funds) to expand coverage of clinical trials to come into compliance with the federal definition of clinical trials, which is broader than the definition previously used by Medi-Cal.

• Doula Benefit. Doula services include personal support during pregnancy, childbirth, and the postpartum experience. Beginning January 1, 2023, Doula services will be added as a preventative service in Medi-Cal. The spending plan includes $377,000 General Fund ($974,000 total funds) for this benefit.

Reduce Medi-Cal Premiums to Zero. Most Medi-Cal enrollees do not pay premiums. However, state residents with certain characteristics and who have incomes above standard Medicaid thresholds may enroll in Medi-Cal provided they pay monthly premiums. The spending plan includes $19.7 million General fund ($53.3 million total funds) to reduce these premiums to zero.

Funding for Legislative Priorities. The 2022-23 budget package also includes funding for various priorities of the Legislature, including (1) $40 million General Fund for the California Health Facilities Financing Authority to provide cash flow loans to non-designated state hospitals, (2) $20 million General Fund for a Los Angeles County reproductive health pilot program, (3) $15 million General Fund (increasing to $30 million General Fund in 2023-24) to support equity and infrastructure payments for clinic abortion providers, (4) $10 million General Fund for supportive housing in Alameda County, and (5) $10 million General Fund to backfill lost federal Title X family planning funding.

Behavioral Health

Behavioral Health Bridge Housing (BHBH) Program

Supports Immediate Housing and Treatment Needs of People Experiencing Unsheltered Homelessness With Serious Behavioral Health Conditions. The spending plan includes $958 million General Fund in 2022-23 for local assistance and $42 million General Fund in 2022-23 for state operations (for a total of $1 billion General Fund) to support the BHBH program. The spending plan also includes another one-time $500 million General Fund for this program in 2023-24. The BHBH program will provide immediate housing and treatment needs for people experiencing unsheltered homelessness with serious behavioral health conditions. BHBH funding will focus on providing operational supports in various bridge housing settings, including assisted living facilities, senior care facilities, and tiny homes.

BHBH Investments Intended to Complement Existing Behavioral Health Continuum Infrastructure Program (BHCIP). The 2021-22 Budget Act included over $1.6 billion General Fund (about $2.2 billion total funds) over three years to DHCS to provide competitive grants to local entities to increase behavioral health infrastructure, predominantly by constructing, acquiring, or renovating facilities for community behavioral health services. However, these BHCIP infrastructural projects will take years to complete. For this reason, the BHBH program focuses specifically on addressing immediate needs in existing facilities (such as assisted living and senior care facilities) or facilities that are relatively inexpensive and quick to build (such as tiny home villages). See the “Behavioral Health Continuum Infrastructure Project” section below for more details on the separate and distinct BHCIP. See also, the 2022-23 California Spending Plan: Housing and Homelessness post for more information on other housing- and homelessness-related spending plan items.

CARE Court

Background: Legal Conservatorships and Long-Term Involuntary Treatment. Under current law, the Lanterman-Petris-Short (LPS) Act, people with severe mental illness can only be compelled into long-term involuntary treatment if placed under a legal conservatorship. Generally, to be placed under a legal conservatorship under the LPS Act, a court must find that a person is at risk of physical harm due to being unable to provide food, clothing, and shelter for oneself due to a mental health disorder.

The Community Assistance, Recovery, and Empowerment (CARE) Act Creates a New Judicial Process to Compel Individuals With Severe Mental Illness to Engage With Various Behavioral Health Services. Senate Bill 1338 (Umberg)—passed late in the 2021-22 session—establishes the new CARE Court Program. A person referred to the CARE Court is called a “respondent.” A respondent can be referred to the CARE Court by certain qualified members of the community, including family members and members of the person’s household, licensed behavioral health professionals, and first responders who have had repeated interactions with the respondent. If the CARE Court finds that the respondent is either “unlikely to survive safely in the community without supervision and the person’s condition is substantially deteriorating” or “in need of services and supports in order to prevent a relapse or deterioration that would be likely to result in grave disability,” the court may order the respondent to follow a “CARE plan.” CARE plans can mandate the respondent receive medication, housing, and other behavioral health services and supports. Counties that fail to comply with their obligations under the CARE plan (for example, by not providing the mandated behavioral health services) could face fines of up to $1,000 per day per violation (not to exceed $25,000 for each individual violation), which would be reallocated to the county that paid the fine for purposes of serving individuals who would qualify for a CARE plan.

Spending Plan Includes Funding for State Entities and Counties to Administer CARE Court. The spending plan includes $77.2 million General Fund for DHCS, $5 million General Fund for CalHHS, and $6.1 million General Fund for the judicial branch in 2022-23 to administer the CARE Court Program. Of the $77.2 million for DHCS, $57 million is to be provided directly to counties for the implementation of CARE Court. In 2022-23, the majority of this local assistance funding will go to the first cohort of counties (Glenn, Orange, Riverside, Stanislaus, Tuolumne, and San Francisco) that must implement the CARE Court Program no later than October 1, 2023. The remaining counties will not need to implement the program until December 1, 2024. As a result, funding augmentations will be proposed in the 2023-24 budget to account for the additional counties participating in the new program.

Children and Youth Behavioral Health Initiative

Major New Multiyear Spending Initiative Approved Last Year. This year’s spending plan includes roughly $2 billion in General Fund expenditures approved last year as part of the $4.5 billion multiyear Children and Youth Behavioral Health Initiative. This initiative funds a variety of programs administered by multiple state departments intended to transform behavioral health service delivery for children and youth under age 25. The estimated expenditures on this initiative across these multiple departments in 2022-23 are summarized in Figure 4 below.

We note that we discuss the separate but related augmentation for “Urgent Needs in Children’s Behavioral Health” suicide prevention grants later in this section.

Behavioral Health Continuum Infrastructure Program

Program Approved Last Year Provides Grants to Local Entities to Acquire or Rehabilitate Facilities for Behavioral Health Treatment. As approved in last year’s spending plan, this year’s spending plan includes $1.4 billion General Fund in 2022-23 ($1.7 billion total funds) to DHCS to provide competitive grants to local entities for behavioral health infrastructure. Grants provided under this program are intended to fund a variety of community behavioral health facility types to treat individuals with varying levels of behavioral health needs. In 2021-22, funds were allocated for grants for mobile crisis infrastructure and county and tribal planning. In 2022-23, the funding is allocated to the Children and Youth Behavioral Health Initiative ($480.5 million General Fund in 2022-23) and other “addressing gaps” areas yet to be determined by DHCS ($960.7 million General Fund in 2022-23).

Urgent Needs and Emergent Issues in Children’s Behavioral Health

One-Time Funding Across Multiple Departments. The spending plan includes a one-time appropriation of $250 million General Fund spread over three years to address urgent needs and emergent issues in behavioral health for children and youth ages 25 and younger. This is an augmentation separate from the multiyear Children and Youth Behavioral Health Initiative. The funds are allocated among DHCS, CDPH, and HCAI. For DHCS, the spending plan includes $121 million General Fund in 2022-23 ($175 million General Fund over three years) to support programs in the following areas:

• Wellness and Resilience Building Supports for Children, Youth, and Parents. The spending plan provides $85 million General Fund over three years. This funding will support grants to schools, cities, counties, tribes, and CBOs to implement programs that build wellness and resilience for youth and their parents.

• Video Series to Provide Parents With Skills to Support Their Children’s Mental Health. The spending plan provides $15 million General Fund over three years. This funding will support the development of a video series for families on child and youth social and emotional development and mental health topics, including practical information and tools to help parents increase their own and their child’s wellbeing and resilience.

• Leveraging of Emerging Technologies for Remote Mental Health Assessment and Intervention. The spending plan provides $75 million General Fund over three years. This funding will support the development of a strategy to leverage new and emerging technologies, artificial intelligence, and social media platforms to protect the behavioral health of children and youth and reduce potential harms. In particular, the effort will focus on new technological applications and tools that can improve access to supports and services.

See the “CDPH” and “HCAI” sections of this post for a description of the programs related to the urgent needs and emergent issues in children’s behavioral health that will be overseen by those departments.

Other Behavioral Health Augmentations

Other significant behavioral health augmentations in the spending plan include the following:

• Los Angeles County Misdemeanor Incompetent to Stand Trial (IST) Population Services and Supports. The spending plan includes $100 million General Fund in 2022-23 to Los Angeles County to support the county’s efforts to build infrastructure and fund rental subsidies that would increase access to community-based treatment and housing for the misdemeanor IST population.

• Medication Assisted Treatment Expansion Program. The spending plan includes $96 million General Fund ($101 million total funds) in 2022-23 and $61 million General Fund in 2023-24 and ongoing to support the Medication Assisted Treatment Expansion Project in further reducing overdose and death related to opioid misuse.

• CalHOPE Program. The spending plan includes $11 million General Fund for 2021-22 and $80 million General Fund for 2022-23 to continue the CalHOPE program when federal grants expire in May 2022. CalHOPE provides crisis services to Californians through web services and the CalHOPE mental health crisis warm line. The spending plan also includes $16 million General Fund in 2022-23 to support the separate peer-run warm line administered by the Mental Health Association of San Francisco.

• CalAIM Implementation Resources. Previously approved in the 2021-22 spending plan, this year’s spending plan includes $45 million General Fund in 2022-23 to continue the Behavioral Health Quality Improvement Program, a program that makes incentive payments to participating counties when they meet CalAIM milestones in reforming behavioral health payment models and policy changes.

• Medi-Cal Qualifying Community-Based Mobile Crisis Services. The spending plan includes $16 million General Fund in 2022-23 ($108 million total funds) to add qualifying community-based mobile crisis intervention services as a mandatory Medi-Cal benefit for a period of five years.

• Behavioral Health Care Workforce Development. This augmentation is discussed earlier in the “Crosscutting Issues” section write-up on “Health Workforce Development,” which includes the behavioral health workforce.

Department of State Hospitals (DSH)

Overview. Under the spending plan, General Fund spending for DSH will be $2.9 billion in 2022-23, an increase of $281 million, or about 11 percent, from the revised 2021-22 expenditure estimate. This net increase generally reflects the continued implementation of programs addressing issues with long waitlists among the IST population.

Felony IST Waitlist Solutions

The Felony IST Waitlist Solutions Workgroup. Individuals who have been tried with a felony but are deemed by a mental health professional to be IST (felony ISTs) are referred to DSH for treatment. Felony ISTs receive treatment with the goal of restoring them to competency in order to proceed with their felony trials. In 2016, the California courts held that felony ISTs have a constitutional right to competency restoration services within a reasonable period. As a result, the Felony IST Waitlist Solutions Workgroup was established in 2021 to develop solutions to the growing felony IST waitlist.

Spending Plan Provides Funding to Implement the Solutions Proposed by the Workgroup. The spending plan includes $489 million General Fund in 2022-23, $436 million in 2023-24, $472 million in 2024-25, and $592 million General Fund per year in 2025-26 and ongoing to DSH to implement solutions identified by the workgroup. This funding will support the following programs:

• Early Stabilization and Community Care Coordination. This program will provide access to treatment at the earliest point possible upon IST commitment when individuals are arrested and booked into jail.

• Expansion of Diversion and Community-Based Restoration Capacity. This program will serve eligible felony IST defendants in intensive community-based services as an alternative to a place in a DSH bed. If the defendants are successful in the program, their charges will be dropped.

• IST Discharge Planning and Coordination. This program will support improved coordination with county behavioral health departments and provide treatment records to DSH for ISTs who cycle through the criminal justice system.

• Improvement of the Quality of Mental Health-Related Evaluations, Including Competency Determinations. This program will support improvements to the quality of IST determinations and decisions regarding the need for medications.

Other DSH Augmentations

Electronic Health Records Project. The spending plan includes $2 million General Fund in 2022-23, $20 million General Fund in 2023-24, $21 million General Fund in 2024-25, and $8 million General Fund in 2025-26 and ongoing to prepare for and support the operation of the enterprise Continuum Electronic Health Records Project, including upgrades to the wireless local area networks at all five DSH hospitals.

California Department of Public Health

Overview. The spending plan includes $6.8 billion from all fund sources for CDPH in 2022-23, down 25 percent compared to revised 2021-22 expenditures ($9 billion). CDPH plays one of the state’s leading roles in responding to the COVID-19 pandemic. Since the onset of the pandemic, CDPH has received various state and federal allocations for COVID-19 response activities, which has caused the total level of spending in the CDPH budget to fluctuate significantly year over year. While the total CDPH budget averaged around $2.8 billion annually in each of the five years preceding the pandemic, it increased to $3.6 billion in 2019-20, to $5.8 billion in 2020-21, and to $9 billion in 2021-22, before declining to $6.8 billion in the current budget. The General Fund provides $3 billion of the 2022-23 CDPH budget (including $1.8 billion through CERF for COVID-19 response), down from $3.7 billion (including $1.6 billion through CERF) in 2021-22.

Public Health Foundational Support

A Prior-Year Commitment for Significantly Increased Ongoing Funding for Public Health. When closing out the 2021-22 budget, the Governor and Legislature committed to providing $300 million in ongoing General Fund support for state and local public health departments beginning in 2022-23. The 2021-22 budget included $3 million General Fund one time for CDPH to conduct a review of essential public health infrastructure requirements—using the pandemic as context—to inform a proposal for how to spend the $300 million. CDPH formed a “Future of Public Health” workgroup, completed the review, and produced a memo, Investments and Capabilities Needed for the Future Public Health System in September 2021 and provided a proposed spending plan for the $300 million to the Legislature in January 2022.

Ongoing Increased General Fund Support for Public Health Begins in 2022-23. The 2022-23 spending plan includes the $300 million General Fund ongoing for state and local public health departments, allocated as follows.

CDPH Receives $99.6 Million General Fund. The spending plan provides $99.6 million General Fund and authority for 404 positions to CDPH. The funding in the initial year (2022-23) is available for expenditure until June 30, 2024 and will be allocated as shown in Figure 5. We note that CDPH is also responsible for providing coordination, planning, and technical assistance to local health jurisdictions (LHJs) as they build up their infrastructure.

• LHJs Receive $200 Million General Fund. The spending plan provides $200.4 million to California’s 61 LHJs (58 counties and three cities). The funding in the initial year (2022-23) is available for expenditure until June 30, 2024. Each LHJ receives a base amount of $350,000. The remaining funding is allocated proportionately across LHJs: 50 percent based on LHJs’ population size; 25 percent on LHJs’ levels of poverty; and 25 percent on LHJs’ population share of black/African-American, Latino, or Native Hawaiian/Pacific Islander residents. LHJs must meet the following requirements to receive funding:

• Spend 70 percent on staffing, including benefits and training, and no more than 30 percent on equipment, supplies, travel, and other administrative purposes.

• Submit a public health plan by December 30, 2023 and by July 1 every three years after that. The plans must be based on the LHJs’ Community Health Assessment, Community Health Improvement Plan, or Strategic Plan, and should include proposed evaluation methods and metrics.

• Certify that funds increase, rather than replace, existing local funds for public health.

Additional Funding to Develop IT, Data Science, and Informatics Framework for Public Health. In addition to the $300 million in ongoing support for public health, the spending plan provides funding and position authority for strategic planning and implementation activities related to modernizing public health IT systems, expanding data sharing, and developing data science and informatics capabilities. These efforts are consistent with recommendations made by the Future of Public Health Workgroup. In 2022-23, the spending plan includes up to $36 million General Fund—$20.1 million available until June 30, 2024 and up to an additional $15.9 million, which is contingent on completion of planning documents approved by CalHHS and the California Department of Technology. The spending plan also includes authority for 33 positions beginning in 2022-23 and $18.1 million General Fund ongoing beginning in 2023-24.

Public Health Workforce

The spending plan includes $20.8 million General Fund on a one-time basis and is available until June 30, 2025 to support recruitment, training, and retention of public health workers in various careers and career stages. Funding is allocated as follows:

• Public Health Pathways Training Corps—$8 Million General Fund. This program, originally created during the COVID-19 pandemic, provides fellowships and internships for workers early in their public health career. Budget bill language requires CDPH to submit a report to the Legislature by July 1, 2026 about the results of this program.

• Public Health Workforce Career Ladder Education and Development Program—$3.2 Million General Fund. This program supports additional education and training for current employees who have worked for CDPH or an LHJ for at least one year. Budget bill language requires CDPH to submit a report to the Legislature by July 1, 2026 about the results of this program.

• Public Health Microbiologist Trainees—$3.2 Million General Fund. Funding supports trainee programs to increase the number of public health microbiologists in the state.

• Lab Aspire Program—$3.2 Million General Fund. This program provides training and preparation for individuals to direct local public health labs.

• California Epidemiologic Investigation Service Training Program—$3.2 Million General Fund. This program provides leadership training to increase the number of epidemiologists in leadership positions in California.

COVID-19 Response

Direct COVID-19 Response Expenditures. CDPH continues to play an important role in the state’s ongoing response to COVID-19. The spending plan includes $3.4 billion General Fund (through CERF) for these activities. Of the total, $1.6 billion is reflected in 2021-22 and $1.8 billion in 2022-23. Funding supports vaccine education and administration, testing, contact tracing, surge staffing, operations (including CDPH’s emergency call center), support at the California-Mexico border for migrant and border communities, epidemiological surveillance, and treatment and therapeutics. CDPH will continue to seek federal support and reimbursement for many of these costs.

IT Systems. In addition to direct COVID-19 response expenditures, the spending plan includes the following funding amounts and position authority to maintain and fully implement a dozen IT systems involved in—or developed specifically for—the state’s COVID-19 response:

• $235.2 million General Fund and 130 positions in 2022-23.

• $156.1 million General Fund and 140 positions in 2023-24.

• $61.8 million General Fund and 140 positions in 2024-25 and ongoing.

These IT systems include the California Reportable Disease Information Exchange (CalREDIE), the state’s disease reporting and surveillance system used by LHJs and by more than 350 labs; CA Notify, which notifies an individual if they test positive for an infectious disease; and CalCONNECT, the state’s contact tracing system.

Monkeypox (MPX) Response

The Governor declared a state of emergency on August 1, 2022 concerning the outbreak of the MPX virus across the state. The spending plan includes $41.4 million General Fund one time for CDPH ($25.5 million) and LHJs ($15.75 million) to respond to the MPX virus. Of the local funding, $1.5 million must be provided to CBOs to support clinics administering vaccines. The budget provides flexibility to CDPH to transfer funding between CDPH and LHJs as needed and upon notification to the Legislature. The budget requires CDPH to consult with LHJs about the most effective ways to communicate with at-risk communities, distribute vaccinations, and conduct testing and treatment.

Climate Change

Regional Climate Planning. The spending plan provides $25 million one-time General Fund, available until June 30, 2025, to support regional planning for the health effects of climate change. Funding will support a planning process within each of the state’s five Public Health Officer Regions (Bay Area, Northern California, Greater Sacramento, San Joaquin Valley, and Southern California) and will include participation by LHJs, CBOs, and tribes in each region. Each region will assess its vulnerability to the health effects of climate change and collect information about current local planning and activities to mitigate and respond to the health effects of climate change. With technical assistance from CDPH, each region will prepare a “Climate Change and Health Resilience Plan” to address identified risks and propose interventions.

Climate Change Surveillance. The spending plan provides $10 million General Fund ongoing and authority for 30 positions to conduct surveillance of the health impacts of climate change and provide near real-time notification to LHJs, first responders, and the community about health risks. To do so, CDPH will participate in the federal Centers for Disease Control and Prevention’s BioSense Platform, which collects and integrates patient data from emergency departments, labs, and other health care settings and provides analytic tools to spot emerging and escalating health threats.

Extreme Heat. As part of a $300 million multi-department package to address the impacts of extreme heat (for more details on the overall package, please see our office’s separate post on the spending plan for natural resources and environmental protection), the spending plan provides $3 million one-time General Fund to CDPH for two activities. First, CDPH will conduct outreach to employers with vulnerable workers about the health risks of extreme heat and how to mitigate the effects. Second, CDPH will train its staff who license long-term care facilities, including skilled nursing facilities, about the health effects of extreme heat on patients and residents and how to reduce these adverse effects.

Children and Youth Behavioral Health

Youth Suicide Prevention Outreach and Grant Program. The spending plan provides $40 million one-time General Fund, available until June 30, 2025, for a media campaign and grant program to reduce and prevent youth suicide. The grants will be provided to CBOs to reinforce the messages in the media campaign and to implement evidence-based suicide prevention strategies at the local level.

Youth Suicide Reporting and Crisis Response Pilot Program. The spending plan includes $25 million General Fund in both 2022-23 and 2023-24 for a pilot program testing a suicide and attempted suicide reporting and response model. The pilot will be conducted over three years in at least four counties or regions with higher prevalence of youth suicide or whose youth are at higher risk of suicide (including American Indian, black, Latino, and LGBTQ+ youth). The pilot will make youth suicide or attempted youth suicide a public health reportable event and use contact tracing to connect affected individuals, family, friends, teachers, and others to crisis services and other support services.

Other Public Health General Fund Augmentations

The spending plan includes $148 million General Fund to augment, expand, or initiate several programs. Several are highlighted below.

• Home Visiting and Black Infant Health—$50 Million General Fund Ongoing. Funding will support expansion of the Home Visiting Program ($37.5 million) and the Black Infant Health Program ($12.5 million) into additional counties.

• Reproductive Health—$17 Million General Fund One Time. This funding supports grants to CBOs ($15 million) for outreach and education about sexual health and reproductive health. In addition, CDPH will develop a website with information about abortion rights and resources ($1 million) and conduct research on unmet needs for access to reproductive health care services ($1 million).

• Accountable Communities for Health—$15 Million General Fund One Time. This funding supports and expands community-based approaches to addressing social determinants of health.

• Sexually Transmitted Infections—$13 Million General Fund in Each of Three Years. This funding supports developing a strategy to address a growing syphilis and congenital syphilis outbreak ($10 million), and conducting outreach and screening of hepatitis B ($3 million), including connecting patients to care.

• Alzheimer’s Healthy Brain Initiative—$10 Million General Fund One Time. This funding, which is available until June 30, 2025, provides additional support to the six LHJs currently participating in the program and expands the program in up to six additional LHJs.

• Books for Low-Income Children—$10 Million General Fund One Time. This funding supports distribution of books to young children through California’s Women, Infants, and Children (WIC) program. Funding is available until June 30, 2025.

• Dental Residencies and Rotations—$10 Million General Fund One Time. This funding supports CDPH’s Office of Oral Health in establishing community-based dental rotations for dental students in areas with shortages of dentists. Funding is available until June 30, 2027, at which time CDPH will report to the Legislature on program outcomes.

Covered California

Financial Assistance for Covered California Enrollees. The spending plan allocates $304 million from the Health Care Affordability Reserve Fund in 2022-23 for financial assistance to Covered California enrollees. Beginning in 2023-24, $304 million in ongoing General Fund will be used to continue the financial assistance. The funding can be used to provide financial assistance to California residents with household incomes at or below 600 percent of the federal poverty level. The program cannot go into effect until approved by the Director of Finance following ten days notification to the Joint Legislative Budget Committee.

Department of Health Care Access and Information

Overview. The state is spending $717 million General Fund on HCAI operations and programs in 2022-23. Of this amount, $52 million is ongoing, reflecting an increase of $1.8 million (3.6 percent) over the revised 2021-22 level. The ongoing increase reflects technical adjustments. The remaining $665 million is one time. New one-time initiatives in this year’s budget are focused on HCAI’s core missions of improving health care access and affordability and supporting the state’s health workforce. Below, we summarize the major one-time initiatives in each area.

Health Care Access and Affordability

Establishes New Insulin Manufacturing Initiative. The spending plan provides $100 million one-time General Fund in 2022-23 (available for expenditure through 2025-26) for a new initiative to manufacture insulin. Of this funding amount, $50 million will support a contract with a private manufacturer to produce and sell insulin. The remaining $50 million in 2022-23 will support the construction of a new manufacturing facility to be owned and operated by the private manufacturer. Additionally, the spending plan provides $2.8 million over four years ($700,000 in 2022-23) for HCAI’s associated state operations costs, primarily to hire a consultant to oversee the contract.

Supports Initiatives to Improve Access to Reproductive Health. The spending plan provides HCAI $80 million one-time General Fund in 2022-23 for various initiatives aimed at improving access to reproductive health. Of this amount, $40 million is for grants to reproductive health care providers to support abortion services. The funds will subsidize services for individuals who lack health care coverage and have incomes below 400 percent of the federal poverty level. Another $20 million supports the Abortion Practical Support Fund, which provides grants to pregnant persons seeking an abortion or to organizations that help connect pregnant persons to abortion services. Trailer legislation—Chapter 47 of 2022 (SB 184, Committee on Budget and Fiscal Review)—further establishes the initiative’s parameters. Additionally, $20 million supports grants to providers to enhance security and patient privacy infrastructure. (As noted in the “Health Workforce Development” section, an additional $40 million one-time General Fund supports two reproductive health workforce-related initiatives.)

Formally Establishes Office of Health Care Affordability. The budget package includes trailer legislation—Chapter 47 of 2022 (SB 184, Committee on Budget and Fiscal Review)—formally establishing the Office of Health Care Affordability at HCAI. The legislation tasks the office with collecting and analyzing data on health care costs, establishing statewide and sector-specific health care cost targets, imposing financial penalties on health care entities that fail to meet these targets, and publicly reporting information on health care spending trends. Additionally, the office is expected to monitor and promote (1) the adoption of alternative health care payment models, (2) spending on primary care and behavioral health, (3) the stability of the state’s health care workforce, and (4) overall quality and equity in health care. The legislation also establishes the Health Care Affordability Board to oversee the office. To support the office’s activities, the budget reappropriates $30 million one-time General Fund in 2022-23 originally provided in the 2021-22 budget. The budget package also anticipates additional one-time and ongoing funding for the office in future years.

Workforce Development

Supports Numerous New Health Workforce Initiatives. The spending plan provides HCAI $1 billion one-time General Fund and $10 million one-time Mental Health Services Fund over three years ($259 million General Fund and $10 million Mental Health Services Fund in 2022-23) for various health workforce initiatives spanning caregiving, primary care, behavioral health, and other health professions. The “Health Workforce Development” section provides more information on these and other new workforce initiatives in this year’s spending plan.

Continues Implementing Existing Behavioral Health Initiative. The spending plan provides $125 million General Fund in 2022-23 to HCAI for the workforce components of the Children and Youth Behavioral Health Initiative, a multiyear initiative adopted in the 2021-22 budget package. Under the initiative, HCAI received $600 million one-time General Fund in 2021-22 and is expected to receive an additional $75 million one-time General Fund in 2023-24. The “Children and Youth Behavioral Health” section provides more information on the entire initiative.

Appendix

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