The 2025-26 Budget: Health Care Access and Information

Feb 20, 2025 - The prescription drug market involves a complex and opaque system of payments and players, complicating assessments of drug prices. One key issue is rebates —negotiated discounts that drug makers pay to health plans after drugs are purchased.
https://lao.ca.gov/Publications/Report/4979

The 2026-27 Budget: Department of Developmental Services

Mar 13, 2026 - To achieve this, statute specifies that provider payments should be linked to consumer outcomes. Specifically, statute provides that the fully funded provider rate models are to be implemented using two payment components: a base rate equaling 90   percent of the rate model and a quality incentive payment equaling up to 10   percent of the rate model, the latter of which is to be implemented through the quality incentive program.
https://lao.ca.gov/Publications/Report/5157

The 2026-27 Budget: Medi-Cal Analysis

Mar 2, 2026 - Limit on Directed Payments. H.R. 1 also reduces an existing limit on payments directed to certain providers through Medicaid managed care plans. These payments will now be set at the comparable rate paid by Medicare, rather than the average rate paid by private health plans.
https://lao.ca.gov/Publications/Report/5146

The 2025-26 California Spending Plan: Health

Oct 16, 2025 - Eliminates Supplemental Dental Payment. The spending plan eliminates supplemental payments for specific dental services, which were originally established in the 2017-18 Budget Act as part of the Proposition  56 (2016) spending plan.
https://lao.ca.gov/Publications/Report/5075

The 2022-23 Budget: Analysis of the Medi-Cal Budget

Feb 9, 2022 - Shift in the Timing of Payments, Leading to Lower Costs. Medi ‑Cal is budgeted on a “cash basis, ” meaning that costs are based on when payments are made rather than when services are delivered. Changes in the timing of payments occur regularly and are difficult to predict.
https://lao.ca.gov/Publications/Report/4522

The 2026-27 Budget: Medi-Cal Fiscal Outlook

Nov 19, 2025 - For new payment programs, this limit became effective July 2025. For existing payments, H.R. 1 allows states to gradually ramp down to the new limit beginning in January 202 8. Much of the hospital fee program supports additional managed care payments to private hospitals, and some of these payments were anticipated to exceed the Medicare limit in the 2025 fee program.
https://lao.ca.gov/Publications/Report/5092

Considering Medi-Cal in the Midst of a Changing Fiscal and Policy Landscape

Oct 24, 2025 - …As Will Public and Private Hospital Managed Care Payments … Payments to hospitals in the Medi ‑Cal managed care system also will decline over time. This is because of the required gradual reduction in managed care payments to the level paid in Medicare.
https://lao.ca.gov/Publications/Report/5083

The 2025-26 Budget: MCO Tax and Proposition 35

Feb 26, 2025 - This variation also can create challenges for state directed payments. For example , some directed payments require plans to increase their provider rates by a uniform dollar amount, regardless of the size of their base payments to providers.
https://lao.ca.gov/Publications/Report/4992

The 2021-22 Budget: Behavioral Health: Medi-Cal Student Services Funding Proposal

Feb 17, 2021 - Managed Care Plans Would Be Eligible to Earn Higher Payments for Specific Activities. In addition to the activities managed care plans would receive incentive payments for described above, managed care plans also would receive higher incentive payments for a subset of specific activities.
https://lao.ca.gov/Publications/Report/4377

The 2024-25 Budget: Medi-Cal Analysis

Feb 14, 2024 - While the Medicare program often is used as a benchmark for state Medicaid payment levels, there are trade ‑offs to tying Medi ‑Cal ’s provider payments to Medicare. Most notably, such an approach would tie Medi ‑Cal ’s provider payment adjustments to federal policy decisions.
https://lao.ca.gov/Publications/Report/4838