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Published: January 8, 2021

Governor’s Proposed Budget Maintains Health Spending

Governor Gavin Newsom released his 2021-22 State Budget proposal today, marking the beginning of a five-month long budget negotiation with the State Legislature. Despite dire predictions last year of a significant budget shortfall, California’s fiscal outlook looks strong for 2021-22 with a multibillion-dollar surplus. Many health programs will be maintained or augmented, including $33 million in ongoing funding for the Song-Brown Primary Care Physicians Training Program. The budget also includes:

  • $300 million for COVID-19 vaccine distribution, including a public awareness campaign to increase vaccine adoption.
  • $94.8 million to expand and make permanent certain telehealth flexibilities authorized during COVID-19 for Medi-Cal providers, and to add remote patient monitoring as a new covered benefit (a more comprehensive statewide telehealth plan will be proposed in early January).
  • $3 million to grow and diversify the pipeline for the geriatric medicine workforce.
  • $63 million for the Office of Health Care Affordability – the Office seeks to increase quality and cost transparency, develop cost targets, and evaluate consequences for entities that fail to meet the targets.
  • $12.9 million to support and expand UC Programs in Medical Education (PRIME) and to establish a new PRIME program focused on Native American communities.
  • $1.1 billion to implement the California Advancing and Innovating Medi-Cal (CalAIM) program that seeks, among other goals, to improve quality outcomes, reduce health disparities, and drive delivery system transformation and innovation through value-based initiatives, modernization of systems, and payment reform.
  • $1.7 million to conduct an analysis of the intersection of COVID-19, health disparities, and health equity.

Programs slated to be suspended have received at least a one-year reprieve including:

  • Proposition 56 Medi-Cal provider supplemental payments (until July 1, 2022).
  • Medi-Cal post-partum eligibility extension (until December 31, 2022).
  • Medi-Cal Adult Optional Benefits, including audiology and speech therapy services, incontinence creams and washes, optician and optical lab services, and podiatric services (until December 31, 2022).

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