CA Eliminates FQHC PPS Rates for Undocumented Patients July 2026 — $1B Annual Revenue Impact
Starting July 1, 2026, California's budget eliminates use of the Prospective Payment System for FQHC services to state-only-funded individuals with unsatisfactory immigration status (UIS). FQHCs will instead be paid at the regular Medi-Cal fee-for-service rate or negotiated managed care plan rates — roughly 50–70% less per encounter than the PPS rate ($200–400/visit).
The CA LAO scores this as $1 billion in annual General Fund savings, meaning $1 billion in annual FQHC revenue loss beginning 2026–27. FQHCs with large undocumented patient panels — concentrated in LA, San Diego, and Central Valley — face the most severe financial exposure.
Dental benefits for undocumented Medi-Cal enrollees also eliminated: $308M savings in 2026–27.
Key takeaways
- PPS rates eliminated for FQHC services to UIS patients starting July 1, 2026 — replaced by regular Medi-Cal FFS (50-70% less per encounter)
- CA LAO scores this as $1B in annual General Fund savings = $1B in annual FQHC revenue loss
- Dental benefits for undocumented Medi-Cal enrollees also eliminated: $308M savings in 2026-27
- FQHCs in LA, San Diego, and Central Valley with large undocumented panels face most severe exposure
Primary source
California Health Care FoundationAffected FQHCs
FQHC Talent. (2026, March 8). CA Eliminates FQHC PPS Rates for Undocumented Patients July 2026 — $1B Annual Revenue Impact. Primary source: California Health Care Foundation. Retrieved June 12, 2026, from https://www.fqhctalent.com/intel/ca-pps-elimination-uis-july-2026
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