CA's FQHC UIS-PPS Cut ($1B/yr) — Deferred to July 1, 2027 in Signed Budget
UPDATE (June 30, 2026): the 2026-27 California budget signed June 29 DELAYS this cut 12 months to July 1, 2027 ($1.034B General Fund appropriated for 2026-27). The analysis below describes the cut if it takes effect.
Originally slated for July 1, 2026, California's proposal eliminates use of the Prospective Payment System for FQHC services to state-only-funded individuals with unsatisfactory immigration status (UIS). FQHCs would 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 scored this as $1 billion in annual General Fund savings, meaning $1 billion in annual FQHC revenue loss when implemented. FQHCs with large undocumented patient panels — concentrated in LA, San Diego, and Central Valley — face the most severe July 1, 2027 exposure unless the next budget extends the reprieve.
Key takeaways
- Deferred to July 1, 2027 in the signed 2026-27 budget — PPS rates for UIS patients then replaced by regular Medi-Cal FFS (50-70% less per encounter)
- CA LAO scored this as $1B in annual General Fund savings = $1B in annual FQHC revenue loss when implemented.
- UIS adult dental reduction is also deferred to July 1, 2027 in the signed budget.
- FQHCs in LA, San Diego, and Central Valley with large undocumented panels face most severe exposure
Primary source
California Health Care FoundationSource packet
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Affected FQHCs
FQHC Talent. (2026, March 8). CA's FQHC UIS-PPS Cut ($1B/yr) — Deferred to July 1, 2027 in Signed Budget. Primary source: California Health Care Foundation. Retrieved July 28, 2026, from https://www.fqhctalent.com/intel/ca-pps-elimination-uis-july-2026
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