Funding & Budget

CalAIM Section 1115 Waiver Expires December 2026 — $1.2B/Year at Stake

The CalAIM waiver authorizing Enhanced Care Management and Community Supports expires December 31, 2026. Without renewal, an estimated $1.2 billion annually in ECM/Community Supports funding disappears — threatening thousands of care coordination, CHW, and housing navigator positions at FQHCs statewide.

The $50B rural health fund is now real money with real deadlines: Florida June 17, Alaska June 22, Indiana July 1, Tennessee July 6-20 — and FQHCs must compete for every dollar

Six months after CMS announced all 50 states' Rural Health Transformation Program Year-1 awards (Dec 29, 2025; $147M for New Jersey to $281M for Texas), the state sub-grant windows FQHCs can actually apply to are opening in a cluster: Florida's RFA closes June 17; Alaska's $272M application portal closes June 22; Indiana's $120M GROW coalition applications are due July 1; Tennessee's CARE Grant RFP runs July 6-20; West Virginia is posting $60M+ in rolling two-week windows. The fine print that decides who benefits: CMS caps rural-hospital/provider allocations, the money is one-time against permanent Medicaid cuts (Georgetown CCF calls the mismatch structural), at least 32 states wrote CHW workforce development into their plans (NASHP), Tennessee tied full funding to eliminating Certificate of Need by January 2027, and several states route funds through regional coalitions FQHCs must join rather than apply to alone. CMS reviews state progress beginning late summer; Year-2 amounts land in October. For rural health centers this is the largest additive federal money of 2026 — but it must be chased state by state, deadline by deadline.

The first post-H.R. 1 budget season splits the states: New York invests $80M in FQHCs while Colorado cuts rates 2% and New Jersey stares into a $3.6B/yr hole

With ~46 states starting FY2027 on July 1, the first budgets written entirely after H.R. 1 sort the country into camps. BACKFILLERS: New York ($1.5B in new Medicaid funding including $80M specifically for FQHC rates — the largest named FQHC investment of the cycle — plus a permanent provider tax), Connecticut ($5M routed directly to FQHCs from its Federal Cuts Response Fund), New Mexico ($40M for immigrant coverage plus an insurer surtax), and Minnesota ($205M to stabilize HCMC plus a $500M hospital uncompensated-care reserve). CUTTERS: Colorado (2% Medicaid provider rate cut effective July 1, with 65% of its health centers already at negative margins), Florida (special session weighing 3% hospital cuts), and structurally, New Jersey ($3.6B/yr permanent federal loss as its provider-tax mechanism phases down — the inverse of New York's). California sits unresolved past its June 15 deadline with the MCO tax in the balance. The divergence is the strategy lesson: the same federal law produces opposite state responses depending on whether a provider-tax mechanism survives — which is exactly what California is fighting about this week.

LA County's Measure ER Passes — the $1B/Year Safety-Net Sales Tax Pulls Ahead by ~24,000 Votes as 'Yes' Prevails on Late Ballots; Backers Declare Victory June 10, County Certifies by July 2

Update (June 10): Measure ER has come from behind to WIN. LA County's half-cent (0.5%) health sales tax now leads ~50.4% yes / ~49.6% no — ahead by roughly 24,000 votes out of ~1.9 million counted — after trailing by ~25,500 on June 5 and ~11,500 on June 7; backers declared victory June 10 as the final late-arriving mail ballots broke 'yes' (the count climbed 47.3% → 48.5% → 49.66% → 50.4%). The county certifies by July 2 and the California Secretary of State by July 10, but the outcome is no longer in doubt. The tax takes effect October 1, 2026 (countywide rate 9.75% → 10.25%), raising ~$1 billion a year through 2031 — roughly 45% flowing directly to nonprofit clinics serving uninsured patients, ~22% to LA County Health Services (the hospital and specialty-referral backbone every LA FQHC depends on), and the remainder need-weighted by ED volume — to backfill H.R. 1 Medi-Cal cuts and shore up county hospitals, clinics, and public health. For LA-area FQHCs this is the positive resolution of the central FY2027-28 question: the largest local-government replacement for federal Medicaid cuts in the country now arrives exactly as the July 1 UIS-PPS cut lands and LA Health Services absorbs a >$662M (rising to ~$700M by 2029) federal revenue decline while consolidating three county health centers. It does NOT erase the state-budget risk — LA County's June 8 alarm warns the Sacramento budget (June 15 deadline) could still cut provider rates on top of the federal loss. The statewide pattern now reads 2 wins (Santa Clara Measure A + LA Measure ER) vs. 1 loss (Contra Costa Measure B, ~42% yes): voters will fund a county-anchored health system but rejected Contra Costa's general-fund version.

House Appropriations approves the FY2027 Labor-HHS bill 34-28 — with no Community Health Center Fund extension, the Dec 31 cliff now rides on a bill that doesn't exist yet

The House Appropriations Committee approved the FY2027 Labor-HHS-Education bill on June 9, 2026 on a party-line 34-28 vote, funding HHS roughly 4% below FY2026. The structural point for health centers: appropriations only carry the ~$1.9B discretionary slice of Health Center Program funding — the mandatory Community Health Center Fund (~$4.6B/yr, ~70% of federal CHC money) expires December 31, 2026 and requires separate reauthorizing legislation from Energy & Commerce / Senate HELP, where no bill has been introduced. The party-line vote also signals FY2027 appropriations won't pass by October 1, making another continuing resolution near-certain — a CR holds discretionary funding flat but does nothing for the mandatory cliff. NACHC's 288-House/57-Senate sign-on letters remain the only vehicle-in-waiting; the realistic path is a year-end package, which means health center boards should plan Q1-2027 cash positions assuming the cliff resolves late, retroactively, or partially.

LA County's public health system issues a June 8 warning: without a state budget deal, it faces 'reduced patient services, staff layoffs, and potential facility closures'

On June 8, 2026 Los Angeles County issued a formal public warning that, absent urgent action in the state budget, its public healthcare system will be forced to consider 'reduced patient services, staff layoffs, and potential facility closures.' This escalates the already-tracked LA DHS 'Save Our Safety Net' hiring freeze and three-health-center consolidations to explicitly name closures — and lands days before the June 15 constitutional budget deadline as the Legislature remains split over MCO-tax renewal vs. an employer fee. LA Health Services is the specialty/trauma/ED backstop the largest safety-net county's FQHCs (and their disenrolled Medi-Cal patients) depend on; the county projects a ~$700M federal-revenue decline by 2029. Threatened closures would redirect patients to community FQHCs that have no capacity buffer the same summer the July 1 UIS-PPS cut and Medi-Cal dental elimination land.

California's MCO Tax Has a Second, Earlier Cliff: CMS Approved It Only Through June 30 — a ~$1.1B General Fund Hole if the Extension to December Isn't Granted

Beneath the better-known June 15 budget standoff and the December 31 MCO-tax expiry sits a third, less-discussed date: CMS approved a transition period for California's current Managed Care Organization (MCO) tax only through June 30, 2026. H.R. 1 prohibits taxing Medicaid managed-care plans at a higher rate than commercial plans, and California's current MCO tax does not meet that test — so it can only continue under a transition window. The Governor's budget *assumes* CMS grants an additional six-month extension through December 31 (when the tax is already scheduled to sunset); if CMS withholds that extension, the LAO and the May Revision both flag an additional ~$1.1 billion General Fund cost in 2026-27 to backfill the lost revenue. That matters for FQHCs because the MCO tax is the federal-match mechanism behind the Medi-Cal primary-care, maternal-care, and non-specialty behavioral-health rate floor centers rely on to supplement non-PPS revenue — and the gap would open June 30, the same day many county budgets adopt and the day before the July 1 UIS-PPS cut. This is distinct from the June 15 budget standoff (Senate's $285/employee fee vs. MCO-tax renewal): even a budget deal can't override the federal June 30 transition limit. The May Revision separately proposes a *new* MCO tax effective January 1, 2027 ($575M in 2026-27, ~$2.3B/yr in 2027-29).

El Centro Regional Medical Center Receives $11M CA Distressed Hospital Payment — Stabilizes Imperial Valley's Only General Acute-Care Hospital

California approved an $11 million distressed hospital supplemental payment for El Centro Regional Medical Center, the only general acute-care hospital in Imperial County. The payment comes through the CA DHCS Distressed Hospital Supplemental Payment Program. El Centro Regional serves a predominantly Latino, agricultural, low-income border region — Imperial County has California's highest poverty rate and one of the state's highest Medi-Cal dependency rates (~80%+ of patients). For FQHCs operating in Imperial County, El Centro Regional is the critical specialty and inpatient referral anchor; its financial stabilization reduces the risk of FQHC patients losing access to in-county hospital care as Medicaid cuts approach. CA has deployed $400M+ in distressed hospital payments statewide in 2025-26 to prevent rural and safety-net hospital closures ahead of the H.R. 1 implementation.

Contra Costa Voters Reject Measure B — a ~$150M/Year Medicaid-Backfill Sales Tax Fails ~42%-58%, the First California County Safety-Net Tax to Lose in 2026

Contra Costa County's Measure B — a 0.625-cent general sales tax projected to raise ~$150 million a year for five years, placed on the June 2 ballot explicitly to 'address deep cuts in federal funding' — failed decisively. The June 5 count shows ~42.1% yes to ~57.9% no, down by more than 36,500 votes (it needed a simple majority). County staff had projected more than $300 million in health-system losses over five years, and the 'Safe & Healthy Contra Costa' campaign warned ~93,000 residents could lose coverage by 2029 and that H.R. 1 could cut ~$1.5 billion in federal contributions to Contra Costa Health over five years. Contra Costa Health runs the county hospital, its clinics, and Contra Costa Health Plan (~270,000 members) — so the 'no' vote means there is no local backstop for the July 1 UIS-PPS cut and the H.R. 1 Medicaid losses in a major Bay Area county. For independent Contra Costa FQHCs (LifeLong Medical Care, La Clínica de la Raza, Brighter Beginnings), the failure removes a potential referral-and-stability cushion and signals harder county-side competition for shrinking dollars. The bigger pattern: California's 'tax ourselves to backfill federal Medicaid cuts' model is now 2 wins (Santa Clara Measure A, ~$330M/yr, Nov 2025; LA's Measure ER passed June 10, ~$1B/yr) and 1 loss (Contra Costa B failed) — voters will fund a county-anchored health system but rejected Contra Costa's general-fund version.

DHCS Launches Official Federal Impact Tracker — County-Level Medi-Cal Enrollment-Loss Projections Through FY2029-30

The CA Department of Health Care Services (DHCS) published a public Federal Impact Tracker showing Medi-Cal enrollment-loss projections, revenue impacts, and coverage-loss scenarios by county through FY2029-30 under H.R. 1's Medicaid provisions. The tracker quantifies ~289,000 individuals losing Medi-Cal in FY2026-27 and up to 1.1 million by FY2029-30. For FQHC leaders, the county-level breakdown is the most useful data asset of the crisis: it lets CFOs model patient-volume loss by service area for board decks, annual budgets, and grant narrative justifications. High-exposure counties (Fresno, Kern, San Bernardino, Riverside, Tulare) where FQHCs serve the largest share of Medi-Cal patients face the steepest drops. The tracker is the state's official, DHCS-verified quantification of the H.R. 1 threat — more authoritative than third-party projections for advocacy use.

~210,000 San Diego County residents could lose Medi-Cal under proposed cuts — and the county pegs work-requirement admin costs alone above $300M

KPBS reports (June 2026) that advocates rallied outside state Sen. Akilah Weber Pierson's San Diego office on June 6 urging lawmakers to reject proposed state Medi-Cal changes that could strip coverage from roughly 210,000 San Diego County residents. Separately, the county estimates that the administrative cost of standing up the new Medicaid work requirement alone could exceed $300M, putting an estimated ~400,000 residents at risk of losing Medi-Cal and/or SNAP benefits. The 210,000 figure is a new named-county denominator for the statewide cuts — it directly threatens the patient-revenue base of San Diego's largest FQHCs (Family Health Centers of San Diego, San Ysidro Health, Neighborhood Healthcare, TrueCare, La Maestra) just as the July 1 UIS-PPS rate cut lands.

DHCS Posts Draft Clinic Policy Letter for State-Only FQHC/RHC Services — Stakeholder Webinar June 17, Rules Take Effect July 1

On June 3, 2026, DHCS posted a draft Clinic Policy Letter (a Second Addendum on its FQHC/RHC page) that operationalizes the July 1 shift away from Prospective Payment System (PPS) reimbursement for State-Only / Undocumented Immigrant Services (UIS) delivered by FQHCs and RHCs to Medi-Cal Managed Care Plan members. This is the implementation instrument behind the already-tracked UIS-PPS elimination — it sets the actual billing rules (MCP-negotiated / non-PPS rates) your revenue-cycle team must code to, not just the budget authority. A statutory interested-parties stakeholder webinar is scheduled for June 17, 2026, 10–11 a.m. PT — the last formal comment window before the July 1 effective date, now under a month out. FQHC CFOs, billing leads, and compliance officers should pull the draft CPL immediately, model the per-encounter revenue delta on their UIS panel, and decide whether to submit comment by June 17.

SAC Health Wins ~$3.6M Annual HRSA FQHC Grant — a Rare Positive as Inland Empire Counties Cut

On June 3, 2026, SAC Health — the nation's largest specialty-based, teaching FQHC, with 11 clinics across San Bernardino and Riverside counties — announced HRSA renewed its annual Section 330 FQHC operating grant at roughly $3.6 million to sustain and expand community healthcare access. The center delivers family medicine, pediatrics, women's health, dental, behavioral health, and 40+ medical and surgical specialties. The award is a rare positive data point in the Inland Empire, landing the same month Riverside County imposes a countywide hiring freeze and just ahead of the July 1 UIS-PPS reduction. It is a reminder that the federal Section 330 base grant (separate from the expiring $4.6B Community Health Center Fund supplement) continues to flow — a useful counterweight to the cliff narrative when FQHC boards model FY2026-27 revenue.

A counter-narrative: Family Health Centers of San Diego opens in-house radiology in Chula Vista with a $556K Molina donation

Even amid the funding cliffs, Family Health Centers of San Diego (FHCSD) opened mammography, X-ray, and ultrasound services at its Chula Vista Family Health Center in 2026, funded by a $556,000 Molina Healthcare donation — directly addressing one of FHCSD's highest specialty-referral needs (7,428 radiology referrals in a single month). Bringing imaging in-house on a sliding-fee basis shortens referral delays for uninsured patients and retains the imaging revenue (and the downstream care) inside the FQHC rather than leaking it to outside hospitals — exactly the kind of margin-protecting, vertical-integration move FQHCs need as the July 1 UIS-PPS cut squeezes per-visit reimbursement. A reminder that strong FQHCs are still expanding service lines, not only defending against cuts.

Revenue Recovery: CY2026 Opens New Medicare Care-Management Codes (APCM + 3 BHI Add-Ons) Billable by FQHCs — No Downside Risk

The CY2026 Physician Fee Schedule (CMS-1832-F, effective Jan 1, 2026) reshaped FQHC/RHC care-management billing — and most centers haven't operationalized it. Three actions: (1) Bill APCM monthly per-patient codes G0556 ($15.20), G0557 ($48.84), G0558 ($107.07) — centers shifted off G0511 on July 1, 2025; (2) Layer the three NEW behavioral-health-integration add-on codes G0568 (initial CoCM month), G0569 (subsequent CoCM), G0570 (general BHI) — billable alongside APCM with no time-based documentation requirement, making ~$263/patient/month achievable for complex BH-integrated patients; (3) Stop billing the now-sunset bundled codes G0512 and G0071 (Jan 1, 2026) and unbundle to the individual codes or lose the revenue. This is a no-downside-risk monthly revenue stream that directly offsets the July 2026 UIS-PPS loss — and it rewards the care-management and behavioral-health-integration work most CA FQHCs already do. See our Value-Based Care hub for the full code map; NACHC published a free 'VBC 101' staff resource and an APCM tip sheet to operationalize it.

Riverside County's $10.3B Budget Imposes a Countywide Hiring Freeze; $3.1B for Health Touches RUHS Clinics

Riverside County released its $10.3 billion FY2026-27 budget for public review with a hiring freeze on all General-Fund-supported departments (plus 'maximum fill rates' on mission-critical roles) and about $66.1M drawn from reserves. The budget allocates roughly $3.1 billion to health and hospital services — including Riverside University Health System (RUHS) and its FQHC-designated community health centers. Public budget hearings are set for June 8, with final adoption June 23. In a region where IEHP covers ~1.6 million Medi-Cal members, a countywide freeze signals reduced county clinic capacity just as the July 1 UIS-PPS cut lands — pushing demand toward independent Inland Empire FQHCs that receive no matching county referral funding.

Stanislaus County Warns H.R. 1 Could Cost Its Indigent-Care Program $37M–$66M Over Three Years

A Stanislaus County Health Services Agency report presented to the Board of Supervisors warns that H.R. 1 could cost the county-mandated Indigent Health Care Program $37 million to $66 million over three fiscal years, with about $2.3 million in Medi-Cal revenue loss in FY2027 and up to $12 million a year in treatment-cost impact. Roughly 217,000 county residents are on Medi-Cal; more than 70,000 are exposed to the changes, ~40,000 to work requirements, and ~5,000 lose CalFresh. As the county's legally-mandated indigent-care obligation gets squeezed, Central Valley FQHCs — Golden Valley Health Centers, Livingston Community Health, Community Medical Centers — absorb displaced patients, stacked on top of the July 1 UIS-PPS cut in a region with persistent provider shortages.

Sacramento County's $8.9B Recommended Budget Cuts Health Services $5.4M and Deletes 194.5 Positions — Hearings June 10-12

Sacramento County's recommended FY2026-27 budget totals $8.9 billion (down 2.8% from the prior year) and trims the Health Services base budget by $5.4 million, cuts Correctional Health by $4.1 million, and deletes 194.5 full-time-equivalent positions countywide — with funding for dozens of those positions tied directly to H.R. 1 revenue loss. Adoption hearings run June 10-12 at 700 H Street. For WellSpace Health and Sacramento Native American Health Center, the erosion of the county health backstop accelerates the patient-demand pipeline toward FQHCs without any matching county referral funding.

SLO County Closes Paso Robles Health Clinic While Balancing a $38.5M Deficit — Patients Redirect to an FQHC

San Luis Obispo County is closing its Paso Robles county health clinic at the end of May 2026 as part of balancing a $38.5 million budget deficit that eliminates a range of public-health services; budget hearings continue in June. The closure removes a public option for North County / Salinas River Valley agricultural-worker patients, who will be redirected to SLO Community Health Centers (an FQHC that operates a Paso Robles site) with no offsetting funding. It joins Santa Barbara County's pharmacy closures and the State-Only UIS PPS loss as a Central Coast safety-net contraction cluster — a capacity and recruiting signal for area FQHCs absorbing displaced demand.

LA Health Services Consolidates Three Health Centers — Antelope Valley & Torrance Close June 1, East LA July 1 — as Federal Cuts Near $700M by 2029

On May 28, LA County's Department of Health Services detailed the next phase of its 'Save Our Safety Net' plan: Antelope Valley Health Center services move to High Desert Regional and South Valley health centers (June 1), Torrance Health Center moves to Bellflower (June 1), and East LA Health Center moves to the Edward R. Roybal Comprehensive Health Center (July 1). DHS says it has already saved more than $230 million through a hiring freeze, reduced contract staffing, and tighter overtime — but projects Medicaid/Medi-Cal changes will cut its budget by more than $700 million by 2029. For FQHCs in the Antelope Valley/high-desert and South Bay/Torrance corridors, displaced county patients will seek care nearby — a near-term intake and capacity pressure (and a recruiting tailwind as county staff are reassigned or let go). This is the concrete, named-site follow-through on the broader $662M DHS federal-revenue decline already tracked.

CHCF Publishes 2026 California Community Clinics Almanac — the Year's Canonical Safety-Net Benchmark

The California Health Care Foundation released its 2026 California Community Clinics Almanac on May 28 — the authoritative annual dataset on the state's community health center sector. It documents that California's community health centers served roughly 7.4 million patients in 2024, with Medi-Cal the dominant payer, and tracks centers' growing reliance on patient-service revenue as the federal grant share of total revenue continues to shrink. For FQHC CFOs and boards, this is the benchmark report that quantifies why H.R. 1 Medicaid cuts and the State-Only (UIS) Medi-Cal freeze are existential: a sector whose revenue is overwhelmingly Medi-Cal-dependent has little cushion when Medi-Cal coverage and reimbursement contract. Expect this Almanac to be cited in board decks, grant applications, and Sacramento advocacy testimony all year.

Alameda County's $6.7B FY2026-27 Budget Closes a $91.4M Gap Without Layoffs — a Rare Bay Area Positive

Alameda County's recommended FY2026-27 budget, presented to supervisors May 28, closes a $91.4 million spending gap without layoffs or major service cuts — buoyed in part by the Measure W sales tax. Roughly 30% of county spending is healthcare and ~60% of county revenue is state/federal, so the 'no layoffs' outcome is a near-term stabilizer for Alameda Health System as the East Bay safety-net backstop, supporting referral capacity for FQHCs like LifeLong Medical Care, La Clínica de la Raza, and Asian Health Services. Hearings are set for June 22-23 and 25. Caveat: it is a one-year balance, not a structural fix — the underlying Medicaid exposure remains.

LA County DHS Launches 'Save Our Safety Net' — Consolidates 3 Health Centers + System-Wide Hiring Freeze as Federal Cuts Hit $700M by 2029

LA County Department of Health Services (DHS — the public hospital/clinic system, distinct from DPH) announced 'Save Our Safety Net' (SOS) on May 28, 2026, relocating Antelope Valley, Torrance, and East LA health-center services into hub facilities (effective June 1 / July 1) and imposing a system-wide hiring freeze. DHS cites a $662.2M FY26-27 federal revenue decline and a $700M+ budget hit by 2029 driven by H.R. 1. This is separate from the already-tracked DPH 7-clinic closures (Feb 2026). Strategic implication for LA FQHCs: (1) three DHS access points contracting in the Antelope Valley, South Bay, and East LA will redirect patient volume to nearby FQHCs (NEVHC/High Desert, AltaMed/East LA, South Bay clinics) — capacity-planning and county-FQHC contracting opportunity; (2) the DHS hiring freeze loosens a major public-sector hiring competitor, a near-term recruiting tailwind; (3) confirms the 'largest safety-net systems shrink first' pattern, putting FQHCs next in line for both demand and scrutiny.

Santa Cruz County's $1.29B Budget Avoids Layoffs — But Santa Cruz Community Health Flags a ~$2.3M/Year Hit From the July 1 UIS PPS Cut

Santa Cruz County's adopted FY2026-27 budget (~$1.29 billion) avoids layoffs by leaning on roughly $43 million in one-time funds, dropping reserves to about 10.4% — a one-year patch, not a structural fix. The sharper FQHC signal comes from Santa Cruz Community Health, which publicly estimates a ~$2.3 million annual revenue loss — affecting roughly 2,000 patients and 12,000 visits a year — when California eliminates the State-Only (UIS) PPS rate for undocumented Medi-Cal members on July 1, 2026 and shifts payment to the lower fee-schedule/managed-care rate. It is one of the first named-FQHC dollar figures quantifying the statewide UIS-PPS hit (CHCs are projected to lose at least $1.6B in FY2026-27), giving boards a concrete benchmark for modeling July 1 exposure and the service-reduction risk that follows.

Monterey County's $2.34B Budget Cuts 111 Positions as Natividad Flags $89M in At-Risk Federal Funding

Monterey County released its ~$2.34 billion FY2026-27 recommended budget with hearings opening May 27. Although total spending rises 5.3% year-over-year, the budget cuts 111 (largely vacant) positions, and Natividad — the county's safety-net hospital — reports roughly $89 million in supplemental federal funding at risk under H.R. 1. This is the county-fiscal and hospital-backstop angle, distinct from the already-tracked 'Esperanza Care 2.0' undocumented-coverage relaunch: a weakened Natividad strains the specialty-referral backstop that Salinas Valley FQHCs (Clínica de Salud del Valle de Salinas, Salud Para La Gente) rely on for their agricultural-worker patients.