May Revise: ~2M UIS Medi-Cal Members Transition From Managed Care to Fee-for-Service Jan 1, 2027 — Compounds State-Only PPS Elimination

Governor Newsom's May 14 May Revise proposes transitioning approximately 2 million Medi-Cal members with Unsatisfactory Immigration Status (UIS) from managed care to fee-for-service effective January 1, 2027 — projected $583.8M GF 'savings' in 2026-27, $1.5B ongoing. This is a NEW line item not in prior tracking, distinct from the State-Only PPS elimination (July 1, 2026) already tracked. FFS transition fundamentally changes how FQHCs get paid for ~2M patients: disrupts managed care contracts, ECM/Community Supports flow, and care coordination revenue streams that are MCP-dependent. Heaviest exposure: AltaMed, FHCSD, La Clinica, Clinica Sierra Vista, United Health Centers, Family Healthcare Network. Pairs with the May Revise $68.3M ECM cut (separate item) as a compounding revenue + operational threat for FQHCs serving undocumented populations. Strategic implication for FQHC CFOs: (1) Model FY27 cash flow under FFS-for-UIS scenario — payment timing changes from monthly capitation to ~60-day FFS claim cycles; (2) Re-paper MCP contracts to exclude UIS member rosters; (3) Brief boards on operational complexity (UIS member roster identification, dual payment paths during transition); (4) Engage CPCA + Health4All coalition on June 15 conference committee push to block the FFS transition.