May Revise: ~2M UIS Medi-Cal Members Transition From Managed Care to Fee-for-Service Jan 1, 2027 — Separate From the Later-Delayed State-Only PPS Cut
Governor Newsom's May 14 May Revise proposed 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 was a new line item, distinct from the State-Only PPS elimination then tracked for July 1, 2026.
Signed-budget context: the June 29 budget later delayed the major State-Only UIS/PPS clinic-payment cut to July 1, 2027, so this item should be read as a separate managed-care/FFS operational proposal, not proof of a current July 2026 PPS elimination. FFS transition would still disrupt managed care contracts, ECM/Community Supports flow, and care coordination revenue streams that are MCP-dependent.
Key takeaways
- ~2M UIS Medi-Cal members transition MC→FFS effective Jan 1, 2027 ($583.8M GF savings)
- NEW line item — separate from the State-Only PPS cut later delayed to July 1, 2027 in the signed budget.
- FFS = ~60-day claim cycles vs. monthly capitation — cash flow timing disruption
- Re-paper MCP contracts to exclude UIS rosters; engage CPCA + Health4All June 15 push
Primary source
DHCS May Revise Highlights / CA Budget CenterAffected FQHCs
FQHC Talent. (2026, May 14). May Revise: ~2M UIS Medi-Cal Members Transition From Managed Care to Fee-for-Service Jan 1, 2027 — Separate From the Later-Delayed State-Only PPS Cut. Primary source: DHCS May Revise Highlights / CA Budget Center. Retrieved July 6, 2026, from https://www.fqhctalent.com/intel/may-revise-uis-managed-care-to-ffs-jan-2027
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