General Interest

California Budget Agreement Update

As the budget currently stands, many of the proposed cuts to aging services in Gov. Newsom’s May Revision are no longer present. In advance of tomorrow’s vote on the fiscal plan, LeadingAge California created a summary of the provisions in the budget that affect our membership


The budget agreement includes the following provisions relating to Medi-Cal:

  • Protects the Community Based Adult Services (CBAS) program (also known as Adult Day Health Care or ADHC).
  • Restores $54.3 million from the General Fund to continue all Medi-Cal optional benefits that were proposed to be eliminated in the May Revise, including, among other things, adult dental.
  • Restores the 2019 augmentation for the Caregiver Resource Centers.
  • Rejects the May Revise proposal to reinstate a pre-2016 Medi-Cal estate recovery policy, which recovered the costs of all health care services from deceased beneficiaries’ estates. Includes $16.9 million General Fund to continue the current policy which recovers only long-term care costs, consistent with federal requirements.
  • Rejects the May Revise request to restore the “senior penalty” in Medi-Cal, thereby continuing to implement the increase in income eligibility for the Aged and Disabled Program to 138 percent of the federal poverty level approved in the 2019 Budget Act.
  • Rejects the May Revise request to eliminate the Medicare Part B disregard to determine eligibility for the Aged and Disabled program, pursuant to AB 1088 (Wood, Chapter 450, Statutes of 2019). This proposal expands the program to incomes between 123% and 138% of the federal poverty level. DHCS estimated this proposal would result in General Fund savings of $478,000.


  • The budget agreement rejects the Governor’s May Revision proposal that would have, absent a federal funds trigger restoration, withheld and absorbed the anticipated federal January 2021 cost of living adjustment to the SSI portion of the SSI/SSP grant.

The Budget agreement also includes reauthorization of the skilled nursing facility reimbursement methodology and the Quality Assurance Fee (QAF) program. The trailer bill includes many changes than previously reported in May.

  • QAF payments will continue as is for another two years with supplemental payments by April 30 of 2021 and 2020. The trailer bill requires the DHCS to convene a stakeholder process by September 1, 2021, to develop a successor supplemental payment or similar quality-based payment methodology to replace the supplemental payments.
  • The trailer bill now also contains language raising direct care penalties to $25,000 and $50,000. 
  • The trailer bill also authorizes the department to make annual Medi-Cal reimbursement increases contingent upon complying with CDPH’s COVID-19 Related AFLs.