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Legislature Passes Budget Funding Medi-Cal Pay and Primary Care Residencies


Thanks to the tremendous grassroots advocacy of the CAFP Residency Network, CAFP Key Contacts, our Government Relations team and advocacy partners in Sacramento, the Legislature passed a State Budget that increases Medi-Cal physician payment and saves ​last year's $100 million allocation to the Song-Brown Physician Training Program, which provides grants to primary care residency programs in underserved areas treating underserved populations. ​​The Governor’s original proposal to cut to Song-Brown would have cause family medicine residency programs to close or significantly reduce the number of family physicians they train.


The budget also directs a portion of the tax money raised by Proposition 56 to improve Medi-Cal physician payment. CAFP and the physician community worked hard to pass Proposition 56 because an increase in tobacco taxes is a proven way to reduce tobacco use and save health costs. Prop 56 was also a major opportunity to do something the Legislature and Governor have been unwilling to do – raise Medi-Cal’s 47th​-in​-the​-​nation provider payment rates. Having the third worst payment rates in the country makes it very difficult for physicians to see Medi-Cal patients without losing money on each visit and has been extremely detrimental to access to care for Medi-Cal patients. The language of the Proposition was clear that 82 percent of the revenue raised was to be used to improve access to care by increasing Medi-Cal payment rates. Of the $1.3 billion estimated to be raised by Proposition 56, however, the Budget allocates only $325 million for physician services and $140 million for dental services. While CAFP applauds the agreement that avoids the Governor’s original proposal not to use any of the funds to improve payment rates, we will closely monitor whether this reduced allocation adequately encourage physicians to increase their Medi-Cal panels and improve access to care. The Governor has until July 1 to sign the budget.