AB 1113: Federally qualified health centers: mission spend ratio.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services, including federally qualified health center (FQHC) services as described by federal law. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

This bill would require each FQHC to have an annual mission spend ratio, as defined, of no less than 90% and would provide a methodology for calculation of that ratio, as specified, until the State Department of Public Health (department) has adopted a methodology for this purpose, with a goal of implementation of the latter methodology by January 1, 2028.

By June 30, 2027, and annually thereafter by June 30, the bill would require each FQHC or its parent corporation to report to the department total revenues collected in a form to be determined by the department. The bill would require each report to include, among other things, one of certain Internal Revenue Service (IRS) forms. The bill would require each FQHC to submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund these provisions. The bill would require the department to calculate and prepare a report of each FQHC’s mission spend ratio no later than 90 days after the deadline for receipt of each FQHC’s submission. The bill would require the department to conduct an audit of the financial information reported by FQHCs every 3 years, as specified.

This bill would impose penalties for failure of an FQHC to comply with the above-described reporting and mission spend ratio requirements, including an administrative fine of $5,000 for a first violation and $10,000 for each subsequent month that an FQHC fails to submit an annual report. The bill would require those penalties to be deposited into the Mission Spend Ratio Penalty Account, which would be subject to appropriation by the Legislature, within the Special Deposit Fund.

This bill would require an FQHC to abate the violation within 2 years after the department imposes an administrative penalty. The bill would prohibit the FQHC from being required to pay the penalty if it meets specified requirements within the abatement period, including reaching an agreement with the department on a plan to spend the total amount of the administrative penalty on mission-directed expenses within 2 years. The bill would require the department to conduct annual audits of any FQHC that has reached an agreement with the department. If the department determines that an FQHC is not in substantial compliance with the agreed-upon plan, the bill would require the FQHC to pay the imposed administrative penalty within 2 working days and to pay other costs, as specified. The bill would provide that appeals run concurrently with the abatement period.

This bill would authorize an FQHC to apply to the department for a waiver providing a temporary pause of the above-described reporting and mission spend ratio requirements or for an alternative mission spend ratio requirement on the basis of unexpected or exceptional circumstances or the FQHC’s economic condition. The bill would provide that a waiver or alternative mission spend ratio is for a term of one calendar year. The bill would prescribe various types of information to be reported by an FQHC to obtain a waiver or alternative mission spend ratio. The bill would authorize the department to provide an alternative mission spend ratio to an FQHC to adjust, exclude, or otherwise account for imminently planned capital improvement, as specified, if the assessed penalty will result in the inability for the planned capital improvement to move forward during the next calendar year. The bill would authorize an FQHC to apply to renew a waiver or alternative mission spend ratio at any time no fewer than 180 days before the expiration of the existing waiver or alternative mission spend ratio.

Sponsors

Sponsors by party (alphabetical): Democratic 1

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. February 2, 2026From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.
2. January 31, 2026Died pursuant to Art. IV, Sec. 10(c) of the Constitution.
3. January 26, 2026Re-referred to Com. on RLS.
4. January 22, 2026Read second time and amended.
5. January 22, 2026From committee: Amend, and do pass as amended and re-refer to Com. on RLS. (Ayes 11. Noes 4.) (January 22).
6. January 22, 2026Assembly Rule 63 suspended. (Page 3806.)
7. May 23, 2025In committee: Hearing postponed by committee.
8. May 21, 2025Joint Rule 62(a), file notice suspended. (Page 1627.)
9. May 21, 2025In committee: Set, first hearing. Referred to APPR. suspense file.
10. May 14, 2025In committee: Hearing postponed by committee.
11. May 6, 2025Re-referred to Com. on APPR.
12. May 5, 2025Read second time and amended.