SB 246: Medi-Cal: graduate medical education payments.

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. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law requires the department, subject to any necessary federal approvals and the availability of federal financial participation, to make Medi-Cal payments to designated public hospitals (DPHs) and their affiliated government entities, as defined, in recognition of the Medi-Cal managed care share of graduate medical education (GME) costs. Existing law requires that the payments consist of direct and indirect GME payments made in recognition and support of the direct costs incurred in the operation of GME programs and the increased operating and patient care costs associated with teaching programs, respectively.

Under existing law, the nonfederal share of these payments consists of voluntary intergovernmental transfers (IGTs) of funds provided by DPHs or their affiliated government entities, or other eligible public entities, as specified. Under existing law, the continuously appropriated DPH GME Special Fund is established for these purposes.

This bill would require the department, subject to any necessary federal approvals and the availability of federal financial participation, to make additional Medi-Cal payments to district and municipal public hospitals (DMPHs), defined as nondesignated public hospitals, and to their affiliated government entities, in recognition of the Medi-Cal managed care share of GME costs. Under the bill, these payments would be made in a manner consistent with the methodology for GME payments to DPHs and their affiliated government entities and would consist of the above-described direct and indirect GME payment components. The bill would authorize the department to seek federal approval for other forms of GME payments to DMPHs and their affiliated government entities, as specified.

Under the bill, the nonfederal share of payments under these provisions would consist of voluntary IGTs of funds provided by DMPHs or their affiliated government entities, or other eligible public entities, to the extent permitted under certain federal regulations and other applicable federal Medicaid laws, and with no state General Fund moneys being used to fund the nonfederal share of payments. The bill would establish the DMPH GME Special Fund, with moneys deposited being continuously appropriated to the department for purposes of these provisions.

The bill would require the department to seek any necessary federal approvals for GME payments, effective no sooner than January 1, 2026. The bill would authorize the Director of Health Care Services to modify the requirements set forth in these provisions to the extent necessary to meet federal requirements or to maximize federal financial participation, as specified.

Sponsors

Sponsors by party (alphabetical): Democratic 2 · Republican 4

“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. October 3, 2025Chaptered by Secretary of State. Chapter 308, Statutes of 2025.
2. October 3, 2025Approved by the Governor.
3. September 10, 2025Enrolled and presented to the Governor at 2 p.m.
4. September 4, 2025In Senate. Ordered to engrossing and enrolling.
5. September 4, 2025Read third time. Passed. (Ayes 77. Noes 0. Page 2907.) Ordered to the Senate.
6. September 2, 2025Read second time. Ordered to third reading.
7. August 29, 2025From committee: Do pass. (Ayes 15. Noes 0.) (August 29).
8. August 20, 2025August 20 set for first hearing. Placed on APPR. suspense file.
9. June 17, 2025From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 15. Noes 0.) (June 17). Re-referred to Com. on APPR.
10. June 5, 2025Referred to Com. on HEALTH.
11. May 29, 2025In Assembly. Read first time. Held at Desk.
12. May 29, 2025Read third time. Passed. (Ayes 38. Noes 0. Page 1323.) Ordered to the Assembly.