Gov. Gavin Newsom’s revised 2021-22 state budget proposal released May 14 includes major opportunities for dental practices and oral health care programs in California. The proposal provides additional relief for small businesses impacted by COVID-19 plus new funding for dental workforce development and Medi-Cal Dental Program (Denti-Cal) improvements that add new dental benefits, expand eligibility to vulnerable populations and protect recent investments in provider rates.
The May Revision came days after Gov. Newsom announced a historic budget surplus of over $75 billion ― especially unexpected following a year of pandemic-related shutdowns. The revision proposes to use that surplus to fund the governor’s $100 billion California Comeback Plan that includes an additional $1.5 billion for the California Small Business COVID-19 Relief Grant Program, direct stimulus payments for eligible taxpayers and billions to assist public schools, advance infrastructure and combat wildfires.
The latest relief is in addition to the $6.2 billion tax cut announced last month for businesses that received a Paycheck Protection Program loan or Economic Injury Disaster Loan advance to pay for debt obligations and worker protections related to COVID-19.
CDA in a statement released Friday applauded the governor for his “strong commitment to greater equity and access in the Medi-Cal Dental Program as well as economic recovery from the pandemic.”
The budget proposal highlights for dentistry and oral health care programs include:
The May Revision adds $90 million for dental workforce development through the High Road Training Partnerships, a California Workforce Development Board initiative that models partnership strategies in various industries across the state.
One partnership with CDA would support workforce training for individuals who seek a career in dental offices and specifically will expand training for allied health roles, including registered dental assistants. The budget proposal’s $90 million adds to the initial January investment of $25 million for a total investment of $115 million. CDA is advocating for a portion of the new funds for the dental assistant training.
An additional $1.5 billion for the California Small Business COVID-19 Relief Grant Program will reopen the program to eligible small businesses and nonprofit organizations that are impacted by pandemic-related health and safety restrictions. The program awards grants of between $5,000 and $25,000 based on the applicant’s annual gross revenue during the 2019 tax year.
Because most dentists in California are small businesses that were closed and providing emergency-only services in the early months of the pandemic and continue to pay costs associated with federal, state or local guidelines on required safety protocols, many dental practices should be eligible to apply for and receive the relief grant.
The program is currently closed, with six rounds of funding already completed, but CDA will keep members updated about future rounds of funding. The $1.5 billion in new funds brings the total program funding to $4 billion.
Legislation signed last year created the Main Street Small Business Tax Credit, which provides financial relief to qualified small businesses that laid off employees due to pandemic-related economic disruptions in 2020.
The initial application period closed Jan. 15 with all tax credits allocated, but the revised budget proposal adds new funds to reopen the applications.
Dental practices that had to lay off employees in 2020 due to disruptions in production with fewer patients seeking care may be eligible for a tax credit of $1,000 per each rehired full-time equivalent employee. Businesses are eligible if they experienced a 50% minimum decrease in gross receipts April-June 2020 compared to April-June 2019.
The revised budget proposal continues the supplemental Medi-Cal Dental reimbursements that apply to hundreds of dental codes and are otherwise due to expire in July 2022. The supplemental rates equal an increase of at least 40% and, in some cases, reach 80% of the average commercial payment.
Making the reimbursements permanent is a significant achievement that will provide much needed stability for Medi-Cal providers. The reimbursements are paid for with Proposition 56 (state tobacco tax) revenues.
The initiative known as CalAIM (California Advancing and Innovating Medi-Cal) would receive an additional $113 million, for a total of $230 million annually, to add new dental benefits and make permanent the successes of the Dental Transformation Initiative, such as pay-for-performance incentives for children’s preventive services, silver diamine fluoride, continuity of care and caries risk assessments.
More than 1,900 dental providers in California have enrolled in Medi-Cal since 2016, reversing a decades-long downward trend and opening access to hundreds of thousands of beneficiaries.
“CDA has been very active over the last five years to encourage dentists to participate in the Medi-Cal Dental Program,” said CDA President Judee Tippett-Whyte, DDS. “Ending the sunset date for Proposition 56 Medi-Cal reimbursements will help give providers greater certainty that the state is committed to maintaining the progress long term.”
The pilot dental managed care programs in Los Angeles and Sacramento counties have consistently underperformed compared with the rest of the state, falling behind in every evaluation metric. The pilot programs have been in place for over 20 years.
The May Revision would eliminate the two managed care programs and restore dental fee-for-service in the counties, thereby ensuring those county residents have equitable access to care.
Gov. Newsom has until June 15 to sign the final 2021-22 state budget. CDA will keep members informed about small-business relief, tax credits and other opportunities in the CDA newsroom and weekly newsletter.