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Agencies outline timetable and $18.7 billion estimate to shift to a 'cost‑of‑care' rate model
Summary
Department of Social Services and education officials described plans to replace market‑based rates with an alternative 'cost‑of‑care' methodology, estimated transition work would take roughly 24 months after statute and funding are set, and CDSS reported a July 2025 estimate of roughly $18.7 billion in direct service costs under the alternative methodology.
State agency witnesses told Assembly Budget Subcommittees that California is moving from a regional market‑rate structure toward an 'alternative methodology' based on the actual cost to deliver care, but cautioned that the transition requires statute changes, data systems work and multi‑year automation.
Jennifer Troia, Director of the Department of Social Services, described the alternative methodology as a measure of cost rather than parental ability to pay and said CDSS has submitted an alternative‑methodology assessment to the federal government. "From that period ... it would…
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