Healthcare Facilities & Managed Care "California DPP Approved: Minor..."

Research evidence excerpt

Healthcare Facilities & Managed Care "California DPP Approved: Minor..."

Global Research

20 July 2026ab

Healthcare Facilities & Managed Care Equities

AmericasCalifornia DPP Approved: Minor Impact for HCA/

UHS; Modest Potential Benefit for THC Healthcare Providers

AJ Rice

Analyst

aj.rice@ubs.com

2025 California DPP Approved; Recognition More likely in 3Q than 2Q +1-212-713 4299

Last week, CMS posted the approved preprint for California's calendar year 2025 private Joseph Overman

hospital directed payment program (DPP). The $8.8 bln program is ~23% larger than the Associate Analyst

comparable calendar year 2024 program. While the approval letter has a formal date of joseph.overman@ubs.com

June 26th, hospitals are often not notified about approvals until around the time that +1-212-882 0086

CMS posts the approved preprint. it also generally takes time for hospitals to receive Michael Wei

details about the specifics of the program, which is particularly relevant given the size Associate Analyst

and complexity of California's provider tax and supplemental payment programs. Given michael.wei@ubs.com

this, we believe it is more likely for the hospital companies to recognize the catchup +1-212-713 2565

payments in 3Q rather than in 2Q earnings later this week. Jonathan Yong

Details on 2024 (Previous Year) Program jonathan.yong@ubs.com

California publishes facility level data for supplemental payments and provider taxes, +1-212-713 6268

which is available for the 2025 calendar year program, but not yet available for the James Kurek

recently approved 2025 program. Based on our analysis of the 2024 program, HCA Analyst

received about ~$129 mln of payments from the DPP and $182 mln total from all james.kurek@ubs.com