California HCBS rates rise in 2026

Effective January 1, 2026, the California Department of Health Care Services (DHCS) implemented reimbursement rate increases for select Home and Community-Based Services (HCBS) waivers and programs. DHCS tied these adjustments directly to the statewide minimum wage increase from $16.50 to $16.90 per hour.

The updated reimbursement rates reflect a required alignment between Medi-Cal payment rates and mandated labor cost increases. Under California law, Medi-Cal reimbursement rates must account for mandated increases in labor costs. As the statewide minimum wage rises, DHCS updates provider payment rates to help agencies cover higher staffing expenses and maintain service delivery.

The rate updates apply across various HCBS waivers and long-term services and supports programs. This includes programs serving individuals with intellectual and developmental disabilities. DHCS notes that the specific impact of the rate changes varies by waiver, service type, and billing code.

Providers billing under affected programs can expect the updates to require close attention to DHCS documentation and internal systems. Key actions include:

• Review official DHCS Medi-Cal rate notices for each program you bill under.

• Confirm updated rates in your billing and financial systems prior to January 1, 2026.

• Assess staffing budgets and payroll projections based on the new reimbursement levels.

• Monitor for follow-up guidance or clarifications issued by DHCS.

DHCS framed the adjustments as a step to stabilize the HCBS workforce, support provider sustainability, and ensure continued access to community-based services across California.