Concerns that “cost-effective” was being applied inconsistently across California led to a 2025 state law. That law requires the Department to develop a clear definition of “cost-effective” for use everywhere in California. The law is intended to minimize inconsistency by helping people with similar needs have access to similar supports.
Community engagement is central to getting this statewide definition correct. The Department held several webinars at the end of June to inform the development of the clear statewide definition of “cost-effectiveness”. These recordings and event materials are here:
It’s not too late to share your feedback! Public input is appreciated through the “Cost-Effective” survey through Friday, July 31, 2026.
Background
Many years ago, California’s developmental services, including the Self-Determination Program, were approved as a combination of a Medicaid state plan and some federal waivers. In exchange for accepting federal funding, states must follow federal Medicaid rules.
Federal rules require several factors to be met for the purchase of goods and services:
- Match with specific needs and preferences of the individual
- Be effective in helping the individual reach their Individual Program Plan (IPP) goals
- Consider the range of available service options
- Use generic services and other available funding sources first
- Consider family responsibility
- Be provided in the least restrictive most integrated setting
- Be cost-effective
Please know that “cost-effective” spending is not new. It is a federal requirement and does not limit an individual’s participation in any program. Cost‑effectiveness is part of ALL developmental services in California, including the Self-Determination Program.