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Subcommittee presses DHCS on Prop 35 rollout, advisory committee vacancies and federal deadlines
Summary
DHCS briefed the subcommittee on how Proposition 35 (MCO tax) will fund Medi‑Cal provider rate increases and multiple program buckets; lawmakers pressed DHCS about stakeholder advisory committee appointments and the risk of missing federal deadlines that could forfeit matching funds.
Department of Health Care Services staff told the Senate Budget Subcommittee No. 3 that Proposition 35 (passed November 2024) reallocates revenues from the managed‑care organization (MCO) tax to a set of targeted Medi‑Cal investments and provider rate increases. DHCS described a multi‑year implementation approach and presented initial allocation amounts for calendar years 2025 and 2026.
DHCS said Prop 35 guarantees $2 billion in calendar years 2025 and 2026 to support the Medi‑Cal program and presented a list of allocations including, among other items, $691 million for primary care, $575 million for specialty care, $245 million for community and outpatient procedures, $90 million for abortion and…
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