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May revision funds behavioral health workforce, authorizes PBM data reporting and expands HPD scope
Summary
The Department of Health Care Access and Information told the Senate subcommittee about May Revision proposals to implement BH Connect workforce initiatives using Prop 35 funds, to expand the Health Care Payments Database and to require pharmacy benefit managers to submit detailed data to HCAI.
The Senate Budget Subcommittee No. 3 heard May 20 from the Department of Health Care Access and Information (HCAI) on a package of May Revision items that would fund behavioral health workforce programs, expand the state’s data infrastructure and require pharmacy benefit manager (PBM) reporting.
Elizabeth Landsberg of HCAI outlined implementation plans for BH Connect workforce initiatives, including HCAI requests for positions and authorization to administer a suite of labor management cooperation committee (LMCC) grants funded in part with Proposition 35 dollars. "These funds would be used to meet the emergent needs of the state and re put in providing access to reproductive health services," Landsberg said when describing a separate Prop 35 allocation for reproductive health and midwifery education; HCAI and Department of Finance staff said some of the Prop 35 expenditures are limited by non‑supplantation rules and stakeholder advisory requirements.
HCAI Deputy Director Libby Abbott described workforce funding requests linked to the BH Connect waiver and asked for public contract code exemptions and statutorily-authorized use of third‑party administrators to move the programs quickly. Abbott said the "up to $1,900,000,000 is actually predominantly federal funds leveraged with the state contribution" and that the funds would be applied across five work streams focused on behavioral health workforce expansion.
Scott Chrisman (HCAI) laid out a separate proposal to revise funding for the Health Care Payments database (the all‑payer claims database), reducing the governor's original ongoing staffing proposal and instead asking for a one‑time appropriation in 2025‑26 to continue implementation. Chrisman also presented a joint HCAI/DMHC initiative that would require PBMs to report granular drug pricing, utilization and rebate information to HCAI and would convert PBM registration into a licensure regime at the Department of Managed Health Care. He said data collected would include wholesale acquisition costs, rebates and fees, prescription and member counts, and would be grouped by national drug code and therapeutic category to allow deeper analysis of vertical integration and cost drivers.
The Legislative Analyst's Office said it had not raised concerns yet but was still reviewing details. Department of Finance representatives and multiple senators pressed HCAI on how Prop 35 funds may be used, whether investments would be short term only, and on how the administration is balancing limited‑term workforce grants with needs for ongoing provider rate support. HCAI said Prop 35 includes a stakeholder advisory committee with legislative seats, and that certain Prop 35 restrictions—particularly a non‑supplantation clause for the first two years—limit the ability to use those funds for direct provider rate increases.
No vote was taken; subcommittee members asked for additional details about the Prop 35 spending plan, matching federal funds, and how HCAI would coordinate the use of third‑party administrators and statutory language to implement these proposals.
