Managed Care Organization Tax
On Nov. 5, California voters overwhelmingly approved Proposition (Prop) 35, making an existing tax on managed care organizations (MCO) permanent under state law — and directing most of the revenues toward expanding access to care for Medi-Cal patients through improved provider reimbursement. Now, work by the state, hospitals, and others to determine how these funds […]
DHCS to Convene Prop 35 Advisory Committee on April 14
What’s happening: The Department of Health Care Services (DHCS) is holding the first meeting of the Proposition (Prop) 35 “Protect Access to Health Care Act” Stakeholder Advisory Committee on April 14 from 11:30 a.m. to 3:30 p.m. (PT). This meeting is open to the public, and registration for virtual attendance is open.
What else to know: In November 2024, voters approved the Protect Access to Health Care Act of 2024 (Prop 35), which will deliver significant resources to providers who care for Californians covered by Medi-Cal (as much as $1.4 billion is expected to support hospitals in 2025 and 2026). The committee will advise and make recommendations to the department on implementing these Prop 35 payments. More details can be found on the DHCS website.
Budget Work Begins to Determine Prop 35 Payments
Following last week’s release of Gov. Gavin Newsom’s proposed $322 billion budget for 2025-26, work will now focus on ensuring allocations from a recently approved managed care organization tax are delivered in accordance with the intent of the ballot measure passed in November.
Prop 35 Passage Kickstarts Work to Develop, Implement Methodologies to Distribute Funding
What’s happening: On Nov. 5, California voters overwhelmingly approved Proposition (Prop) 35, making an existing tax on managed care organizations (MCO) permanent under state law — and directing most of the revenues toward expanding access to care for Medi-Cal patients through improved provider reimbursement. Now, work by the state, hospitals, and others to determine how these funds should be distributed begins.
What else to know: While Prop 35 specifies how much funding shall go to several different service categories, it does not set the methodologies for distributing the funds. The ball is now in the Department of Health Care Services’ court to develop these payment methodologies — in consultation with hospitals and other providers, including through a dedicated stakeholder advisory committee.