What’s happening: At its May 19 meeting, the Proposition (Prop) 35 “Protect Access to Health Care Act” Stakeholder Advisory Committee heard stakeholder concerns about Gov. Gavin Newsom’s May budget revision, which redirects Prop 35 funding rather than allocating it for provider payment increases as intended.
What else to know: Despite this setback, the Department of Health Care Services (DHCS) detailed three proposals applicable to hospitals for calendar years (CYs) 2025-26.
The proposals would allocate:
- $75 million annually to expand graduate medical education programs at University of California campuses
- $255 million annually for emergency department facilities to support the non-federal share of existing directed payment programs
- $150 million annually to support the non-federal share of directed payment programs specific to designated public hospitals
During the public comment period, several provider groups shared their concern about the Prop 35 funding not going toward its intended purposes; CHA stated that the emergency department domain funding should be implemented expeditiously, and the funding for other domains should flow toward provider rate increases as opposed to funding base rates.
DHCS Deputy Director of Health Care Financing Rafael Davtian argued that despite the May revision “sweeping” a portion of Prop 35 funding to the state General Fund, CYs 2025-26 have distinct requirements as compared to CY 2027 and beyond, and the dollars will go toward expanded benefits and services as compared to CY 2024.
The committee also discussed feedback received from committee members following the April 14 meeting and explained DHCS’ four drivers for decision-making: ensuring legal compliance, promptly using funding, ensuring Medi-Cal fiscal sustainability, and advancing Medi-Cal program goals.
Feedback on the May 19 meeting is due to DHCS on May 30.
