Proposition 35 - Provides Permanent Funding for Medi-Cal Health Care Services. Initiative Statute.

SECTION 1. Chapter 7.5 (commencing with Section 14199.100) is added to Part 3 of Division 9 of the Welfare and Institutions Code, to read: Chapter 7.5. Protect Access to Health Care Act of 2024 Article 1. Title, Findings and Declarations, Statement of Purpose 14199.100. Title This chapter shall be known and may be cited as the Protect Access to Health Care Act of 2024. 14199.101. Findings and Declarations The people of the State of California find and declare all of the following: (a) In 2019, Governor Newsom and the Legislature embarked on a series of investments and initiatives to improve the health care delivery system in California. These actions included extending health care coverage to all low-income Californians, starting California's own generic drug production to deliver low-cost insulin to patients, providing much-needed mental health services to all California schoolchildren, and initiating a multiyear commitment to the improvement of the MediCal program. (b) While these past several years have seen significant investment and initial outcomes appear to be successful, these investments are at risk in future years and need to be protected. (c) About 2 out of every 5 Californians, between 12 million and 15 million people, rely on the Medi-Cal program for health care coverage. This includes approximately four million children and two million seniors and people with disabilities. (d) However, just being enrolled in the Medi-Cal program does not guarantee access to quality health care. Most Medi-Cal reimbursement rates have not been adjusted in more than a decade, and some providers have not seen a payment increase in over 25 years. As a result, doctors and other health care providers struggle to take on new Medi-Cal patients. Relatedly, Medi-Cal patients, and in some areas entire communities, face a loss of access to critical and emergency care as essential hospital services such as labor and delivery are at risk of being reduced or eliminated. (e) The problem is exacerbated by a shortage of healthcare professionals in our state. The current strains on our health care system have left many health care workers physically and mentally exhausted, and thousands have left the profession altogether. This has left our health care system overstretched and made it even harder for the most vulnerable Californians to get access to care, including access to family planning services and other reproductive health care. (f) Medi-Cal patients may wait weeks or months to see doctors who are specialists. The situation is more challenging in rural areas of the state that have fewer primary care providers per person, which results in delays or inability to access basic health care services. (g) Obtaining adequate mental health services can take even longer. California suffers not only from a shortage of mental health care professionals, but also from a shortage of psychiatric beds and treatment for patients with serious mental health conditions. When patients with serious mental health needs cannot obtain adequate care, they frequently wait days in the emergency room or may ultimately be left untreated and become homeless. (h) All Californians continue to struggle with high prescription drug prices. When Californians cannot access the medications they need, our entire health care system suffers. (i) The lack of healthcare access and affordable prescription drugs for patients poses a health care risk for all Californians. When Medi-Cal patients are unable to refill a prescription or find a doctor, mental health facility, or other health care provider to treat them, they often end up in emergency rooms. This puts additional, and avoidable, strains on our state's emergency rooms. When Medi-Cal patients are forced to rely on emergency rooms as their primary source of health care, the additional strain makes it harder for all patients to obtain life-saving care. (j) Medi-Cal patients need the same access to health care and prescription medications as patients with private or employer-based health insurance. This is best and most directly accomplished by increasing reimbursement rates for doctors, hospitals, and other health care providers that treat Medi-Cal patients to at least cover the costs of providing care and by bringing down the cost of prescription drugs. (k) California is one of several states that levy taxes on managed care plans to obtain extra federal dollars to help pay for health care access. This chapter addresses many of the current flaws in Medi-Cal funding. First, it ensures the existing tax is continued permanently so that California obtains its fair share of federal health care funding. Second, it guarantees that all of the revenue from the continued tax will be spent on investments to improve access to critical health care services and makes it impossible to divert these dollars to unrelated uses. (l) In addition, this chapter helps make essential medications affordable and accessible to more patients by increasing funding for the state to produce and distribute generic prescription drugs. By expanding California's capacity to produce its own generic prescription drugs, this chapter will inject competition into the prescription drug market and help address critical drug shortages. This will reduce prescription drug prices for all Californians. (m) By ensuring permanent funding for increased Medi-Cal provider payments, generic prescription drug programs, and increasing our health care workforce, bed capacity, and treatment options, and protecting these dollars from unauthorized uses, this chapter will improve our overall health care system by providing all patients with greater access to quality health care and affordable drugs. 14199.102. Statement of Purpose In enacting this chapter, the purpose and intent of the people of the State of California is to do all of the following: (a) Increase access to quality health care by establishing a permanent, dedicated funding stream to be used for increasing reimbursement rates and other supports to health care providers that treat Medi-Cal patients and investments in building an adequate health care workforce, bed capacity, and treatment options. (b) Increase access to affordable prescription drugs by establishing a permanent, dedicated funding stream to be used to produce and distribute generic prescription drugs through the California Affordable Drug Manufacturing Act of 2020. (c) Prevent the revenue stream permanently continued by this chapter from ever being used to fund unauthorized or unrelated programs or from being used to supplant or replace existing sources of moneys that currently fund health care access and affordable prescription drug programs in this state. (d) Continue a dedicated funding stream that is fully permitted by federal law, while also ensuring that taxpayers and employers do not bear the financial burden for the implementation of this chapter. Article 2. Protect Access to Health Care Fund 14199.103. Creation of the Protect Access to Health Care Fund (a) (1) The Protect Access to Health Care Fund (fund) is hereby established in the State Treasury. (2) Notwithstanding any other law: (A) The fund is a special fund, permanently separate and apart from the General Fund or any other state fund or account. (B) Notwithstanding Section 16305.7 of the Government Code, any interest or dividends earned on moneys in the fund shall be retained in the fund and used solely as set forth in this chapter. (b) The Health Care Oversight & Accountability Sub Fund is hereby established in the fund. (c) The Improving Access to Health Care Sub Fund is hereby established in the fund. (d) Notwithstanding any other law: (1) (A) Effective January 1, 2027, any remaining moneys in the Managed Care Enrollment Fund created pursuant to Section 14199.82 that are not necessary to fund liabilities or encumbrances to support the subcomponents of the Medi-Cal program set forth in subdivision (d) of Section 14199.82 for expenditures associated with the 2023, 2024, 2025, and 2026 payments shall be transferred to the Medi-Cal Access and Support Account. (B) Effective on the date on which all remaining encumbered moneys in the Managed Care Enrollment Fund have been exhausted, the Managed Care Enrollment Fund is hereby abolished, and Section 14199.82 shall become inoperative, and is hereby repealed one year after becoming inoperative. (2) (A) Effective January 1, 2027, any remaining moneys in the Medi-Cal Provider Payment Reserve Fund created pursuant to Section 14105.200 that are not necessary to fund liabilities or encumbrances for the purposes set forth in Section 14105.200 for expenditures associated with the 2023, 2024, 2025, and 2026 calendar years shall be transferred to the Medi-Cal Access and Support Account. (B) Effective on the date on which all remaining encumbered moneys in the Medi-Cal Provider Payment Reserve Fund have been exhausted, the Medi-Cal Provider Payment Reserve Fund is hereby abolished, and Section 14105.200 shall become inoperative, and is hereby repealed one year after becoming inoperative. 14199.104. Fund Oversight and Accountability (a) The people of the State of California hereby declare their unqualified intent for the moneys deposited into the fund to be used to support the purposes set forth in this chapter without delay or interruption. The purpose of this section is to provide oversight and accountability mechanisms to guarantee that the people's intent is carried out. (b) (1) Every four years, the Controller shall conduct an independent financial audit of the programs receiving moneys from the fund. The Controller shall report the findings to the Governor and both houses of the Legislature, and shall make the findings available to the public on its internet website. (2) The Controller's audit shall also assess the department's annual compliance with Section 14199.107. (c) (1) The Controller shall be separately reimbursed from moneys in the Health Care Oversight & Accountability Sub Fund for actual costs incurred in conducting the financial audit required by subdivision (b) of this section and the reviews required by subdivision (b) of Section 14199.107 in an amount not to exceed seven hundred fifty thousand dollars ($750,000) per audit and review. (2) The seven hundred fifty thousand dollars ($750,000) per audit and review maximum limit shall be adjusted decennially to reflect any increase in inflation as measured by the Consumer Price Index for All Urban Consumers (CPI-U). The Treasurer's office shall calculate and publish the adjustments required by this paragraph. 14199.105. Treatment of Moneys Deposited in and Expended from the Fund Notwithstanding any other law: (a) The fund, and every sub fund, account, and subaccount within the fund, is hereby declared to be a trust fund, trust sub fund, trust account, or trust subaccount. (b) Except as provided in Sections 16310 and 16381 of the Government Code as those sections read on January 1, 2023, moneys in the fund shall not be borrowed, loaned, or otherwise transferred to the General Fund or any other state or local fund or account. Moneys deposited into the fund, and any sub fund, account, or subaccount within the fund, including any interest or dividends earned thereon, shall only be used for the specific purposes set forth in this chapter. Action shall not be taken that permanently or temporarily changes the status of the fund or any subfund, account, or subaccount within the fund as a trust fund, trust subfund, trust account, or trust subaccount, or borrows, diverts, or appropriates the moneys in the fund in a manner inconsistent with this chapter. (c) (1) The taxes imposed by Article 7.1 (commencing with Section 14199.80) of Chapter 7 during calendar years 2025 and 2026, and Article 6 (commencing with Section 14199.123) and the moneys derived therefrom, including interest and penalties but less payment of refunds, are required to be deposited into the fund as set forth in Article 3 (commencing with Section 14199.108). The fund is a special fund and trust fund permanently and irrevocably separate and apart from the General Fund. Notwithstanding Section 13340 of the Government Code, moneys in the fund are continuously appropriated to the department without regard to fiscal year for the purposes set forth in this chapter. (2) (A) Therefore, the taxes and the moneys resulting therefrom described in paragraph (1) shall not be considered to be part of the General Fund, as that term is used in Chapter 1 (commencing with Section 16300) of Part 2 of Division 4 of Title 2 of the Government Code, shall not be considered General Fund revenues for purposes of Section 8 of Article XVI of the California Constitution and its implementing statutes, and shall not be considered "General Fund revenues," "state revenues," "moneys," or "General Fund proceeds of taxes" for purposes of subdivisions (a) and (b) of Section 8 of Article XVI of the California Constitution and its implementing statutes. (B) This paragraph does not change the character of the taxes and the moneys resulting therefrom described in paragraph (1) as "state revenues" or "state tax revenues" for purposes of Title XIX and Title XXI of the Federal Social Security Act. (a) (1) The department shall be annually reimbursed from moneys in the Health Care Oversight & Accountability Subfund for actual and necessary costs incurred in administering this chapter in an amount not to exceed 0.0005 percent of the moneys annually deposited into the fund or four million dollars ($4,000,000), whichever is greater. Any interagency agreements entered into by the department for administration of this chapter shall be covered by the amount provided in this subdivision. (2) The limit in paragraph (1) shall be adjusted decennially to reflect any increase in inflation as measured by the Consumer Price Index for All Urban Consumers (CPI-U). The Treasurer's office shall calculate and publish the adjustments required by this paragraph. (b) (1) (A) On and after January 1, 2027, the department has a nondiscretionary ministerial duty to use all of the moneys in the fund, and each subfund, account, and subaccount within the fund, to accomplish the purposes of this chapter on an annual basis. Therefore, on and after January 1, 2027, the department shall make every reasonable effort to exhaust or otherwise encumber all of the moneys in the fund by the end of each calendar year or fiscal year. (B) The department may choose to comply with this requirement on a calendar year or fiscal year basis and may account for such expenditures on an accrual or cash basis. The department shall publish its choices under this subparagraph on its internet website. (C) For purposes of this paragraph, unexhausted moneys in the fund that are allocated for expenditures associated with payments to Medi-Cal providers pursuant to a federally approved methodology, or a methodology for which federal approval is pending, shall be considered otherwise encumbered at the end of each applicable calendar year or fiscal year. (2) In any challenge alleging that the department is violating this non discretionary ministerial duty, the court shall apply its independent judgment and deference shall not be accorded to the department. (c) (1) If, in any challenge brought to remedy a violation of this chapter, a restraining order or preliminary injunction is issued, the plaintiffs or petitioners shall not be required to post a bond obligating the plaintiffs or petitioners to indemnify the government defendants or the State of California for any damage the restraining order or preliminary injunction may cause. (2) (A) If any challenge to invalidate an action that violates this chapter is successful by way of a final judgment issued by a court of competent jurisdiction, then an amount of moneys necessary to restore the fund, subfund, account, or subaccount from which the moneys were unlawfully taken or diverted to its financial status had the unlawful action not been taken shall be transferred from the General Fund to the fund, subfund, account, or subaccount, as applicable, upon appropriation by the Legislature. Interest calculated at the Pooled Money Investment Fund rate from the date or dates the moneys were unlawfully taken or diverted shall accrue to the amounts required to be transferred pursuant to this paragraph. Within 30 calendar days of the appropriation made by the Legislature, the Controller shall make the transfer required by this paragraph and issue a notice to the parties, the department, and the committee that the transfer has been completed. (B) If the Legislature fails to appropriate sufficient moneys to satisfy a final judgment described in subparagraph (A) within 365 days of the issuance of that judgment, the court shall direct the Controller to use moneys in the Medi-Cal Access and Support Account to restore the moneys that were unlawfully taken or diverted, including interest. 14199.107. Nonsupplantation (a) (1) Except as otherwise specified in Article 4 (commencing with Section 14199.109), moneys in the fund shall not be used to replace or supplant state revenue sources already in existence before the effective date of this chapter. Moneys in the fund shall only be used to expand the health care benefits, health care services, health care workforce, and payment rates above and beyond those already in effect or in existence as of January 1, 2024. (2) In order to ensure compliance with paragraph (1) and achieve the purposes of this chapter, and except as otherwise specified in Article 4 (commencing with Section 14199.109), moneys in the fund shall be used only to increase and enhance, and not replace or supplant, each and every preexisting state revenue source for the services and programs that receive additional financial support pursuant to Article 3 (commencing with Section 14199.108) and Article 4 (commencing with Section 14199.109) of this chapter. (3) Except as otherwise specified in Article 4 (commencing with Section 14199.109), moneys in the fund shall not be used to supplant any preexisting state revenue source used to provide Medi-Cal services, benefits, or coverage, moneys used for the California Affordable Drug Manufacturing Act of 2020, or the health care workforce provisions set forth in this chapter. (b) (1) The department shall annually issue a public written report providing a detailed explanation of whether or not, and how, compliance with subdivision (a) is being achieved. The report shall be posted on the department's internet website. (2) As part of its audit responsibilities under Section 14199.104, the Controller shall independently review the reports prepared by the department pursuant to paragraph (1) and publicly issue a separate written opinion regarding whether or not compliance with subdivision (a) is being achieved. Costs incurred by the Controller attributable to this requirement shall be reimbursable pursuant to subdivision (c) of Section 14199.104. (c) In any challenge alleging that the moneys in the fund, and the subfunds, accounts, and subaccounts established within the fund, are being used to supplant preexisting state revenues already used for the purposes described in this chapter, the court shall apply its independent judgment and deference shall not be accorded to the department. (d) For purposes of this section, Sections 14199.84 and 14199.123 shall be deemed to be the same state revenue source. (e) Additional express references in this chapter to prohibitions on supplanting funding does not imply greater nonsupplantation protection for the accounts containing those references, or lesser nonsupplantation protection for accounts lacking those references. Article 3. Deposit and Allocation of Moneys in the Fund 14199.108. Deposit and Allocation of Moneys Notwithstanding any other law: (a) (1) On and after January 1, 2025, all moneys annually derived from the tax imposed pursuant to Article 7.1 (commencing with Section 14199.80) of Chapter 7 shall be deposited into the fund. (2) On and after January 1, 2027, all moneys annually derived from the tax imposed by Article 6 (commencing with Section 14199.123) shall be deposited into the fund. (b) (1) Sufficient moneys shall be annually transferred by the Controller from the fund to the Health Care Oversight & Accountability Subfund to cover all of the following: (A) For the 2025 and 2026 calendar years only, the amount of moneys necessary to cover the appropriations made pursuant to Section 14199.108.3. (B) Commencing with the 2025 calendar year and each calendar year thereafter, the nonfederal share of increased capitation payments to Medi-Cal managed care plans to account for their projected tax obligation pursuant to Section 14199.84 or Article 6 (commencing with Section 14199.123), for the subject calendar year or years, as applicable. (C) Reimbursement of the Controller for its responsibilities under this chapter. (D) Payment of the department's administrative costs. (E) Repayment of any refunds, as applicable. (F) Costs incurred pursuant to Section 14199.133. (2) Notwithstanding Section 13340 of the Government Code, all moneys within the Health Care Oversight & Accountability Subfund are hereby continuously appropriated, without regard to fiscal years, to the department to be used as set forth in this subdivision. (3) Any unencumbered moneys remaining in the Health Care Oversight & Accountability Subfund at the end of a calendar year shall be transferred to the Improving Access to Health Care Subfund. (c) For each applicable calendar year, after the transfers required by subdivision (b) to the Health Care Oversight & Accountability Subfund, all remaining moneys in the fund shall be transferred to the Improving Access to Health Care Subfund. (d) In each calendar year, the first four billion three hundred million dollars ($4,300,000,000) transferred to the Improving Access to Health Care Subfund shall be deposited by the Controller in the following amounts in the following accounts that are hereby created within the Improving Access to Health Care Subfund: (1) Twenty-two percent in the Primary Care Account. (2) Twenty-two percent in the Specialty Care Account. (3) Two and one-half of 1 percent in the Emergency Department Physicians Account. (4) Five and three-quarters of 1 percent in the Outpatient and Clinic Access Account. (5) Five and one-half of 1 percent in the Family Planning Account. (6) One and one-quarter of 1 percent in the Reproductive Health Account. (7) Three percent in the Emergency Medical Transportation Account. (8) Eight and three-quarters of 1 percent in the Emergency Department and Hospital Services Account. (9) Three and one-half of 1 percent in the Designated Public Hospital Account, subject to subdivision (g). (10) Four and one-half of 1 percent in the Improving Mental Health Account, subject to subdivision (g). (11) Six and one-quarter of 1 percent in the Health Care Workers Account. (12) Three and one-half of 1 percent in the Clinic Quality Account. (13) Three and one-half of 1 percent in the Improved Dental Services Account. (14) Eight percent to the Medi-Cal Access and Support Account. (e) Commencing January 1, 2027, and notwithstanding Section 13340 of the Government Code, all moneys within the accounts described in subdivision (d), and any subaccounts therein, are hereby continuously appropriated, without regard to fiscal years, to the department to be used as set forth in Article 4 (commencing with Section 14199.109). (f) (1) On and after January 1, 2030, the maximum allowable balance of unencumbered moneys in any of the accounts described in paragraphs (1) to (8), inclusive, and (11) to (13), inclusive, of subdivision (d) shall be 200 percent of the average annual amount deposited therein during the immediately preceding two calendar years. This shall be known as the "maximum allowable balance." (2) As long as an account described in paragraphs (1) to (8), inclusive, and (11) to (13), inclusive, of subdivision (d) is at or above its maximum allowable balance, moneys otherwise required to be deposited into that account shall instead be deposited on a pro rata basis into the other accounts described in paragraphs (1) to (8), inclusive, and (11) to (13), inclusive, of subdivision (d) that are not at or above their maximum allowable balance. (3) This subdivision does not apply if an account reaches its maximum allowable balance as a result of the department violating its nondiscretionary ministerial duty set forth in subdivision (b) of Section 14199.106. (4) This subdivision does not apply if all of the accounts described in paragraphs (1) to (8), inclusive, and (11) to (13), inclusive, of subdivision (d) are all simultaneously at or above their maximum allowable balance. (g) (1) Notwithstanding the percentage allocation described in paragraph (9) of subdivision (d), the maximum dollar amount deposited into the Designated Public Hospital Account shall not exceed one hundred fifty million dollars ($150,000,000) per calendar year. Once the amount deposited in any calendar year into the Designated Public Hospital Account reaches one hundred fifty million dollars ($150,000,000), any excess moneys allocated pursuant to paragraph (9) of subdivision (d) shall instead be deposited into the Emergency Department and Hospital Services Account. (2) Notwithstanding the percentage allocation described in paragraph (10) of subdivision (d), the maximum dollar amount deposited into the Improving Mental Health Account shall not exceed two hundred million dollars ($200,000,000) per calendar year. Once the amount deposited in any calendar year into the Improving Mental Health Account reaches two hundred million dollars ($200,000,000), any excess moneys allocated pursuant to paragraph (10) of subdivision (d) shall instead be deposited into the Emergency Department and Hospital Services Account. (h) After four billion three hundred million dollars ($4,300,000,000) is first deposited pursuant to subdivision (d), in each calendar year the next four hundred million dollars ($400,000,000) transferred to the Improving Access to Health Care Subfund shall be deposited into the Medi-Cal Access and Support Account. (i) (1) After four billion three hundred million dollars ($4,300,000,000) is first deposited pursuant to subdivision (d) and the next four hundred million dollars ($400,000,000) is deposited pursuant to subdivision (h), in each calendar year the next two hundred twentysix million dollars ($226,000,000) transferred to the Improving Access to Health Care Subfund shall be deposited as follows: (A) Thirty-two million dollars ($32,000,000) into the Community Health Workers Account. (B) Sixty-four million dollars ($64,000,000) into the Health Care Workforce Loan Repayment Account. (C) One hundred twenty million dollars ($120,000,000) into the Medi-Cal Workforce Subaccount. (D) Ten million dollars ($10,000,000) into the Affordable Prescription Drugs Account. (2) Commencing January 1, 2027, and notwithstanding Section 13340 of the Government Code, all moneys within the accounts described in paragraph (1), and any subaccounts therein, are hereby continuously appropriated, without regard to fiscal years, to the department to be used as set forth in Article 4 (commencing with Section 14199.109). (j) After the deposits required by subdivisions (d), (h), and (i) are completed, all remaining moneys transferred to the Improving Access to Health Care Subfund in a calendar year shall be deposited and used as follows: (A) Twenty-five percent to the accounts described in paragraphs (1) to (13), inclusive, of subdivision (d) on a pro rata basis according to and consistent with the relative distribution among those paragraphs. (B) Seventy-five percent to the Medi-Cal Access and Support Account. 14199.108.3. Expenditures During Calendar Years 2025 and 2026 (a) During each of calendar year 2025 and calendar year 2026 only, and notwithstanding Section 13340 of the Government Code, moneys are hereby continuously appropriated without regard to fiscal years from the Health Care Oversight & Accountability Subfund to the department in the following amounts for the following purposes: (1) Two billion dollars ($2,000,000,000) to cover a portion of the nonfederal share of Medi-Cal managed care rates for health care services furnished to children, adults, seniors, and persons with disabilities, and persons dually eligible for the Medi-Cal and Medicare programs. (2) Six hundred ninety-one million dollars ($691,000,000) for primary care, including obstetrics and nonspecialty mental health services. (3) Five hundred seventy-five million dollars ($575,000,000) for specialty care. (4) Two hundred forty-five million dollars ($245,000,000) for community and outpatient procedures. (5) Ninety million dollars ($90,000,000) for abortion and family planning services. (6) Fifty million dollars ($50,000,000) for services and supports for primary care. (7) Three hundred fifty-five million dollars ($355,000,000) for emergency room facilities and physicians. (8) One hundred fifty million dollars ($150,000,000) for designated public hospitals. (9) Fifty million dollars ($50,000,000) for ground emergency medical transportation. (10) Three hundred million dollars ($300,000,000) for behavioral health facility throughputs. (11) Seventy-five million dollars ($75,000,000) for graduate medical education. (12) Seventy-five million dollars ($75,000,000) for Medi-Cal workforce. (b) The allocation of moneys appropriated pursuant to subdivision (a) shall be subject to the stakeholder input requirements of Section 14199.121. (c) This section shall become inoperative on January 1, 2027, and is hereby repealed on January 1, 2028. 14199.108.5. Treatment of Increased or Supplemental Payments Increased or supplemental payments made pursuant to Sections 14199.108.3, 14199.109, 14199.110, 14199.110.5, 14199.112, 14199.113, 14199.114, 14199.115, 14199.116, 14199.117, 14199.119, 14199.120.5, and 14199.120.6 shall: (a) Be in addition to existing reimbursement rates and any other payments made by a Medi-Cal managed care plan or the department and shall not supplant amounts that would otherwise be payable by a Medi-Cal managed care plan or the department to a recipient of moneys provided by Article 4 (commencing with Section 14199.109). (b) Be considered separate and apart from any other reimbursement, and shall not be considered during, or factored into, any annual reconciliation. Article 4. Protecting Access to Health Care 14199.109. Primary Care Account (a) Moneys in the Primary Care Account shall be used for the purpose of providing Medi-Cal patients with increased access to quality primary care services as set forth in this section. (b) (1) The department shall, subject to the stakeholder input requirements of Section 14199.121, increase reimbursement rates for primary care services above those in effect on January 1, 2024, and shall ensure that Medi-Cal managed care plans provide those increases in a manner consistent with the intent and purposes of this chapter. (2) In addition to paragraph (1), in implementing this section, the department may, subject to federal approval and after obtaining stakeholder input pursuant to Section 14199.121, utilize different payment mechanisms, including quality incentive payments or value-based payment models, to recruit, retain, and improve primary care provider participation in Medi-Cal and improve quality. 14199.110. Specialty Care Account (a) Moneys in the Specialty Care Account shall be used for the purpose of increasing Medi-Cal patient access to specialty care services as set forth in this section. (b) The department shall, subject to the stakeholder input requirements of Section 14199.121, establish and implement one or more payment methodologies that meet federal requirements and that require each Medi-Cal managed care plan or its subcontracted entities to expand beneficiary access to Medi-Cal covered specialty care services. The payment methodology or methodologies developed by the department shall address the following objectives: (1) Increase the number of Medi-Cal managed care plan-contracting specialists. (2) Retain existing Medi-Cal managed care plan contracting specialists within the plan's network of contracting providers. (3) Increase the number of Medi-Cal patients an existing Medi-Cal managed care plan-contracting specialist serves. (4) Provide expanded specialist appointment availability for Medi-Cal patients. (5) Support specialists in coordinating and overseeing the care of patients as part of a multidisciplinary care team. (c) A Medi-Cal managed care plan or a subcontracted entity shall provide payments to specialists consistent with the payment methodologies developed by the department pursuant to this section. 14199.110.5. Emergency Department Physicians Account (a) Moneys in the Emergency Department Physicians Account shall be used for the purpose of increasing reimbursements for emergency department physicians treating Medi-Cal patients as set forth in this section. (b) The department shall, subject to the stakeholder input requirements of Section 14199.121, establish and implement one or more payment methodologies to increase reimbursements for emergency department physicians treating Medi-Cal patients. The payment methodology or methodologies shall be consistent with the purposes of this chapter, shall be designed to improve access and support for emergency department services, and shall not be conditioned on a physician's contracted network provider status. 14199.111. Community Health Workers Account (a) The Community Health Workers Account is hereby created within the Improving Access to Health Care Subfund. Moneys in the Community Health Workers Account shall be used for the purpose of increasing access to community health workers in Medi-Cal programs as set forth in this section. (b) The department shall, subject to the stakeholder input requirements of Section 14199.121, establish a grant program to expand the number of locations and populations served by community health workers providing services on behalf of community-based organizations, community providers, and clinics. (c) (1) On and after January 1, 2030, the maximum allowable balance of unencumbered moneys in this account shall be sixty-four million dollars ($64,000,000). As long as this account is at or above sixty-four million dollars ($64,000,000), moneys otherwise required to be deposited into this account shall instead be deposited on a pro rata basis into the accounts described in paragraphs (1) to (8), inclusive, and (11) to (13), inclusive, of subdivision (d) that are not at or above their maximum allowable balance. (2) This subdivision does not apply if this account is at or above sixty-four million dollars ($64,000,000) as a result of the department violating its nondiscretionary ministerial duty set forth in subdivision (b) of Section 14199.106, or if the accounts described in paragraphs (1) to (8), inclusive, and (11) to (13), inclusive, of subdivision (d) are all simultaneously at or above their maximum allowable balance. 14199.112. Outpatient and Clinic Access Account (a) Moneys in the Outpatient and Clinic Access Account shall be used for the purpose of increasing net reimbursements for outpatient facilities, including ambulatory surgical centers and clinics, that provide eligible outpatient services and procedures to Medi-Cal patients. (b) The department shall, subject to the stakeholder input requirements of Section 14199.121, develop, seek federal approval for, and implement one or more payment methodologies that provide increased net reimbursement for eligible outpatient facilities, regardless of licensure type, in a manner consistent with the purposes of this chapter. (c) Moneys in the Outpatient and Clinic Access Account shall be used only to increase net reimbursement levels for those eligible outpatient services and procedures above existing net reimbursement levels in effect for the eligible outpatient services and procedures as of January 1, 2024. 14199.113. Family Planning Account (a) Moneys in the Family Planning Account shall be used for the purpose of expanding the scope and availability of family planning services as set forth in this section. (b) The department shall, subject to the stakeholder input requirements of Section 14199.121, use the moneys in the account for all of the following purposes: (1) Expanding the scope of benefits offered pursuant to the State-Only Family Planning Program and the Family PACT program. (2) Increasing reimbursement rates for: (A) Family planning services and family planning related services in the Medi-Cal program. (B) Comprehensive clinical family planning services in the Family PACT program. (C) Family planning services in the State-Only Family Planning Program. (3) Authorizing the department, subject to the stakeholder input requirements of Section 14199.121, to fund practice transformation activities and to establish alternative payment methodologies, including, but not limited to, bundled payments, directed payments to both network and non network providers, capitated payments, and value-based payments for family planning, family planning-related services, and sexual and reproductive health services. (4) Providing grant funding to qualified family planning providers to offset the costs of providing uncompensated outpatient services and supports. 14199.114. Reproductive Health Account (a) Moneys in the Reproductive Health Account shall be used as set forth in this section. (b) The department shall, subject to the stakeholder input requirements of Section 14199.121, use the moneys in the Reproductive Health Account for the purpose of protecting, preserving, and expanding access to abortion and abortion-related services, including to increase payment rates for abortion and abortion-related services. 14199.115. Emergency Medical Transportation Account (a) Moneys in the Emergency Medical Transportation Account shall be used for the purpose of increased payments to private ground emergency medical transport providers and emergency air ambulance transport providers as set forth in this section. (b) Eighty percent of the moneys in the account shall be deposited into the Ground Emergency Medical Transportation Subaccount, which is hereby created in the Emergency Medical Transportation Account. Moneys in this subaccount shall be used for the purpose of increased payments to private ground emergency medical transport providers as follows: (1) The department shall, subject to the stakeholder input requirements of Section 14199.121, establish and implement increased net reimbursement to private ground emergency medical transport providers for ground emergency medical transports above the rates in effect as of January 1, 2024. To the extent permitted by federal law, the department shall increase net reimbursement based on the regional cost of living where the transport was rendered. (2) The increased Medi-Cal payments described in paragraph (1) shall be applicable to fee-for-service rates to private ground emergency medical transport providers and payments from Medi-Cal managed care plans to private ground emergency medical transport providers. The department shall structure the increased Medi-Cal managed care payments pursuant to this subdivision so that private ground emergency medical transport providers that receive payments for ground emergency medical transports rendered to managed care patients pursuant to Section 14129.3 or any successor statute are eligible to receive payments for ground emergency medical transports rendered to Medi-Cal managed care patients pursuant to this section. (3) Moneys in the Ground Emergency Medical Transportation Subaccount shall be used only to increase net reimbursement levels for private ground emergency medical transport providers above existing net reimbursement levels in effect for private ground emergency medical transport providers as of January 1, 2024. The director may modify or make adjustments to any methodology, fee amount, or other provision specified in Article 3.91 (commencing with Section 14129) of Chapter 7, as authorized by subdivision (b) of Section 14129.6, only to the extent necessary to meet the requirements of federal law or regulations or to obtain federal approval pursuant to Section 14129.6 after the implementation of this subdivision. (c) Twenty percent of the moneys in the account shall be deposited into the Air Ambulance Emergency Medical Transportation Subaccount, which is hereby created in the Emergency Medical Transportation Account. Moneys in this subaccount shall be used for the purpose of increased Medi-Cal payments for emergency air ambulance transport providers as follows: (1) The department shall, subject to the stakeholder input requirements of Section 14199.121, establish and implement increased Medi-Cal payments for air emergency ambulance transport providers above the rates in effect as of January 1, 2024. (2) The increased rates described in paragraph (1) shall be applicable to Medi-Cal fee-for-service payment rates to emergency air ambulance transport providers and payments from Medi-Cal managed care plans to emergency air ambulance transport providers. (3) Payments made pursuant to this subdivision shall be in addition to any other Medi-Cal payments to emergency air ambulance transport providers and shall not supplant amounts that would otherwise be payable under Medi-Cal to an emergency air ambulance transport provider. 14199.116. Emergency Department and Hospital Services Account (a) Moneys in the Emergency Department and Hospital Services Account shall be used for the purpose of protecting access to, and improving the quality of, hospital care, including access to inpatient acute care and emergency departments, for Medi-Cal patients, as set forth in this section. (b) The department shall, subject to the stakeholder input requirements of Section 14199.121, develop, seek federal approval for, and implement one or more payment methodologies that provide increased net reimbursement to public and private hospitals for eligible hospital services. The department may adjust payments with moneys in the account. (c) Moneys in the Emergency Department and Hospital Services Account shall be used only to increase net reimbursement levels for those eligible hospital services above existing net reimbursement levels in effect for the eligible hospital services as of January 1, 2024. 14199.117. Designated Public Hospital Account (a) Moneys in the Designated Public Hospital Account shall be used for the purpose of sustaining and promoting access to hospital and nonhospital care at designated public hospital systems. (b) The department shall, subject to the stakeholder input requirements of Section 14199.121, use the moneys in the account to provide increased net reimbursement or new payments for designated public hospitals and health systems, including, but not limited to, quality incentive payments under existing or successor payment mechanisms or payments in support of services provided by designated hospital systems or that enhance their capabilities, or to provide financial support for the nonfederal share of the MediCal payments to the designated public hospital systems. The department may apply the moneys in the Designated Public Hospital Account for these purposes. (c) Moneys in the Designated Public Hospital Account shall be used only to increase net reimbursement levels for designated public hospital systems for the eligible services above existing net reimbursement levels for the eligible services in effect as of January 1, 2024. 14199.118. Affordable Prescription Drugs Account (a) The Affordable Prescription Drugs Account is hereby created within the Improving Access to Health Care Subfund. Moneys in the Affordable Prescription Drugs Account shall be used as set forth in this section. (b) The department shall, subject to the stakeholder input requirements of Section 14199.121, use the moneys in the Affordable Prescription Drugs Account for the purpose of providing increased funding for the California Affordable Drug Manufacturing Act of 2020 to increase competition, lower prices, and address shortages in the market for generic prescription drugs, to reduce the cost of prescription drugs for public and private purchasers, taxpayers, and consumers, and to increase patient access to affordable drugs. (c) (1) On and after January 1, 2030, the maximum allowable balance of unencumbered moneys in this account shall be twenty million dollars ($20,000,000). As long as this account is at or above twenty million dollars ($20,000,000), moneys otherwise required to be deposited in this account shall instead be deposited on a pro rata basis into the accounts described in paragraphs (1) to (8), inclusive, and (11) to (13), inclusive, of subdivision (d) that are not at or above their maximum allowable balance. (2) This subdivision does not apply if this account is at or above twenty million dollars ($20,000,000) as a result of the department violating its nondiscretionary ministerial duty set forth in subdivision (b) of Section 14199.106, or if the accounts described in paragraphs (1) to (8), inclusive, and (11) to (13), inclusive, of subdivision (d) are all simultaneously at or above their maximum allowable balance. 14199.119. Improving Mental Health Account (a) (1) Moneys in the Improving Mental Health Account shall be used for the purpose of expanding access to mental health programs and services as set forth in this section. (2) Moneys in the account shall be used to provide additional funding for inpatient psychiatric services pursuant to subdivision (b). (b) The department shall, subject to the stakeholder input requirements of Section 14199.121, use the moneys in the account for the purpose of increasing the supply of mental health inpatient psychiatric beds by providing a supplemental payment for psychiatric inpatient days in licensed acute care hospitals and acute psychiatric hospitals. These payments shall: (1) Increase the net reimbursement levels paid to these hospitals with respect to those services above the existing net reimbursement levels in effect for those services as of January 1, 2024. (2) Not affect or supplant any other payments to these hospitals. (3) Be made to these hospitals irrespective of contracting status with a county mental health plan or with a Medi-Cal managed care plan or other managed care entity that is financially responsible for psychiatric inpatient hospital services under contract with the department, as applicable. 14199.120. Health Care Workers Account (a) The department shall, subject to the stakeholder input requirements of Section 14199.121, use the moneys in the Health Care Workers Account for the purpose of attracting, retaining, and expanding the pool of health care workers available to treat Medi-Cal patients as set forth in this section. (b) Seventy-five percent of the moneys in the account shall be deposited in the Graduate Medical Education Subaccount, which is hereby created in the Health Care Workers Account. Moneys in this subaccount shall be transferred to the University of California for the administration and expenditure to other qualified entities to expand graduate medical education in order to achieve the goal of increasing the number of physician and surgeon residency slots and expanding the number of locations offering physician and surgeon residency programs, as compared to the number of residency slots and program locations in place on December 31, 2023. For the purposes of this section, all allopathic and osteopathic residency programs accredited by federally recognized accrediting organizations and located in California shall be eligible to apply to receive funding to support resident education in California. No later than January 1, 2027, the department may seek federal approval for the programs created or expanded pursuant to this subdivision. However, the graduate medical education programs are not contingent upon federal approval and federal financial participation. (c) Twenty-five percent of the moneys in the account shall be deposited in the Medi-Cal Workforce Subaccount, which is hereby created in the Health Care Workers Account. The department may enter into an interagency agreement with another state government agency or entity to administer and implement a grant program funded by the Medi-Cal Workforce Subaccount as set forth in this subdivision. (1) (A) No sooner than January 1, 2027, the department or its designated state government agency or entity shall issue grants pursuant to this subdivision with available moneys in the Medi-Cal Workforce.