(a) There is hereby created in the state treasury the medical assistance fee fund. The commissioner of insurance shall remit to the state treasurer, in accordance with the provisions of Kan. Stat. Ann. § 75-4215, and amendments thereto, all moneys collected or received by the commissioner from health maintenance organizations and medicare provider organizations for the fees specified in Kan. Stat. Ann. § 40-3213, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the medical assistance fee fund.

(b) (1) Moneys in the medical assistance fee fund shall be expended subject to the following priorities:

(A) First, to restore any reductions initiated during calendar year 2016 to provider reimbursement rates for state medicaid services;

(B) second, on July 1, 2017, or as soon thereafter as moneys are available, the director of accounts and reports shall transfer the amount of $3,500,000 to the community mental health center improvement fund created by Kan. Stat. Ann. § 39-2018, and amendments thereto, and on July 1 of each year thereafter, or as soon after each such date as moneys are available, the director of accounts and reports shall transfer the amount of $5,000,000 to the community mental health center improvement fund established by Kan. Stat. Ann. § 39-2018, and amendments thereto;

(C) third, to transfer moneys to the Kansas newborn screening fund pursuant to Kan. Stat. Ann. § 65-180, and amendments thereto; and

(D) fourth, if any moneys remain, for the purpose of medicaid medical assistance payments.

(2) All expenditures from the medical assistance fee fund shall be made in accordance with appropriation acts upon warrants of the director of accounts and reports issued pursuant to vouchers approved by the secretary of health and environment or the secretary’s designee.

(c) On or before the 10th day of each month, the director of accounts and reports shall transfer from the state general fund to the medical assistance fee fund interest earnings based on:

(1) The average daily balance of moneys in the medical assistance fee fund for the preceding month; and

(2) the net earnings rate of the pooled money investment portfolio for the preceding month.

(d) The medical assistance fee fund shall be used for the purposes set forth in this act and for no other governmental purposes. It is the intent of the legislature that the fund shall remain intact and inviolate for the purposes set forth in this act, and moneys in the fund shall not be subject to the provisions of Kan. Stat. Ann. §§ 75-3722, 75-3725a and 75-3726a, and amendments thereto.

(e) The secretary of health and environment shall prepare and deliver to the legislature on or before the first day of each regular legislative session a report that summarizes all expenditures from the medical assistance fee fund, fund revenues and recommendations regarding the adequacy of the fund to support necessary medical assistance programs.