BILL NUMBER: AB 959 CHAPTERED 08/28/06 CHAPTER 162 FILED WITH SECRETARY OF STATE AUGUST 28, 2006 APPROVED BY GOVERNOR AUGUST 28, 2006 PASSED THE ASSEMBLY AUGUST 7, 2006 PASSED THE SENATE JUNE 29, 2006 AMENDED IN SENATE JUNE 8, 2006 AMENDED IN SENATE FEBRUARY 27, 2006 AMENDED IN ASSEMBLY JANUARY 11, 2006 AMENDED IN ASSEMBLY JANUARY 4, 2006 INTRODUCED BY Assembly Member Frommer FEBRUARY 18, 2005 An act to amend Section 14105.27 of, and to add Section 14105.965 to, the Welfare and Institutions Code, relating to Medi-Cal, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 959, Frommer Medi-Cal: health facilities: reimbursement. Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Services and under which qualified low-income persons receive health care benefits. Existing law provides that a health facility is eligible to receive supplemental reimbursement under the Medi-Cal program if the facility provides services to Medi-Cal beneficiaries, is a distinct part of an acute care hospital providing skilled nursing services, and is owned by any of certain local entities. This bill would, in addition, allow for the payment of supplemental reimbursement to a facility described above that is owned by the state. The bill would, for the department's rate year beginning August 1, 2006, and for subsequent rate years, expand this supplemental reimbursement provision to apply to a state veterans' home. Existing law provides for the payment of supplemental reimbursement to acute care hospitals owned by certain local entities, or by the University of California, that provide outpatient services to Medi-Cal beneficiaries. This bill would, in addition, commencing with the 2006-07 fiscal year, allow for the payment of supplemental reimbursement to publicly owned or operated health clinics that are enrolled as Medi-Cal providers. The bill would require an eligible facility under these provisions, as a condition of receiving supplemental reimbursement, to enter into, and maintain, an agreement with the department for the purposes of implementing these provisions and reimbursing the department for the costs of administering them. This bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 14105.27 of the Welfare and Institutions Code is amended to read: 14105.27. (a) Each eligible facility, as described in subdivision (b) may, in addition to the rate of payment that the facility would otherwise receive for skilled nursing services, receive supplemental Medi-Cal reimbursement to the extent provided in this section. (b) A facility shall be eligible for supplemental reimbursement only if the facility has all of the following characteristics continuously during the department's rate year: (1) Provides services to Medi-Cal beneficiaries. (2) Is either of the following: (A) For the department's rate year beginning August 1, 2001, and for subsequent rate years, a distinct part of an acute care hospital providing skilled nursing services. For purposes of this section, "acute care hospital" means a facility described by subdivision (a) or (b), or both, of Section 1250 of the Health and Safety Code. (B) For the department's rate year beginning August 1, 2006, and for subsequent rate years, a state home, as defined in Section 101 (19) of Title 38 of the United States Code. (3) Is owned or operated by the state, or by a county, city, city and county, or health care district organized pursuant to Chapter 1 (commencing with Section 32000) of Division 23 of the Health and Safety Code. (c) An eligible facility's supplemental reimbursement pursuant to this section shall be calculated and paid as follows: (1) The supplemental reimbursement to an eligible facility, as described in paragraph (4), shall be equal to the amount of federal financial participation received as a result of the claims submitted pursuant to paragraph (2) of subdivision (g). (2) In no instance shall the amount certified pursuant to paragraph (1) of subdivision (e), when combined with the amount received from all other sources of reimbursement from the Medi-Cal program, exceed 100 percent of projected costs, as determined pursuant to the Medi-Cal State Plan, for distinct part skilled nursing services at each facility. (3) Costs associated with the provision of subacute services pursuant to Section 14132.25 shall not be certified for supplemental reimbursement pursuant to this section. (4) The supplemental Medi-Cal reimbursement provided by this section shall be distributed under a payment methodology based on skilled nursing services provided to Medi-Cal patients at the eligible facility, either on a per diem basis, a per discharge basis, or any other federally permissible basis. The department shall seek approval from the federal Centers for Medicare and Medicaid Services for the payment methodology to be utilized, and shall not make any payment pursuant to this section prior to obtaining that approval. (d) (1) It is the Legislature's intent in enacting this section to provide the supplemental reimbursement described in this section without any expenditure from the General Fund. An eligible facility, as a condition of receiving supplemental reimbursement pursuant to this section, shall enter into, and maintain, an agreement with the department for the purposes of implementing this section and reimbursing the department for the costs of administering this section. (2) The state share of the supplemental reimbursement submitted to the federal Centers for Medicare and Medicaid Services for purposes of claiming federal financial participation shall be paid only with funds from the governmental entities described in paragraph (3) of subdivision (b) and certified to the state as provided in subdivision (e). (e) The particular governmental entity, described in paragraph (3) of subdivision (b), on behalf of any eligible facility shall do all of the following: (1) Certify, in conformity with the requirements of Section 433.51 of Title 42 of the Code of Federal Regulations, that the claimed expenditures for distinct part nursing facility services are eligible for federal financial participation. (2) Provide evidence supporting the certification as specified by the department. (3) Submit data as specified by the department to determine the appropriate amounts to claim as expenditures qualifying for federal financial participation. (4) Keep, maintain, and have readily retrievable, any records specified by the department to fully disclose reimbursement amounts to which the eligible facility is entitled, and any other records required by the federal Centers for Medicare and Medicaid Services. (f) The department may require that any governmental entity, described in paragraph (3) of subdivision (b), seeking supplemental reimbursement under this section enter into an interagency agreement with the department for the purpose of implementing this section. (g) (1) The department shall promptly seek any necessary federal approvals, including a federal medicaid waiver, for the implementation of this section. If necessary to obtain federal approval, the department may limit the program to those costs that are allowable expenditures under Title XIX of the federal Social Security Act (Subchapter 19 (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code). If federal approval is not obtained for implementation of this section, this section shall become inoperative. (2) The department shall submit claims for federal financial participation for the expenditures for the services described in subdivision (e) that are allowable expenditures under federal law. (3) The department shall, on an annual basis, submit any necessary materials to the federal government to provide assurances that claims for federal financial participation will include only those expenditures that are allowable under federal law. (h) In the event there is a final judicial determination by any court of appellate jurisdiction or a final determination by the administrator of the federal Centers for Medicare and Medicaid Services that the supplemental reimbursement provided in this section must be made to any facility not described in this section, this section shall become immediately inoperative. (i) All funds expended pursuant to this section are subject to review and audit by the department. SEC. 2. Section 14105.965 is added to the Welfare and Institutions Code, to read: 14105.965. (a) Each eligible facility, as described in subdivision (b), may, in addition to the rate of payment that the facility would otherwise receive for Medi-Cal outpatient services, receive supplemental Medi-Cal reimbursement to the extent provided in this section. (b) A facility shall be eligible for supplemental reimbursement only if the facility has all of the following characteristics continuously during a state fiscal year: (1) Provides services to Medi-Cal beneficiaries. (2) Commencing with the 2006-07 fiscal year, is a clinic that is enrolled as a Medi-Cal provider. (3) Is owned or operated by the state, a city, county, or city and county, the University of California, or a health care district organized pursuant to Division 23 (commencing with Section 32000) of the Health and Safety Code. (c) An eligible facility's supplemental reimbursement pursuant to this section shall be calculated and paid as follows: (1) The supplemental reimbursement to an eligible facility, as described in subdivision (b), shall be equal to the amount of federal financial participation received as a result of the claims submitted pursuant to paragraph (2) of subdivision (g). (2) In no instance shall the amount certified pursuant to paragraph (1) of subdivision (e), when combined with the amount received from all other sources of reimbursement from the Medi-Cal program, exceed 100 percent of projected costs, as determined pursuant to the Medi-Cal state plan, for outpatient services at each facility. (3) The supplemental Medi-Cal reimbursement provided by this section shall be distributed under a payment methodology based on outpatient services provided to Medi-Cal patients at the eligible facility, either on a per-visit basis, per-procedure basis, or any other federally permissible basis. The department shall seek approval from the federal Centers for Medicare and Medicaid Services for the payment methodology to be utilized, and may not make any payment pursuant to this section prior to obtaining that approval. (d) (1) It is the Legislature's intent in enacting this section to provide the supplemental reimbursement described in this section without any expenditure from the General Fund. An eligible facility, as a condition of receiving supplemental reimbursement pursuant to this section, shall enter into, and maintain, an agreement with the department for the purposes of implementing this section and reimbursing the department for the costs of administering this section. (2) The state share of the supplemental reimbursement submitted to the federal Centers for Medicare and Medicaid Services for purposes of claiming federal financial participation shall be paid only with funds from the governmental entities described in paragraph (3) of subdivision (b) and certified to the state as provided in subdivision (e). (e) A particular governmental entity, described in paragraph (3) of subdivision (b), on behalf of any eligible facility owned or operated by the entity, shall do all of the following: (1) Certify, in conformity with the requirements of Section 433.51 of Title 42 of the Code of Federal Regulations, that the claimed expenditures for the outpatient services are eligible for federal financial participation. (2) Provide evidence supporting the certification as specified by the department. (3) Submit data as specified by the department to determine the appropriate amounts to claim as expenditures qualifying for federal financial participation. (4) Keep, maintain, and have readily retrievable, any records specified by the department to fully disclose reimbursement amounts to which the eligible facility is entitled, and any other records required by the federal Centers for Medicare and Medicaid Services. (f) The department may require that any governmental entity described in paragraph (3) of subdivision (b) seeking supplemental reimbursement for an eligible facility under this section enter into an interagency agreement with the department for the purpose of implementing this section. (g) (1) The department shall promptly seek any necessary federal approvals for the implementation of this section. If necessary to obtain federal approval, the department may limit the program to those costs that are allowable expenditures under Title XIX of the federal Social Security Act (Subchapter 19 (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code). If federal approval is not obtained for implementation of this section, this section shall not be implemented. (2) The department shall submit claims for federal financial participation for the expenditures for the services described in subdivision (e) that are allowable expenditures under federal law. (3) The department shall, on an annual basis, submit any necessary materials to the federal government to provide assurances that claims for federal financial participation will include only those expenditures that are allowable under federal law. (h) This section shall become inoperative in the event, and on the date, of a final judicial determination by any court of appellate jurisdiction or a final determination by the administrator of the federal Centers for Medicare and Medicaid Services that the supplemental reimbursement provided in this section must be made to any facility not described in this section. SEC. 3. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to ensure the financial solvency of certain public health facilities by enabling them to use the funds made available pursuant to this act at the earliest possible time, it is necessary that this act take effect immediately.