BILL NUMBER: AB 342	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Bass
   (Coauthor: Senator Steinberg)

                        FEBRUARY 18, 2009

   An act to amend Section 14166 of the Welfare and Institutions
Code, relating to Medi-Cal.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 342, as introduced, Bass. Medi-Cal: hospital demonstration
project.
   Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services and
under which qualified low-income persons receive health care
benefits. The Medi-Cal program is, in part, governed and funded by
federal Medicaid provisions.
   Existing law establishes the Medi-Cal Hospital/Uninsured Care
Demonstration Project Act, which revises hospital reimbursement
methodologies under the Medi-Cal program in order to maximize the use
of federal funds consistent with federal Medicaid law and stabilize
the distribution of funding for hospitals that provide care to
Medi-Cal beneficiaries and uninsured patients.  Under existing law,
the Legislature makes various findings and declarations with respect
to the above provisions.
   This bill would delete those findings and declarations.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 14166 of the Welfare and Institutions Code is
amended to read:
   14166.   (a)    This article
shall be known and may be cited as the "Medi-Cal Hospital/Uninsured
Care Demonstration Project Act." 
   (b) The Legislature finds and declares all of the following:
 
   (1) The preservation of the state's disproportionate share
hospitals and the University of California hospitals is of critical
importance to the health and welfare of the people of the state.
 
   (2) These hospitals, as well as many nondisproportionate district
hospitals, are facing unprecedented financial challenges. Many are
facing significant budget deficits impeding their ability to continue
serving their essential role in the health care delivery system,
including providing care to Medi-Cal beneficiaries and uninsured
patients.  
   (3) The financial viability of these hospitals has been sustained
through funding that has been available for California's
disproportionate share hospital program under Medi-Cal. Without these
funds, many of these hospitals would be unable to keep their doors
open and others would be forced to curtail services, thereby
impacting service to Medi-Cal beneficiaries and other needy
individuals.  
   (4) The federal Centers for Medicare and Medicaid Services has
indicated in negotiations with the State Department of Health
Services that it is changing its approach to federal funding of
Medicaid in various respects. For instance, the methodology that many
states, including California, have used to fund their
disproportionate share hospital programs successfully for more than a
decade has become the subject of negative attention by the federal
Centers for Medicare and Medicaid Services, which is refusing to
approve discretionary waivers and state plan amendments that rely on
these funding methods. Accordingly, the State of California has
proposed that the funding mechanism for inpatient hospital services
under Medi-Cal be modified to secure federal approval and address
continued and adequate funding to the University of California and
disproportionate share hospitals. To this end, the state has
negotiated a waiver from various federal Medicaid requirements that
will allow it to implement a demonstration project using modified
funding methodologies. The Medi-Cal Hospital/Uninsured Care
Demonstration Project is intended to make up to $3.3 billion in
additional federal funds available to California safety net hospitals
over a five-year period.  
   (5) The methodologies used to fund the Medi-Cal program should
maximize the use of federal funds consistent with federal Medicaid
law in an effort to access all of the increased federal funding
available under the Medi-Cal Hospital/Uninsured Care Demonstration
Project.  
   (6) The amount of Medi-Cal funding to the University of California
hospitals and disproportionate share hospitals as a whole should not
be less than the amount of funding for the 2004-05 fiscal year.
Similarly, the amount of Medi-Cal funding for the public
disproportionate share hospitals as a group and for the private
disproportionate share hospitals as a group should not be less than
the amount of funding for the 2004-05 fiscal year.  

   (7) The distributions of Medi-Cal funds should provide a
predictable and stable amount of funding for these hospitals in order
to allow them to engage in short-term and long-term planning. The
distribution methodologies should be fair and equitable, and take
into account utilization changes among hospitals.  
   (8) The payments of Medi-Cal funds to these hospitals should be
made regularly and periodically throughout the year in order to
provide hospitals with necessary cashflow.