BILL NUMBER: AB 1383 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 11, 2009
AMENDED IN ASSEMBLY JUNE 1, 2009
AMENDED IN ASSEMBLY MAY 14, 2009
AMENDED IN ASSEMBLY APRIL 30, 2009
INTRODUCED BY Assembly Member Jones
(Coauthor: Assembly Member De Leon)
FEBRUARY 27, 2009
An act to add and repeal Articles 5.21 (commencing with Section
14167.1) and 5.22 (commencing with Section 14167.31) of, Chapter 7 of
Part 3 of Division 9 of the Welfare and Institutions Code, relating
to Medi-Cal, making an appropriation therefor, and declaring the
urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1383, as amended, Jones. Medi-Cal: hospitals: supplemental
payments: coverage dividend fee.
Existing law establishes the Medi-Cal program, administered by the
State Department of Health Care Services, under which basic health
care services are provided to qualified low-income persons. Under
existing law, the Medi-Cal Hospital/Uninsured Care Demonstration
Project Act, specified hospital reimbursement methodologies are
applied 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.
This bill would require the department to pay specified hospitals
supplemental amounts for certain hospital services provided on or
before December 31, 2010. This bill would require the supplemental
payments to be made to hospitals at certain specified dates depending
upon the federal fiscal year for which the payments are being made.
This bill would prohibit the payment rates for specified hospitals
for certain services furnished before October 1, 2011, exclusive of
amounts payable pursuant to this bill, from being reduced below the
rates in effect on June 30, 2008. The bill would also prohibit the
payment rates for hospital inpatient services furnished before
October 1, 2011, under contracts negotiated pursuant to specified
provisions of existing law, from being reduced below the contract
rates in effect on June 1, 2009.
This bill would require the Director of Health Care Services to
promptly seek the federal approvals and ,
waivers , waiver modifications, and any other federal
action that may be necessary to implement the bill. The
bill would, on or before June 30, 2009, require the director to
submit any Medicaid state plan amendment necessary to implement the
provisions of this bill for some or all of the federal fiscal year
ending September 30, 2009. The bill would separately require the
director to submit a Medicaid state plan amendment request on or
before September 30, 2009 to implement the provisions of this bill
for some or all of the period beginning October 1, 2009, and ending
December 31, 2010. The bill would also require the director to
request from the federal government certain written assurances from
the Secretary of the United States Department of Health and Human
Services. The bill provides that the supplemental payment provisions
shall not be implemented unless and until the written assurances are
obtained from the federal government.
The bill would repeal the provisions regarding the supplemental
payments on the earlier of January 1, 2013, or the date the director
executes a declaration stating that a final judicial or
administrative determination has been made, as specified, that any of
the above provisions cannot be implemented.
This bill would require the department to calculate and impose a
coverage dividend fee on certain hospitals starting on the date that
the bill becomes effective and continue through and including
December 31, 2010, as specified. This bill would require the director
to seek federal approval of the fee and provides that if approval is
denied, the provisions regarding the fee shall become inoperative.
The bill would provide that no hospital shall be required to pay the
coverage dividend fee to the department unless and until the state
receives and maintains federal approval of the fee from the federal
Centers for Medicare and Medicaid Services.
This bill would provide that for calendar quarters prior to
federal approval of the fee and for the calendar quarter when the
department receives notice of federal approval, a hospital shall
certify, under penalty of perjury, and to the best of its knowledge,
on a form provided by the department, that it has set aside
in a separate account is prepared to pay an
amount equal to the coverage dividend fee for that hospital, as
specified. The bill would require hospitals, within 30 days
after federal approval a specified period of time
depending upon when the fee was assessed , to pay the principal
amount of the coverage dividend fee set aside in a separate
account it certified that it was prepared to pay
to the department, as specified. The bill would permit
any money set aside in a separate account in excess of the amount a
hospital is obligated to pay to the department to be returned to the
general accounts of each hospital.
By expanding the definition of the crime of perjury, this bill
would create a state-mandated local program.
This bill would require the department, within 10 days of
receiving federal approval, to send notice to providers, and publish
on its Internet Web site, certain information regarding the coverage
dividend fee. This bill would require, upon federal approval, that
within 45 days following the beginning of each calendar quarter,
commencing with the quarter in which the department receives federal
approval and ending with, and including, the calendar quarter ending
December 31, 2010, each hospital pay the department the coverage
dividend fee, as specified. This bill would authorize the department,
if a hospital fails to pay all or part of the coverage dividend fee
within 60 days of the date that payment is due, to deduct the unpaid
assessment and interest owed from any Medi-Cal payments to the
hospital until the full amount is recovered.
This bill would create the Coverage Dividend Revenue Fund in the
State Treasury and require the money collected from the coverage
dividend fee to be deposited into the fund. The money in the fund
would be continuously appropriated without regard to fiscal year to
the department for the purpose of making the above-described
supplemental reimbursement or expanding health care coverage for
children, with the supplemental reimbursement taking priority over
the expansion of health care coverage for children.
This bill would authorize the department, in consultation with the
hospital community, to modify any methodology regarding the
supplemental payments or the coverage dividend fee to the extent
necessary to meet the requirements of federal law or regulations or
to obtain federal approval, provided modifications do not violate the
intent of the provisions of this bill and are not inconsistent with
specified conditions of implementation.
The bill would repeal the provisions regarding the coverage
dividend fee on the earlier of January 1, 2013, or the date the
director executes a declaration stating either that any of specified
conditions have not been met, the date that a final judicial or
administrative determination has been made, as specified, that the
coverage dividend fee cannot be implemented, or that federal approval
for the fee has been denied.
This bill provides that it is the intent of the Legislature to
enact additional legislation that will specify more precisely the
calculation of the supplemental payment to individual hospitals and
the amount of the coverage dividend fee due from individual
hospitals. The bill provides that no supplemental payment shall be
paid or coverage dividend fee made due or payable until the
above-described legislation has been enacted.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Article 5.21 (commencing with Section 14167.1) is added
to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:
Article 5.21. Medi-Cal Hospital Provider Rate Stabilization
Act
14167.1. (a)
14167.1. (a) "Aggregate designated public
hospital amount" means, for an applicable federal fiscal year, an
amount that would equitably reimburse the designated public hospitals
for a portion of their costs of hospital services covered under the
Medi-Cal program for the entire federal fiscal year, taking into
account the supplemental payments made to other hospitals under this
article, the amount of the coverage dividend fee, and the amount of
the coverage dividend fee used to expand coverage, multiplied by the
percentage of the federal upper payment limit room paid to private
hospitals for hospital inpatient services under this article.
(b) "Aggregate managed care payment enhancement" means, for a
subject federal fiscal year, the aggregate amount of the coverage
dividend fee paid by hospitals for the subject federal fiscal year
under Article 5.22 (commencing with Section 14167.31) less the
nonmanaged care fee payments for the subject federal fiscal year.
(c) "Current Section 1115 Waiver" means California's Medi-Cal
Hospital/Uninsured Care Section 1115 Waiver Demonstration in effect
on the effective date of this article.
(d) "Designated public hospital" means any
one of the following hospitals:
(1) UC Davis Medical Center.
(2) UC Irvine Medical Center.
(3) UC San Diego Medical Center.
(4) UC San Francisco Medical Center.
(5) UC Los Angeles Medical Center, including Santa Monica-UCLA
Medical Center.
(6) LA County Harbor-UCLA Medical Center.
(7) LA County Olive View-UCLA Medical Center.
(8) LA County Rancho Los Amigos National Rehabilitation Center.
(9) LA County University of Southern California Medical Center.
(10) Alameda County Medical Center.
(11) Arrowhead Regional Medical Center.
(12) Contra Costa Regional Medical Center.
(13) Kern Medical Center.
(14) Natividad Medical Center.
(15) Riverside County Regional Medical Center.
(16) San Francisco General Hospital.
(17) San Joaquin General Hospital.
(18) San Mateo Medical Center.
(19) Santa Clara Valley Medical Center.
(20) Ventura County Medical Center.
(b)
(e) "Federal upper payment limit" means the upper
payment limit on the applicable category of hospitals pursuant to
federal law that will be allowed for purposes of federal financial
participation. The federal upper payment limit for hospital
outpatient services is as set forth in Section 447.321 of Title 42 of
the Code of Federal Regulations. The federal upper payment limit for
hospital inpatient services is as set forth in Section 447.272 of
Title 42 of the Code of Federal Regulations.
(f) "Federal upper payment limit room" means, for a subject
federal fiscal year, the amount by which the federal upper payment
limit exceeds the Medi-Cal payments for the services subject to the
federal upper payment limit exclusive of payments made under this
article.
(c)
(g) "Hospital inpatient services" means all services
covered under the Medi-Cal program and furnished by hospitals to
patients who are admitted as hospital inpatients and reimbursed on a
fee-for-service basis by the department directly or through its
fiscal intermediary. Hospital inpatient services include outpatient
services furnished by a hospital to a patient who is admitted to that
hospital within 24 hours of the provision of the outpatient services
that are related to the condition for which the patient is admitted.
Hospital inpatient services include physician services only if the
service is furnished to a hospital inpatient, the physician is
compensated by the hospital for the service, and the service is
billed to the Medi-Cal program by the hospital under a provider
number assigned to the hospital. Hospital inpatient services do not
include services for which a managed care health plan is financially
responsible.
(h) "Hospital litigant means" a hospital that initiates, or on
whose behalf is initiated, a case or proceeding in any state or
federal court in which the hospital seeks any relief of any sort
whatsoever, including, but not limited to, monetary relief,
injunctive relief, declaratory relief, or a writ, based in whole or
in part on a contention that any or all of this article or Article
5.22 (commencing with Section 14167.31) is unlawful and may not be
lawfully implemented. A hospital on whose behalf a case or proceeding
described in this subdivision is brought shall not be a hospital
litigant if the hospital successfully opts out or is dismissed from
the case or proceeding so that the hospital will not be in a position
to receive a benefit as a result of the case or proceeding.
(d)
(i) "Hospital outpatient services" means all services
covered under the Medi-Cal program furnished by hospitals to patients
who are registered as hospital outpatients and reimbursed by the
department on a fee-for-service basis directly or through its fiscal
intermediary. Hospital outpatient services include physician services
only if the service is furnished to a hospital outpatient, the
physician is compensated by the hospital for the service, and the
service is billed to the Medi-Cal program by the hospital under a
provider number assigned to the hospital. Hospital outpatient
services do not include services for which a managed health care plan
is financially responsible or services rendered by a hospital-based
federally qualified health center that receives reimbursement
pursuant to Section 14132.100.
(e) "Implementation date" means the effective date of all federal
approvals or waivers necessary for implementation of this article.
(j) "Inpatient share percentage" means the percentage of total
Medi-Cal acute care inpatient hospital days covered by all managed
health care plans that the department estimates will be covered by a
particular managed care health plan for the portion of a subject
federal fiscal year that begins on or after the phase 1
implementation date and ends on or before December 31, 2010. For
purposes of this subdivision, Medi-Cal acute care inpatient hospital
days covered by a managed health care plan shall include only days of
service covered under a written contract between a managed health
care plan and a private hospital, a nondesignated public hospital, or
a designated public hospital.
(f)
(k) "Managed care inpatient day" means an acute
inpatient day of service covered under the Medi-Cal program for which
a managed care health plan is financially responsible and that is
covered by a written contract between a managed care health plan and
a hospital or a hospital system.
(g)
(l) "Managed health care plan" means a health care
delivery system that manages the provision of health care and
receives prepaid capitated payments from the state in return for
providing services to Medi-Cal beneficiaries. Managed health care
plans include, but are not limited to, county organized health
systems, prepaid health plans and entities contracting with the
department to provide services pursuant to two-plan models, and
geographic managed care. Entities providing these services contract
with the department pursuant to Article 2.7 (commencing with Section
14087.3), Article 2.8 (commencing with Section 14087.5), or Article
2.91 (commencing with Section 14089) of Chapter 7, or Article 1
(commencing with Section 14200) or Article 7 (commencing with Section
14490) of Chapter 8.
(h)
(m) "Nondesignated public hospital" means a public
hospital that is licensed pursuant to subdivision (a) of Section 1250
of the Health and Safety Code, is not designated as a specialty
hospital in the hospital's annual financial disclosure report for the
hospital's latest fiscal year ending in 2008, and is defined in
paragraph (25) of subdivision (a) of Section 14105.98, excluding
designated public hospitals.
(n) "Nonmanaged care fee payments" means, for a subject federal
fiscal year, the aggregate amount paid for services furnished during
the subject federal fiscal year under Sections 14167.2, 14167.3,
14167.4, and 14167.5 plus the coverage enhancement amount for the
subject federal fiscal year.
(i)
(o) "Outpatient base rates" means the Medi-Cal payment
rates for hospital outpatient services in effect on the date
immediately preceding the implementation date.
(p) "Phase 1" means the implementation of this article for some or
all of the federal fiscal year ending September 30, 2009.
(q) "Phase 1 approval" means the federal approvals or waivers
necessary for implementation of this article for some or all of the
federal fiscal year ending September 30, 2009.
(r) "Phase 1 implementation date" means the effective date of all
federal approvals or waivers necessary for implementation of this
article for some or all of the federal fiscal year ending September
30, 2009.
(s) "Phase 2" means the implementation of this article for some or
all of the period beginning October 1, 2009, and ending December 31,
2010.
(t) "Phase 2 approval" means the federal approvals or waivers
necessary for implementation of this article for the period beginning
October 1, 2009, and ending December 31, 2010.
(u) "Phase 2 implementation date" means the effective date of all
federal approvals or waivers necessary for implementation of this
article for the period beginning October 1, 2009, and ending December
31, 2010.
(j)
(v) "Private hospital" means a hospital licensed
pursuant to subdivision (a) of Section 1250 of the Health and Safety
Code, is not designated as a specialty hospital in the hospital's
annual financial disclosure report for the hospital's latest fiscal
year ending in 2008, and is a nonpublic hospital, nonpublic-converted
hospital, or converted hospital as those terms are defined in
paragraphs (26) to (28), inclusive, respectively, of subdivision (a)
of Section 14105.98.
(k)
(w) "Subject federal fiscal year" means a federal
fiscal year that ends after the phase 1 implementation
date and begins before the termination date.
(l)
(x) "Termination date" means December 31, 2010.
14167.2. (a) Private hospitals shall be paid supplemental amounts
for hospital outpatient services provided on or before December 31,
2010, that shall be in addition to any other amounts payable to
hospitals with respect to hospital outpatient services and shall not
affect any other payments to hospitals.
(b) Medi-Cal rates for hospital outpatient services provided on or
before December 31, 2010, shall result in aggregate payments equal
to the federal upper payment limit.
14167.3. (a) Hospitals shall be paid supplemental amounts for
hospital inpatient services provided on or before December 31, 2010,
that shall be in addition to any other amounts payable to hospitals
with respect to hospital inpatient services and shall not affect any
other payments to hospitals.
(b) Medi-Cal rates for hospital inpatient services provided on or
before December 31, 2010, shall result in aggregate payments equal to
the federal upper payment limit.
14167.4. Private hospitals, nondesignated public hospitals, and
designated public hospitals shall be paid supplemental amounts for
hospital services provided on or before December 31, 2010, that are
furnished to managed care enrollees pursuant to this section. The
supplemental amounts shall be paid directly to the hospitals by the
department or its fiscal intermediary in addition to any other
amounts payable to hospitals with respect to hospital services
furnished to managed care enrollees and shall not affect any other
payments to hospitals.
14167.5. The amount of any payments made pursuant to this article
to private hospitals, including the amount of payments made pursuant
to Sections 14167.2, 14167.3, and 14167.4, shall not be included in
the calculation of the numerator or denominator of the low-income
percent of the OBRA limit for purposes of disproportionate share
hospital replacement fund payments to private hospitals made pursuant
to Section 14166.11.
14167.6. (a) The payments made pursuant to Sections 14167.2,
14167.3, and 14167.4 to hospitals for the 2008-09 federal fiscal year
shall be made on or before the later of August 31, 2009, or the 30th
day following the day on which federal approval is granted.
(b) The payments made pursuant to Sections 14167.2, 14167.3, and
14167.4 to hospitals for 2009-10 federal fiscal year shall be made on
a quarterly basis. The amounts payable to a hospital for each
quarter shall be one-fourth of the amount payable to the hospital for
the entire federal fiscal year. Payments to hospitals for each
quarter during the 2009-10 federal fiscal year shall be made on the
later of the last day of the second month of the quarter or the 30th
day following the day on which federal approval is granted.
(c) The payments made pursuant to Sections 14167.2, 14167.3, and
14167.4 to hospitals for the 2010-11 federal fiscal year shall be
made on or before the later of November 30, 2010, or the 30th day
following the day on which federal approval is granted.
14167.2. (a) Private hospitals shall be paid supplemental amounts
for hospital outpatient services provided on or after the phase 1
implementation date and on or before September 30, 2009, that shall
be in addition to any other amounts payable to hospitals with respect
to hospital outpatient services. These supplemental payments shall
not affect any other payments to hospitals.
(b) Medi-Cal rates for hospital outpatient services provided on or
after the phase 1 implementation date and on or before September 30,
2009, shall result in aggregate payments equal to the federal upper
payment limit for the federal fiscal year ending September 30, 2009,
or the portion of the federal fiscal year that is approved by the
federal government if the federal government approves the utilization
of the federal upper payment limit room for less than the entire
federal fiscal year.
14167.3. (a) Private hospitals shall be paid supplemental amounts
for hospital inpatient services provided on or after the phase 1
implementation date and on or before September 30, 2009, that shall
be in addition to any other amounts payable to private hospitals with
respect to hospital inpatient services. These supplemental payments
shall not affect any other payments to private hospitals.
(b) Medi-Cal rates for hospital inpatient services provided by
private hospitals on or after the phase 1 implementation date and on
or before September 30, 2009, shall result in aggregate payments
equal to the federal upper payment limit for the federal fiscal year
ending September 30, 2009, or the portion of the federal fiscal year
that is approved by the federal government if the federal government
approves the utilization of the federal upper payment limit room for
less than the entire federal fiscal year.
14167.4. (a) Nondesignated public hospitals shall be paid
supplemental amounts for hospital inpatient services provided on or
after the phase 1 implementation date and on or before September 30,
2009, that shall be in addition to any other amounts payable to
nondesignated public hospitals with respect to hospital inpatient
services. These supplemental payments shall not affect any other
payments to nondesignated public hospitals.
(b) Medi-Cal rates for hospital inpatient services provided by
nondesignated public hospitals on or after the phase 1 implementation
date and on or before September 30, 2009, shall result in aggregate
payments equal to the portion of the federal upper payment limit
allocable to nondesignated public hospitals for the subject federal
fiscal year ending September 30, 2009, or the portion of the federal
fiscal year that is approved by the federal government if the federal
government approves the utilization of the federal upper payment
limit room for less than the entire federal fiscal year.
14167.5. Designated public hospitals shall be paid additional
Medi-Cal reimbursement for hospital services they provide on or after
the phase 1 implementation date and on or before September 30, 2009.
The amount paid under this section shall in the aggregate be the
aggregate designated public hospital amount for the subject federal
fiscal year ending September 30, 2009, less the amount paid to
designated public hospitals under Section 14167.6 for services
rendered during the federal fiscal year ending September 30, 2009.
14167.6. (a) The department shall increase payments in the
aggregate to Medi-Cal managed health care plans for the provision of
Medi-Cal services on or after the phase 1 implementation date and on
or before September 30, 2009, in the amount of the aggregate managed
care hospital payment enhancement.
(b) The department shall increase payments for the subject federal
fiscal year ending September 30, 2009, to each Medi-Cal managed
health care plan that furnishes or is responsible for furnishing
hospital inpatient services a percentage of the aggregate managed
care hospital payment enhancement equal to the department's estimate
of the managed health care plan's inpatient share percentage for the
period beginning on the phase 1 implementation date and ending
September 30, 2009.
(c) The department shall estimate before the phase 1
implementation date each managed health care plan's inpatient
percentage using the methods and data that the department determines
is appropriate.
(d) The department may adjust managed care plans' inpatient
percentages during the federal fiscal year ending September 30, 2009,
to reflect changes in Medi-Cal enrollment among health plans during
the fiscal year, provided that the sum of all managed care plan's
inpatient share percentages shall always total 100 percent.
(e) Each Medi-Cal managed health care plan shall equitably expend,
in the form of additional payments to hospitals for managed care
inpatient days, 100 percent of any rate increase it receives under
this section. The amount of the additional payments shall be
determined on a per diem basis so that each hospital receives the
same additional amount per managed care inpatient day furnished
during a calendar quarter. Any delegation or attempted delegation by
a Medi-Cal managed health care plan of its obligation to make
payments under this section shall not relieve the managed health care
plan from its obligation to make the payments. Medi-Cal managed
health care plans shall submit the documentation the department may
require to demonstrate compliance with the provisions of this
subdivision. The documentation shall be available to hospitals for
inspection and copying under the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code), and no exemption from disclosure under the
California Public Records Act shall apply as to hospitals.
14167.8. The payments made pursuant to Sections 14167.2, 14167.3,
14167.4, 14167.5, and 14167.6 to hospitals and managed health care
plans for the 2008-09 federal fiscal year shall be made on or before
the later of August 31, 2009, or the 30th day following the date on
which phase 1 approval is granted.
14167.9. (a) Private hospitals shall be paid supplemental amounts
for hospital outpatient services provided on or after the phase 2
implementation date and on or before December 31, 2010, that shall be
in addition to any other amounts payable to hospitals with respect
to hospital outpatient services. These supplemental payments shall
not affect any other payments to hospitals.
(b) Medi-Cal rates for hospital outpatient services provided on or
after the phase 2 implementation date and on or before December 31,
2010, shall result in aggregate payments equal to the federal upper
payment limit for the subject federal fiscal year during which the
services are rendered or the portion of the subject federal fiscal
year that is approved by the federal government if the federal
government approves the utilization of the federal upper payment
limit room for less than the entire subject federal fiscal year.
14167.10. (a) Private hospitals shall be paid supplemental
amounts for hospital inpatient services provided on or after the
phase 2 implementation date and on or before December 31, 2010, that
shall be in addition to any other amounts payable to private
hospitals with respect to hospital inpatient services. These
supplemental payments shall not affect any other payments to private
hospitals.
(b) Medi-Cal rates for hospital inpatient services provided by
private hospitals on or after the phase 2 implementation date and on
or before December 31, 2010, shall result in aggregate payments equal
to the federal upper payment limit for the subject federal fiscal
year during which the services are rendered or the portion of the
subject federal fiscal year that is approved by the federal
government if the federal government approves the utilization of the
federal upper payment limit room for less than the entire subject
federal fiscal year.
14167.11. (a) Nondesignated public hospitals shall be paid
supplemental amounts for hospital inpatient services provided on or
after the phase 2 implementation date and on or before December 31,
2010, that shall be in addition to any other amounts payable to
nondesignated public hospitals with respect to hospital inpatient
services. These supplemental payments shall not affect any other
payments to nondesignated public hospitals.
(b) Medi-Cal rates for hospital inpatient services provided by
nondesignated public hospitals on or after the phase 2 implementation
date and on or before December 31, 2010, shall result in aggregate
payments equal to the portion of the federal upper payment limit
allocable to nondesignated public hospitals for the subject federal
fiscal year during which the services are rendered or the portion of
the subject federal fiscal year that is approved by the federal
government if the federal government approves the utilization of the
federal upper payment limit room for less than the entire subject
federal fiscal year.
14167.12. Designated public hospitals shall be paid additional
Medi-Cal reimbursement for hospital services for each subject federal
fiscal year which begins on or after the phase 2 implementation date
and ends on or before September 30, 2011. The amount paid under this
section for a subject federal fiscal year shall in the aggregate be
the aggregate designated public hospital amount for the subject
federal fiscal year less the amount paid to designated public
hospitals under Section 14167.13 for services rendered during the
subject federal fiscal year.
14167.13. (a) The department shall increase payments in the
aggregate to Medi-Cal managed health care plans for the provision of
Medi-Cal services for each subject federal fiscal year which begins
on or after the phase 2 implementation date and ends on or before
September 30, 2011, in the amount of the aggregate managed care
hospital payment enhancement.
(b) The department shall increase payments for each subject
federal fiscal year to each Medi-Cal managed health care plan that
furnishes or is responsible for furnishing hospital inpatient
services a percentage of the aggregate managed health care hospital
payment enhancement equal to the department's estimate of the managed
health care plan's inpatient share percentage for the subject
federal fiscal year.
(c) The department shall estimate before the implementation date
and the beginning of each subject federal fiscal year beginning on or
after the implementation date each managed health care plan's
inpatient percentage using methods and data that the department
determines is appropriate.
(d) The department may adjust managed health care plans'
inpatient percentages during a subject federal fiscal year to reflect
changes in Medi-Cal enrollment among plans during the fiscal year,
provided that the sum of all managed health care plan's inpatient
share percentages must always total 100 percent.
(e) Each Medi-Cal managed health care plan shall equitably expend,
in the form of additional payments to hospitals for managed care
inpatient days, 100 percent of any rate increase it receives under
this section. The amount of the additional payments shall be
determined on a per diem basis so that each hospital receives the
same additional amount per managed care inpatient day furnished
during a calendar quarter. Any delegation or attempted delegation by
a Medi-Cal managed health care plan of its obligation to make
payments under this section shall not relieve the managed care plan
from its obligation to make the payments. Medi-Cal managed health
care plans shall submit the documentation that the department may
require to demonstrate compliance with the provisions of this
subdivision. The documentation shall be available to the public under
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code), and
no exemption from disclosure under the California Public Records Act
shall apply.
14167.14. The amount of any payments made pursuant to this
article to private hospitals, made either directly or by managed
health care plans pursuant to sections 14167.6 and 14167.13, shall
not be included in the calculation of the numerator or denominator of
the low-income percent of the OBRA limit for purposes of
disproportionate share hospital replacement fund payments to private
hospitals made pursuant to Section 14166.11.
14167.15. (a) The payments made pursuant to Sections 14167.9,
14167.10, 14167.11, 14167.12, and 14167.13 to hospitals and managed
health care plans for the 2009-10 federal fiscal year shall be made
on a quarterly basis. The amounts payable to the hospital for each
quarter shall be one-fourth of the amount payable to the hospital for
the entire federal fiscal year. Payments to hospitals for each
quarter during the 2009-10 federal fiscal year shall be made on the
later of the last day of the second month of the quarter or the 30th
day following the day on which phase 2 federal approval is granted.
(b) The payments made pursuant to Sections 14167.9, 14167.10,
14167.11, 14167.12, and 14167.13 to hospitals and managed health care
plans for the 2010-11 federal fiscal year shall be made on or before
the later of November 30, 2010, or the 30th day following the day on
which phase 2 federal approval is granted.
14167.7. 14167.16. (a) Payment rates
for hospital outpatient services furnished by private hospitals and
nondesignated public hospitals before October 1, 2011, exclusive of
amounts payable under this article, shall not be reduced below the
rates in effect on June 30, 2008.
(b) Rates payable to hospitals for hospital inpatient services
furnished before October 1, 2011, under contracts negotiated pursuant
to the Selective Provider Contracting Program shall not be reduced
below the contract rates in effect on June 1, 2009. This subdivision
shall not prohibit changes to the supplemental payments paid to
individual hospitals pursuant to Sections 14166.12, 14166.17, and
14166.23. The aggregate supplemental payments made pursuant to
Sections 14166.12, 14166.17, and 14166.23 for a state fiscal year
that ends after the implementation date and begins before the
termination date shall not be less than the aggregate payments made
pursuant to Sections 14166.12, 14166.17, and 14166.23 during the
2007-08 state fiscal year.
(c) Payments to private hospitals and nondesignated public
hospitals for hospital inpatient services furnished before October 1,
2011, that are not reimbursed pursuant to a contract negotiated
pursuant to the Selective Provider Contracting Program (Article 2.6
(commencing with Section 14081)), exclusive of amounts payable under
this article, shall not be less than the amount of payments that
would have been made pursuant to the payment methodology in effect on
June 30, 2008.
(d) Payments to hospitals pursuant to Sections 14166.11 and
14166.16 for a state fiscal year that ends after the implementation
date and begins before the termination date shall not be less than
the payments due under the methodology set forth in those sections in
effect for the 2007-08 state fiscal year.
(e) Managed care health plans shall not take into account payments
made pursuant to this article in negotiating the amount of payments
to hospitals that are not made pursuant to this article.
14167.8. (a) The director shall promptly seek the federal
approvals or waivers as may be necessary to implement this article
and obtain federal financial participation to the maximum extent
possible for the payments made pursuant to this article.
(b) In implementing this article, the department may utilize the
14167.17. (a) The director shall promptly seek the
federal approvals, waivers, waiver modifications, and any other
federal action as may be necessary to implement phase 1 and obtain
federal financial participation to the maximum extent possible for
the payments made with respect to phase 1. The director shall submit
any Medicaid state plan amendment that may be necessary to implement
phase 1 on or before June 30, 2009.
(b) The director shall request from the federal government, in
connection with obtaining federal approval for phase 1, the following
written assurances from the Secretary of the United States
Department of Health and Human Services:
(1) The approval of phase 1 will not result in funding reductions
to hospitals under the current Section 1115 Waiver.
(2) The federal Centers for Medicare and Medicaid Services will
explore, with the state, the need for growth in the safety net care
pool established pursuant to the current Section 1115 Waiver.
(3) The additional federal funding provided for the 2008-09
federal fiscal year as a result of the implementation of phase 1 will
not be taken into account in the determination of the amount of
federal funds that will be available pursuant to a waiver under
Section 1115 of the federal Social Security Act for a demonstration
which will replace the current Section 1115 Waiver except as it may
increase the amount available under budget neutrality.
(4) The funding and reimbursement protocol for claiming against
the safety net care pool will not be amended for the duration of the
current Section 1115 Waiver.
(c) Phase 1 shall not be implemented unless and until written
assurances substantially as described in subdivision (b) are obtained
from the federal government.
14167.18. (a) The director shall submit a Medicaid state plan
amendment for phase 2 to the federal government on or before
September 30, 2009, and shall seek all federal approvals, waivers,
waiver modifications, and any other federal action as may be
necessary to implement phase 2 and obtain federal financial
participation to the maximum extent possible for the payments made
with respect to phase 2.
(b) The director shall negotiate the federal approvals required to
implement phase 2 concurrently with the negotiation of a federal
waiver under Section 1115 of the federal Social Security Act for a
demonstration that will replace the current Section 1115 Waiver.
(c) Phase 2 shall not be implemented unless and until the federal
government approves a federal waiver under Section 1115 of the
federal Social Security Act for a demonstration that will replace the
current Section 1115 Waiver.
14167.19. (a) In
implementing this article, the department may utilize the
services of the Medi-Cal fiscal intermediary through a change order
to the fiscal intermediary contract to administer this program,
consistent with the requirements of Sections 14104.6, 14104.7,
14104.8, and 14104.9. Contracts entered into with any Medi-Cal fiscal
intermediary shall not be subject to Part 2 (commencing with Section
10100) of Division 2 of the Public Contract Code.
(c)
(b) This article shall become inoperative in the event,
and on the effective date, of a final judicial determination by any
court of appellate jurisdiction or a final determination by the
federal Department of Health and Human Services or the federal
Centers for Medicare and Medicaid Services that any element of this
article cannot be implemented.
(d)
(c) In the event any hospital, or any party on behalf
of a hospital, shall initiate a case or proceeding in any state or
federal court in which the hospital seeks any relief of any sort
whatsoever, including, but not limited to, monetary relief,
injunctive relief, declaratory relief, or a writ, based in whole or
in part on a contention that any or all of this article is unlawful
and may not be lawfully implemented, all of the following shall
apply:
(1) No payments shall be made to a hospital
hospital litigant pursuant to this article until the case
or proceeding is finally resolved, including the final disposition of
all appeals.
(2) Any amount computed to be payable to a hospital litigant
pursuant to this article for a subject federal fiscal year
shall be withheld by the department and shall be paid to the hospital
litigant only after the case or proceeding is finally
resolved, including the final disposition of all appeals.
14167.20. (a) It is the intent of the Legislature to enact
additional legislation that will specify more precisely the
calculation of the supplemental payment to individual hospitals under
this article.
(b) No supplemental payments shall be made pursuant to this
article until the legislation described in subdivision (a) has been
enacted.
14167.9. 14167.21. This article
shall remain in effect only until the earlier of the following dates
and as of that date is repealed:
(a) January 1, 2013.
(b) The date the director executes a declaration, which shall be
submitted to the Secretary of State, the Assembly and Senate
Committees on Health, the Assembly and Senate Committees on
Appropriations, the Assembly Committee on Budget, and the Senate
Committee on Budget and Fiscal Review, stating that a final judicial
or administrative determination described in subdivision (c)
of Section 14167.8 (b) of Section 14167.19 has
been made.
SEC. 2. Article 5.22 (commencing with Section 14167.31) is added
to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:
Article 5.22. Hospital Coverage Dividend Fee Act
14167.31. For purposes of this article, "subject federal fiscal
year" means a federal fiscal year ending after the effective date of
federal approval of Article 5.21 (commencing with Section 14167.1)
and beginning before December 31, 2010.
14167.31. For purposes of this article, the following definitions
shall apply:
(a) "Phase 1" means the implementation of this article for some or
all of the subject federal fiscal year ending September 30, 2009.
(b) "Phase 1 approval" means the federal approvals or waivers
necessary for implementation of this article for some or all of the
subject federal fiscal year ending September 30, 2009.
(c) "Phase 2" means the implementation of this article for some or
all of the period beginning October 1, 2009, and ending December 31,
2010.
(d) "Phase 2 approval" means the federal approvals or waivers
necessary for implementation of this article for the period beginning
October 1, 2009, and ending December 31, 2010.
(e) "Subject federal fiscal year" means a federal fiscal year
ending on or after the effective date of federal approval of Article
5.21 (commencing with Section 14167.1) and beginning on or before
December 31, 2010.
14167.32. (a) There shall be imposed a coverage dividend fee that
is consistent with the principle of shared benefit and shared
responsibility.
(b) The coverage dividend fee shall be assessed on hospitals,
except for designated public hospitals, as defined in subdivision (a)
of Section 14167.1, starting on the date that this article becomes
effective and shall continue through and including December 31, 2010.
(b) The coverage dividend fee shall be assessed on hospitals
licensed pursuant to subdivision (a) of Section 1250 of the Health
and Safety Code, except for public hospitals, as defined in paragraph
(25) of subdivision (a) of Section 14105.98, and hospitals that are
designated as specialty hospitals in the hospital's annual financial
disclosure reports for the hospital's latest fiscal year ending in
2008, commencing on the effective date of this article and shall
continue through and including December 31, 2010.
(c) The department shall calculate the amount of the coverage
dividend fee for each hospital within 10 days after the date when
this article becomes effective. Within two days of calculating the
coverage dividend fee, the department shall send notice of the amount
of the coverage dividend fee to each hospital.
(d) For calendar quarters prior to federal approval of the
implementation of this article and for the calendar quarter when the
department receives notice of federal approval of the implementation
of this article, the following provisions shall apply:
(1) For the calendar quarters, and partial quarters thereof,
between the date that this article becomes effective and September
30, 2009, inclusive, the following provisions shall apply:
(A) If this article becomes effective on or before June 30, 2009,
the following provisions shall apply:
(i) On the later of 10 days after this article becomes effective
or May 15, 2009, each hospital shall certify, under penalty of
perjury, and to the best of its knowledge, on a form provided by the
department, that it has set aside in a separate account an amount
equal to the coverage dividend fee for that hospital divided by the
number of days from the date that this article becomes effective to
September 30, 2009, inclusive, multiplied by the number of days from
the date that this article becomes effective to June 30, 2009,
inclusive.
(ii) On or before August 15, 2009, each hospital shall certify,
under penalty of perjury, and to the best of its knowledge, on a form
provided by the department, that it has set aside in a separate
account an amount equal to the coverage dividend fee for that
hospital divided by the number of days from the date that this
article becomes effective to September 30, 2009, inclusive,
multiplied by the number of days from July 1, 2009, to September 30,
2009, inclusive.
(B) If this article becomes effective on or after July 1, 2009, on
the later of 10 days after this article becomes effective or August
15, 2009, each hospital shall certify, under penalty of perjury, and
to the best of its knowledge, on a form provided by the department,
that it has set aside in a separate account an amount equal to the
coverage dividend fee for that hospital.
(2) For each calendar quarter beginning on or after October 1,
2009, and ending on or before September 30, 2010, within 45 days
following the beginning of each calendar quarter, each hospital shall
certify, under penalty of perjury, and to the best of its knowledge,
on a form provided by the department, that it has set aside in a
separate account an amount equal to the coverage dividend fee for
that hospital divided by four.
(3) For the calendar quarter beginning October 1, 2010, on or
before November 15, 2010, each hospital shall certify, under penalty
of perjury, and to the best of its knowledge, on a form provided by
the department, that it has set aside in a separate account an amount
equal to the coverage dividend fee for that hospital.
(4) All certifications required by this subdivision shall include
a certification from each hospital that it has maintained any
coverage dividend fee amounts previously set aside in a separate
account in that separate account, and that within 30 days after
federal approval of the implementation of this article, the hospital
shall pay the principal amount of the coverage dividend fee set aside
in a separate account to the department pursuant to paragraph (2) of
subdivision (e).
(e) Upon federal approval of the implementation of this article,
all of the following shall become operative:
(1) Within 10 days following the notice of approval by the federal
government of the implementation of this article, the department
shall send notice to providers, and publish on its Internet Web site
the following information:
(A) The date that the state received notice of federal approval of
the implementation of this article.
(B) The percentage of the fee that shall be collected to meet the
federal upper payment limit, as defined in subdivision (b) of Section
14167.1.
(C) A notice to each hospital subject to the coverage dividend fee
stating all of the following:
(i) That the hospital shall, within 30 days after the date the
department received notice of federal approval of the implementation
of this article, pay the principal amounts of the coverage dividend
fee set aside in a separate account to the department multiplied by
the percentage of the fee that will be collected to meet the federal
upper payment limit as described in subparagraph (B).
(ii) The total amount of the fee that will be payable by the
hospital on the date described in clause (i).
(2) Within 30 days after the date the department receives notice
of federal approval, each hospital shall pay the principal amount of
the coverage dividend fee the hospital has certified pursuant to
subdivision (d) that the hospital has set aside in a separate account
to the department multiplied by the percentage of the fee that shall
be collected to meet the federal upper payment limit as described in
subparagraph (B) of paragraph (1). Any money set aside in a separate
account in excess of the amount the hospital is obligated to pay to
the department may be returned to the general accounts of each
hospital.
(3) Subdivision (d) shall become inoperative beginning the first
day of the first calendar quarter following the quarter in which the
department receives notice of approval by the federal government of
the implementation of this article.
(4) Within 45 days following the beginning of each calendar
quarter, commencing with the quarter in which the department receives
notice of federal approval and ending with, and including, the
calendar quarter ending December 31, 2010, each hospital shall pay to
the department the amounts that the hospital would have certified to
pay for the relevant quarter pursuant to subdivision (d) multiplied
by the percentage of the fee that will be collected to meet the
federal upper payment limit described in subparagraph (B) of
paragraph (1).
(5) The coverage dividend fee, as paid pursuant to this
subdivision, shall be paid by each hospital subject to the fee and
paid to the department for deposit in the Coverage Dividend Revenue
Fund created pursuant to Section 14167.35. Deposits into the fund may
be accepted at any time and shall be credited toward the fiscal year
for which they were assessed.
(f) (1) Subdivision (d) shall become inoperative if either of the
following situations occur:
(A) The federal Centers for Medicare and Medicaid Services denies
approval for the implementation of Article 5.21 (commencing with
Section 14167.1) or this article and neither article can be modified
by the department pursuant to subdivision (g) of Section 14167.35 in
order to meet the requirements of federal law or to obtain federal
approval.
(B) The federal Centers for Medicare and Medicaid Services does
not approve the implementation of Article 5.21 (commencing with
Section 14167.1) or this article on or before January 1, 2012.
(2) If subdivision (d) becomes inoperative pursuant to this
subdivision, each hospital subject to the coverage dividend fee shall
be released from any certifications made pursuant to subdivision (d)
and any amounts previously set aside in a separate account and any
interest incurred on those amounts may be returned to the general
accounts of each hospital.
(g) In no case shall the aggregate fees collected on an annual
fiscal year basis pursuant to this section exceed the maximum
percentage of the annual aggregate net patient revenue for hospitals
subject to the fee that is prescribed pursuant to federal law and
regulations as necessary to preclude a finding that an indirect
guarantee has been created.
(d) For calendar quarters, and partial quarters thereof, in phase
1, the following provisions shall apply:
(1) Within 30 days after the effective date of this article, each
hospital shall certify, under penalty of perjury, and to the best of
its knowledge, on a form provided by the department, that the
hospital is prepared to pay the coverage dividend fee for that
hospital for the subject federal fiscal year by the later of 30 days
after phase 1 approval or August 15, 2009.
(2) Upon phase 1 approval, all of the following shall become
operative:
(A) Within 10 days following the notice of phase 1 approval, the
department shall send notice to providers, and publish on its
Internet Web site, the following information:
(i) The date that the state received notice of phase 1 approval.
(ii) The percentage of the fee that shall be collected to meet the
federal upper payment limit, as defined in subdivision (e) of
Section 14167.1.
(B) The notice to each hospital subject to the coverage dividend
fee shall also state all of the following:
(i) That the hospital shall pay the coverage dividend fee for the
subject federal fiscal year, multiplied by the percentage of the fee
that will be collected to meet the federal upper payment limit as
described in clause (ii) of subparagraph (A), by the later of 30 days
after phase 1 approval or August 15, 2009.
(ii) The total amount of the fee that will be payable by the
hospital on the date described in clause (i).
(C) By the later of 30 days after phase 1 approval or August 15,
2009, each hospital shall pay the amounts stated in the department's
notice pursuant to subparagraph (B).
(e) For calendar quarters in phase 2, the following provisions
shall apply:
(1) For calendar quarters prior to phase 2 approval, and for the
calendar quarter when the department receives notice of phase 2
approval, the following provisions shall apply:
(A) For each calendar quarter beginning on or after October 1,
2009, and ending on or before September 30, 2010, within 45 days
following the beginning of each calendar quarter, each hospital shall
certify, under penalty of perjury, and to the best of its knowledge,
on a form provided by the department, that the hospital is prepared
to pay an amount equal to the coverage dividend fee for that hospital
for the subject federal fiscal year divided by four, in addition to
any amounts that it has previously certified it was prepared to pay,
within 30 days after phase 2 approval.
(B) For the calendar quarter beginning on October 1, 2010, each
hospital shall, on or before November 15, 2010, certify, under
penalty of perjury, and to the best of its knowledge, on a form
provided by the department, that the hospital is prepared to pay an
amount equal to the coverage dividend fee for that hospital for the
subject federal fiscal year, in addition to any amounts that it has
previously certified it was prepared to pay, within 30 days after
phase 2 approval.
(2) Upon phase 2 approval, all of
the following shall become operative:
(A) Within 10 days following the notice of phase 2 approval, the
department shall send notice to providers, and publish on its
Internet Web site, the following information:
(i) The date that the state received notice of phase 2 approval.
(ii) The percentage of the fee that shall be collected to meet the
federal upper payment limit, as defined in subdivision (e) of
Section 14167.1.
(B) The notice to each hospital subject to the coverage dividend
fee shall also state all of the following:
(i) That the hospital shall, within 30 days after the date the
department received notice of phase 2 approval, pay the amounts of
the coverage dividend fee that the hospital had previously certified
it was prepared to pay pursuant to paragraph (1), multiplied by the
percentage of the fee that will be collected to meet the federal
upper payment limit as described in clause (ii) of subparagraph (A).
(ii) The total amount of the fee that will be payable by the
hospital on the date described in clause (i).
(C) Within 30 days after the date the department receives notice
of phase 2 approval, each hospital shall pay the amounts stated in
the department's notice pursuant to this paragraph.
(D) Paragraph (1) shall become inoperative beginning the first day
of the first calendar quarter following the quarter in which the
department receives notice of phase 2 approval.
(E) Within 45 days following the beginning of each calendar
quarter, commencing with the quarter following the last quarter
governed by paragraph (1) and ending with, and including, the
calendar quarter ending December 31, 2010, each hospital shall pay to
the department the amounts that the hospital would have certified to
pay for the relevant quarter pursuant to paragraph (1) multiplied by
the percentage of the fee that will be collected to meet the federal
upper payment limit described in clause (ii) of subparagraph (A).
(f) The coverage dividend fee, as paid pursuant to this
subdivision, shall be paid by each hospital subject to the fee and
paid to the department for deposit in the Coverage Dividend Revenue
Fund created pursuant to Section 14167.35. Deposits into the fund may
be accepted at any time and shall be credited toward the fiscal year
for which they were assessed.
(g) (1) Subdivision (d) shall become inoperative if the federal
Centers for Medicare and Medicaid Services denies approval for, or
does not approve before January 1, 2012, the implementation of
Article 5.21 (commencing with Section 14167.1) or this article for
phase 1, and neither article can be modified by the department
pursuant to subdivision (g) of Section 14167.35 in order to meet the
requirements of federal law or to obtain federal approval.
(2) Subdivision (e) shall become inoperative if the federal
Centers for Medicare and Medicaid Services denies approval for, or
does not approve before January 1, 2012, the implementation of
Article 5.21 (commencing with Section 14167.1) or this article for
phase 2, and neither article can be modified by the department
pursuant to subdivision (g) of Section 14167.35 in order to meet the
requirements of federal law or to obtain federal approval.
(3) If subdivision (d) or (e) becomes inoperative pursuant to this
subdivision, each hospital subject to the coverage dividend fee
shall be released from any certifications made pursuant to
subdivision (d) or (e).
(h) In no case shall the aggregate fees collected in a subject
federal fiscal year pursuant to this section exceed the maximum
percentage of the annual aggregate net patient revenue for hospitals
subject to the fee that is prescribed pursuant to federal law and
regulations as necessary to preclude a finding that an indirect
guarantee has been created.
(h)
(i) Interest shall be assessed on coverage dividend
fees not paid on the date due at the same rate at which the
department assesses interest on Medi-Cal program overpayments to
hospitals that are not repaid when due. Interest shall begin to
accrue the day after the date the payment was due and shall be
deposited in the Coverage Dividend Revenue Fund.
(i)
(j) When a hospital fails to pay all or part of the
coverage dividend fee within 60 days of the date that payment is due,
the department may deduct the unpaid assessment and interest owed
from any Medi-Cal payments to the hospital until the full amount is
recovered. Any deduction shall be made only after written notice to
the hospital and may be taken over a period of time. All amounts
deducted by the department pursuant to this subdivision shall be
deposited in the Coverage Dividend Revenue Fund.
(j)
(k) In accordance with the provisions of the Medicaid
state plan, the payment of the coverage dividend fee shall be
considered as an allowable cost for Medi-Cal cost reporting and
reimbursement purposes.
(k)
(l) The department shall work in consultation with the
hospital community to implement the coverage dividend fee.
(l)
(m) The department shall offer to enter into a contract
with each hospital subject to the coverage dividend fee, or to amend
existing contracts with the hospital, that obligates the department
to use the proceeds of the coverage dividend fee solely for the
purposes set forth in this article and to comply with all of its
obligations set forth in Article 5.21 (commencing with Section
14167.1) and this article, including, but not limited to, its
obligation to continue prior reimbursement levels. Each contract
shall also provide that the hospital's obligation to pay the coverage
dividend fee shall be contingent on the department performing its
obligations under the contract. Each contract shall be binding on the
department and enforceable by the hospitals regardless of whether
the hospitals have given adequate consideration in return for the
department's obligations.
(n) Any amounts of the coverage dividend fee collected in excess
of the funds required to implement subdivision (c) of Section
14167.35 shall be refunded to the hospitals subject to the coverage
dividend fee, in a manner consistent with federal law.
14167.35. (a) The Coverage Dividend Revenue Fund is hereby
created in the State Treasury. Notwithstanding Section 16305.7 of the
Government Code, any interest earned on deposits in the fund shall
be retained in the fund for purposes specified in subdivision (c).
(b) All fees and interest required to be paid to the state
pursuant to this article shall be paid in the form of remittances
payable to the department. The department shall directly transmit the
payments to the Treasurer to be deposited in the Coverage Dividend
Revenue Fund.
(c) All funds in the Coverage Dividend Revenue Fund, together with
any interest, and penalties, shall be used only for the following
purposes in the following order of priority, subject to the
requirements of subdivision (d):
(1) To make increased payments to hospitals pursuant to Article
5.21 (commencing with Section 14167.1).
(2) To pay for the expansion of health care coverage for children
beyond existing levels. The maximum amount of the coverage
dividend fee that may be used for this purpose shall be eighty
million dollars ($80,000,000) for each quarter during the 2008-09
federal fiscal year that begins after the actual date on which all
federal approvals are obtained that are necessary to implement
Article 5.21 (commencing with Section 14167.1) and this article for
phase 1, and each quarter that begins after the actual date on which
all federal approvals are obtained that are necessary to implement
Article 5.21 (commencing with Section 14167.1) and this
article for phase 2 and ends on or before December 31, 2010.
(3) To be used to make the increased payments to managed health
care plans pursuant to Article 5.21 (commencing with Section
14167.1). The amount used for making increased payments to managed
health care plans shall be limited to the maximum amount approved by
the federal Centers for Medicare and Medicaid Services for purposes
of federal financial participation.
(d) No portion of the Coverage Dividend Revenue Fund shall be used
in support of the administration of the department except that these
fees may be used in combination with federal funds to fund the
actual cost of collecting the fee.
(e) Notwithstanding Section 13340 of the Government Code, the
Coverage Dividend Revenue Fund shall be continuously appropriated to
the department for the purposes described in subdivision (c) without
regard to fiscal year.
(f) In seeking federal approval pursuant to Section 14167.37, the
department shall seek specific approval from the federal Centers for
Medicare and Medicaid Services to exempt providers identified in this
article as exempt from the fees specified, including the submission,
as may be necessary, of a request for waiver of the broad-based
requirement, waiver of the uniform tax requirement, or both, pursuant
to Section 433.68(e)(1) and (e)(2) of Title 42 of the Code of
Federal Regulations. The department shall separately seek
approval for phase 1 and for phase 2.
(g) Any methodology specified in Article 5.21 (commencing with
Section 14167.1) and this article may be modified by the department,
in consultation with the hospital community, to the extent necessary
to meet the requirements of federal law or regulations or to obtain
federal approval, provided the modifications do not violate the
intent of Article 5.21 (commencing with Section 14167.1) or this
article and are not inconsistent with the conditions of
implementation set forth in subdivisions (a) and (c) of Section
14167.36.
(h) The department, in consultation with the hospital community,
shall make retrospective adjustments, as necessary, to the amounts
calculated pursuant to Section 14167.32 in order to ensure compliance
with the federal limits set forth in Section 433.68 of Title 42 of
the Code of Federal Regulations or elsewhere in federal law.
14167.36. (a) This article shall only be implemented so long as
the following conditions are met:
(1) The coverage dividend fee is established in a manner
consistent with this article.
(2) The coverage dividend fee is deposited, including any interest
on the fee after collection by the department, in a segregated fund
apart from the General Fund.
(3) The proceeds of the coverage dividend fee, including any
interest, penalties, and related federal reimbursement, are only used
for the purposes set forth in this article.
(b) No hospital shall be required to pay the coverage dividend fee
to the department unless and until the state receives and maintains
federal approval of the coverage dividend fee and Article 5.21
(commencing with Section 14167.1) from the federal Centers for
Medicare and Medicaid Services for the period for which the
coverage dividend fee is assessed .
(c) Hospitals shall be required to pay the coverage dividend fee
to the department as set forth in this article only as long as all of
the following conditions are met:
(1) The federal Centers for Medicare and Medicaid Services allows
the use of the coverage dividend fee as set forth in this article
for the period for which the coverage dividend fee is assessed
.
(2) The Medi-Cal Hospital Provider Rate Stabilization Act (Article
5.21 (commencing with Section 14167.1)) is enacted and remains in
effect and hospitals are reimbursed the increased rates beginning on
the implementation date, as defined in subdivision (e) of Section
14167.1.
(3) The full amount of the coverage dividend fee assessed and
collected pursuant to this article remains available only for the
purposes specified in this article.
(d) This article shall become inoperative in the event, and on the
effective date, of a final judicial determination made by any state
or federal court that is not appealed, or by a court of appellate
jurisdiction that is not further appealed, in any action by any
party, or a final determination by the administrator of the federal
Centers for Medicare and Medicaid Services, that the coverage
dividend fee assessed and collected pursuant to this article cannot
be implemented.
14167.37. (a) The director shall seek federal approval for the
implementation of each element of this article. If after seeking
federal approval, federal approval is denied, this article shall
become inoperative.
14167.37. (a) The director shall seek federal
approval for the implementation of each element of this article. If,
after seeking phase 1 approval, federal approval is denied, this
article shall become inoperative during the period between the date
that this article becomes effective and September 30, 2009. If, after
seeking phase 2 approval, federal approval is denied, this article
shall become inoperative during the period between October 1, 2009,
and December 31, 2010.
(b) Each and every report or informational submission required
from providers pursuant to this article shall contain a legal
verification to be signed by the provider verifying under penalty of
perjury that the information provided is true and correct, and that
any information in supporting documents submitted by the provider is
true and correct.
14167.38. (a) It is the intent of the Legislature to enact
additional legislation that will specify more precisely the
calculation of the amount of the coverage dividend fee due from
individual hospitals under this article.
(b) No coverage dividend fee shall be made due or payable pursuant
to this article until the legislation described in subdivision (a)
has been enacted.
14167.38. 14167.39. This article
shall remain in effect only until the earlier of the following dates
and as of that date is repealed:
(a) January 1, 2013.
(b) The date the director executes a declaration, which shall be
submitted to the Secretary of State, the Assembly and Senate
Committees on Health, the Assembly and Senate Committees on
Appropriations, the Assembly Committee on Budget, and the Senate
Committee on Budget and Fiscal Review, stating any one of the
following:
(1) One or more of the conditions listed in subdivision (a) of
Section 14167.36 have not been met.
(2) A final judicial or administrative determination described in
subdivision (d) of Section 14167.36 has been made.
(3) Federal approval for implementation of this article has been
denied.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
SEC. 4. 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 make the necessary statutory changes to increase
Medi-Cal payments to hospitals and improve access, at the earliest
possible time, so as to allow this act to be operative as soon as
approval from the federal Centers for Medicare and Medicaid Services
is obtained by the State Department of Health Care Services, it is
necessary that this act take effect immediately.