BILL NUMBER: AB 1383	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 1, 2009
	AMENDED IN SENATE  JUNE 25, 2009
	AMENDED IN SENATE  JUNE 17, 2009
	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
   (Principal coauthor: Senator Alquist)
   (Coauthor: Assembly Member De Leon)

                        FEBRUARY 27, 2009

   An act to add and repeal Articles 5.21 (commencing with Section
 14167.1)   14167.2)  and 5.22 (commencing
with Section  14167.31)   14167.32)  of,
Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, relating to Medi-Cal, 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
and Medi-Cal managed health care plans supplemental amounts for
certain hospital services  provided on or before December 31,
2010  .
    This bill would require the Director of Health Care Services to
promptly seek  the federal approvals, waivers, waiver
modifications, and any other federal action   the
federal approvals  that may be necessary to implement the
above-described supplemental payment provisions.  The bill
would, on or before June 30, 2009, require that the director have
submitted any Medicaid state plan amendment necessary to implement
the supplemental payment 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
supplemental payment provisions of this bill for some or all of the
period beginning October 1, 2009, and ending December 31, 2010.
 
   The bill would 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.  

   This bill would prohibit supplemental payments for some or all of
the 2008-09 federal fiscal year until the director executes a
declaration, which shall be submitted to the Legislature, containing
statements relating to the impact this bill's provisions will have on
other Medi-Cal reimbursement methodologies. 
   This bill would 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.
The bill would provide that no hospital shall be required to pay the
coverage dividend fee to the department until the state receives and
maintains federal approval of the fee and the above-described
supplemental payments from the federal Centers for Medicare and
Medicaid Services.
   This bill would provide that the funds collected from the coverage
dividend fee, and any matching federal funds, shall only be used for
certain purposes, including providing the above-described
supplemental payments and health care coverage for children. 
   This bill would require the director to negotiate the federal
approvals required to implement the bill's provisions for the 2009-10
and 2010-11 federal fiscal years concurrently with the negotiation
of a federal waiver that will replace the current Medi-Cal
Hospital/Uninsured Care Demonstration Project. The bill would provide
that its provisions shall not be implemented until the federal
government approves a federal waiver for a demonstration that will
replace the current Medi-Cal Hospital/Uninsured Care Demonstration
Project and is not adversely impacted by the bill's provisions. 

   This bill would provide that its provisions shall become
inoperative  during specified periods  if the
federal Centers for Medicare and Medicaid Services deny approval for,
or do not approve before January 1, 2012, the implementation of the
supplemental payment or the coverage dividend fee  during
those periods and the above-described provisions cannot be modified
by the department in order to meet the requirements of federal law or
to obtain federal approval  .
   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
additional legislation has been enacted. If the additional
legislation is not enacted, and  becomes   does
not become  effective, by October 1, 2009, the bill would
provide that its provisions shall be repealed on October 1, 2009, but
if the additional legislation is enacted, and becomes effective, by
October 1, 2009, the bill would provide that its provisions shall be
repealed on  October 1, 2009   January 1, 2013
 .
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

   SECTION 1.    Article 5.21 (commencing with Section
14167.2) 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


   14167.2.  (a) Medi-Cal payments plus supplemental payments made
pursuant to this article for hospital outpatient services furnished
by private hospitals and hospital inpatient services furnished by
private hospitals and nondesignated public hospitals shall equal the
federal upper payment limit for that portion of the 2008-09, 2009-10,
and 2010-11 federal fiscal years for which federal approval of the
supplemental payments described in this article is obtained.
Hospitals shall receive supplemental payments funded by the coverage
dividend fee set forth in Article 5.22 (commencing with Section
14167.32) and available matching federal funds to comply with this
subdivision.
   (b) Designated public hospitals shall be paid direct grants in
support of health care expenditures, which shall be funded by the
coverage dividend fee set forth in Article 5.22 (commencing with
Section 14167.32). The aggregate amount of the grants shall be the
total amount of payments that would be made to designated public
hospitals if the nonfederal component of payments up to the
applicable federal upper payment limit and the payments received by
those hospitals under subdivision (c) was funded by the coverage
dividend fee set forth in Article 5.22 (commencing with Section
14167.32), less the amount of those fees that would have been paid by
the designated public hospitals if the hospitals were required to
pay the fee.
   (c) Medi-Cal managed care health plans shall receive supplemental
payments to the extent available from the funds generated by the
coverage dividend fee, including matching federal funds. The Medi-Cal
managed care health plans shall pay all of the supplemental payments
to hospitals in the form of increased payments for hospital
services.
   14167.3.  (a) The director shall do all of the following:
   (1) Submit any Medicaid state plan amendment that may be necessary
to implement this article.
   (2) Seek federal approval for the use of the entire federal upper
payment limit.
   (3) Seek all federal approvals, waivers, waiver modifications, and
any other federal action as may be necessary to implement and obtain
federal financial participation to the maximum extent possible.
   (b) Supplemental payments for some or all of the 2008-09 federal
fiscal year shall not be made until the director executes a
declaration, which shall be submitted to the Legislature, that
contains the following statements:
   (1) Based on assurances from the Secretary of the United States
Department of Health and Human Services, the maximum federal funds
available annually pursuant to the Special Terms and Conditions, as
amended October 5, 2007, of California's Medi-Cal Hospital/Uninsured
Care Section 1115 Waiver Demonstration, shall not be reduced.
   (2) Taking into account all relevant information available from
the federal government, there is no reasonable basis on which to
conclude that implementation of this article will adversely impact
funding that otherwise would be available for Medi-Cal and uninsured
services pursuant to the Medicaid state plan or waiver that will
replace California's Medi-Cal Hospital/Uninsured Care Section 1115
Waiver Demonstration in effect on the effective date of this article.

   (c) (1) The director shall negotiate the federal approvals
required to implement this article and Article 5.22 (commencing with
Section 14167.32) for the 2009-10 and 2010-11 federal fiscal years
concurrently with the negotiation of a federal waiver that will
replace California's Medi-Cal Hospital/Uninsured Care Section 1115
Waiver Demonstration in effect on the effective date of this article.

   (2) This article and Article 5.22 (commencing with Section
14167.32) shall not be implemented until the federal government
approves a federal waiver for a demonstration that will replace
California's Medi-Cal Hospital/Uninsured Care Section 1115 Waiver
Demonstration in effect on the effective date of this article.
   (d) This article 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 this article or
Article 5.22 (commencing with Section 14167.32).
   14167.4.  (a) It is the intent of the Legislature to enact
additional legislation that will specify more precisely the
calculation of the supplemental payments to hospitals and to Medi-Cal
managed care health plans under this article.
   (b) No supplemental payments shall be made pursuant to this
article until the legislation described in subdivision (a) has been
enacted.
   14167.5.  (a) If the legislation described in subdivision (a) of
Section 14167.4 is not enacted, and does not become effective, by
October 1, 2009, this article shall remain in effect only until
October 1, 2009, and as of that date is repealed.
   (b) If the legislation described in subdivision (a) of Section
14167.4 is enacted, and becomes effective, by October 1, 2009, this
article shall remain in effect only until January 1, 2013, and as of
that date is repealed. 
   SEC. 2.    Article 5.22 (commencing with Section
14167.32) 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


   14167.32.  (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
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 director shall seek, in a timely manner, any and all
federal approvals that may be necessary for the implementation of
each element of this article.
   (d) This article 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 14167.2) or this article.
   (e) No hospital shall be required to pay the coverage dividend fee
to the department until the state receives and maintains federal
approval of the coverage dividend fee and Article 5.21 (commencing
with Section 14167.2) from the federal Centers for Medicare and
Medicaid Services for the period for which the coverage dividend fee
is assessed.
   14167.35.  (a) The funds collected from the fees assessed pursuant
to this article, and any matching federal funds, shall be available
only for the following purposes:
   (1) To provide supplemental payments and grants to hospitals under
subdivisions (a) and (b) of Section 14167.2.
   (2) To provide supplemental payments to Medi-Cal managed care
health plans under subdivision (c) of Section 14167.2.
   (3) To pay for health care coverage for children.
   (4) To pay for the department's staffing costs directly
attributable to implementing Article 5.21 (commencing with Section
14167.2) or this article.
   (b) The amount of the coverage dividend fee that shall be used for
health care coverage for children shall be eighty million dollars
($80,000,000) for each quarter during the 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 14167.2) and this article.
   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.
   14167.39.  (a) If the legislation described in subdivision (a) of
Section 14167.38 is not enacted, and does not become effective, by
October 1, 2009, this article shall remain in effect only until
October 1, 2009, and as of that date is repealed.
   (b) If the legislation described in subdivision (a) of Section
14167.38 is enacted, and becomes effective, by October 1, 2009, this
article shall remain in effect only until January 1, 2013, and as of
that date is repealed.  
  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) "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.
   (b) "Designated public hospital" shall have the meaning set forth
in subdivision (d) of Section 14166.1.
   (c) "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.
   (d) "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.
   (e) "Phase 1" means the implementation of this article for some or
all of the federal fiscal year ending September 30, 2009.
   (f) "Phase 2" means the implementation of this article for some or
all of the period beginning October 1, 2009, and ending December 31,
2010.
   (g) "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.
   14167.2.  (a) Medi-Cal payments plus supplemental payments made
pursuant to this article for hospital outpatient services furnished
by private hospitals and hospital inpatient services furnished by
private hospitals and nondesignated public hospitals shall equal the
federal upper payment limit for that portion of phase 1 and phase 2
for which federal approval of the supplemental payments described in
this article is obtained. Hospitals shall receive supplemental
payments funded by the coverage dividend fee set forth in Article
5.22 (commencing with Section 14167.31) and available matching
federal funds to comply with this subdivision.
   (b) Designated public hospitals shall be paid direct grants in
support of expenditures incurred under the Medi-Cal program, the
Current Section 1115 Waiver, or any new or replacement waiver. The
aggregate amount of the grants shall be the total amount of payments
that would be made to designated public hospitals if the nonfederal
component of payments up to the applicable federal upper payment
limit and the additional managed care payments received by designated
public hospitals as a consequence of subdivision (c) was funded by
the coverage dividend fee set forth in Article 5.22 (commencing with
Section 14167.31), less the amount of those fees that would have been
paid by the designated public hospitals if the hospitals were
required to pay the fee.
   (c) Medi-Cal managed health care plans shall receive supplemental
payments to the extent available from the funds generated by the
coverage dividend fee, including matching federal funds. The Medi-Cal
managed care health plans shall pay all of the supplemental payments
to hospitals in the form of increased payments for hospital
services. The supplemental payments to hospitals shall not affect the
Medi-Cal managed care payment rates to hospitals apart from the
supplemental payments.
   14167.3.  (a) The director shall submit any Medicaid state plan
amendment that may be necessary to implement this article for phase 1
on or before June 30, 2009, shall seek approval for the use of the
entire federal upper payment limit for the 2008-09 federal fiscal
year, and shall seek all 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 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, and that the
maximum federal funds available annually for the safety net care pool
will be no less than the amount that would be available pursuant to
the Current Section 1115 Waiver Special Terms and Conditions, as
amended October 5, 2007.
   (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.
   (b) Phase 1 shall not be implemented unless both of the following
have occurred:
   (1) Written assurances substantially as described in subdivision
(a) are obtained from the federal government.
   (2) The director executes a declaration, which shall be submitted
to the legislature, stating that, taking into account all relevant
information available from the federal government, there is no
reasonable basis on which to conclude that the implementation of
phase 1 will adversely impact funding that otherwise would be
available for Medi-Cal and uninsured services pursuant to the state
plan or a waiver under Section 1115 of the federal Social Security
Act (42 U.S.C. Sec. 1315) for a demonstration that will replace the
Current Section 1115 Waiver.
   (c) (1) 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.
   (2) 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.
   (3) 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 (42 U.S.C. Sec. 1315) for a demonstration
that will replace the Current Section 1115 Waiver and that is not
adversely impacted by the provisions of this article and Article 5.22
(commencing with Section 14167.31).
   (4) In negotiating the terms of the replacement federal waiver
under Section 1115 of the Social Security Act (42 U.S.C. Sec. 1315),
the department shall explore opportunities for reform of the Medi-Cal
program. Subject to subsequent legislative approval, the department
shall explore program reforms, which may include, but need not be
limited to, strategies to accomplish the following goals:
   (A) Payment system reforms for hospital inpatient and outpatient
care, including incentive-based payments, patient safety protocols,
and quality measurement.
   (B) Improvements in the coordination of care for children,
seniors, and adults with multiple chronic and complex medical
conditions, to reduce the high-cost use of emergency and inpatient
hospital services, including reimbursement for medical homes,
enhanced access to primary and preventive care services, disease
management, and case management programs.
   (C) Improvements in managed care delivery systems, including the
measurement of health plan performance and pay-for-performance
payment methodologies.
   (d) (1) This article shall become inoperative during phase 1 if
both of the following conditions exist:
   (A) The federal Centers for Medicare and Medicaid Services denies
approval for, or does not approve before January 1, 2012, the
implementation of Article 5.22 (commencing with Section 14167.31) or
this article for phase 1.
   (B) Neither article can be modified by the department pursuant to
subdivision (g) of Section 14167.32 in order to meet the requirements
of federal law or to obtain federal approval.
   (2) This article shall become inoperative during phase 2 if both
of the following conditions exist:
   (A) The federal Centers for Medicare and Medicaid Services denies
approval for, or does not approve before January 1, 2012, the
implementation of Article 5.22 (commencing with Section 14167.31) or
this article for phase 2.
   (B) Neither article can be modified by the department pursuant to
subdivision (g) of Section 14167.32 in order to meet the requirements
of federal law or to obtain federal approval.
   14167.4.  (a) It is the intent of the Legislature to enact
additional legislation that will specify more precisely the
calculation of the supplemental payments to hospitals and to Medi-Cal
managed health care plans under this article.
   (b) No supplemental payments shall be made pursuant to this
article until the legislation described in subdivision (a) has been
enacted.
   14167.5.  (a) If the legislation described in subdivision (a) of
Section 14167.4 is not enacted, and becomes effective, by October 1,
2009, this article shall remain in effect only until October 1, 2009,
and as of that date is repealed.
   (b) If the legislation described in subdivision (a) of Section
14167.4 is enacted, and becomes effective, by October 1, 2009, this
article shall remain in effect only until January 1, 2013, and as of
that date is repealed. 
  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, the following definitions
shall apply:
   (a) "Phase 1" means the implementation of this article for some or
all of the federal fiscal year ending September 30, 2009.
   (b) "Phase 2" means the implementation of this article for some or
all of the period beginning October 1, 2009, and ending 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
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) 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.
   (d) The director shall seek, in a timely manner, any and all
federal approvals that may be necessary for the implementation of
each element of this article. The department may separately seek
approval for phase 1 and for phase 2.
   (e) (1) This article shall become inoperative during phase 1 if
both of the following conditions exist:
   (A) 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.
   (B) Neither article can be modified by the department pursuant to
subdivision (g) in order to meet the requirements of federal law or
to obtain federal approval.
   (2) This article shall become inoperative during phase 2 if both
of the following conditions exist:
   (A) 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.
   (B) Neither article can be modified by the department pursuant to
subdivision (g) in order to meet the requirements of federal law or
to obtain federal approval.
   (f) No hospital shall be required to pay the coverage dividend fee
to the department 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.
   (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.
   14167.35.  (a) The funds collected from the fees assessed pursuant
to this article, and any matching federal funds, shall be available
only for the following purposes:
   (1) To provide supplemental payments and grants to hospitals under
subdivisions (a) and (b) of section 14167.2.
   (2) To provide supplemental payments to Medi-Cal managed care
health plans under subdivision (c) of Section 14167.2.
   (3) To pay for health care coverage for children.
   (4) To pay for the department's staffing costs directly
attributable to implementing Article 5.21 (commencing with Section
14167.1) or this article.
   (b) The amount of the coverage dividend fee that shall be used for
health care coverage for children 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.
   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.
   14167.39.  (a) If the legislation described in subdivision (a) of
Section 14167.38 is not enacted, and becomes effective, by October 1,
2009, this article shall remain in effect only until October 1,
2009, and as of that date is repealed.
   (b) If the legislation described in subdivision (a) of Section
14167.38 is enacted, and becomes effective, by October 1, 2009, this
article shall remain in effect only until January 1, 2013, and as of
that date is repealed. 
  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 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.
                                         ____ CORRECTIONS
Text--Pages 14 and 15.
               ____