BILL NUMBER: AB 1383 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 15, 2009
AMENDED IN SENATE JULY 9, 2009
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
14167.2) 14167.1) and 5.22 (commencing
with Section 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, pursuant to additional
legislation described below, to pay specified hospitals and Medi-Cal
managed health care plans supplemental amounts for certain hospital
services.
This bill would require the Director of Health Care Services to
promptly seek the federal approvals that may be
necessary to implement the above-described supplemental payment
provisions.
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
also provide that no supplemental payment described above shall be
made until all necessary federal approvals for the payment and the
fee provisions described below have been obtained and the fee has
been imposed and collected.
This bill would provide for the imposition, pursuant to additional
legislation described below, and as a condition of receiving state
funds, of a coverage dividend fee on certain hospitals
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 , as defined
. 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 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.
This bill provides that it is the intent of the Legislature to
enact additional urgency 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 would provide that the additional
urgency legislation shall provide for imposition and for
the calculations in a manner in accordance with a fee assessment. The
bill provides that no supplemental payment shall be paid or coverage
dividend fee made due or payable until the additional urgency
legislation has been enacted. If the additional urgency
legislation is not enacted, and 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 urgency
legislation is enacted, and becomes effective, by October 1, 2009,
the bill would provide that its provisions shall be repealed on
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)
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) "Private hospital" means a 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 a nonpublic hospital, nonpublic-converted
hospital, or converted hospital as those terms are defined
respectively, in paragraphs (26) to (28), inclusive, of subdivision
(a) of Section 14105.98.
14167.2. (a) All Medi-Cal payments plus
, including 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
hospitals, shall equal the portion of the applicable
federal upper payment limit or limits reasonably allocable to the s
pecific category of hospitals or services 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, pursuant to additional
urgency legislation described in Sections 14167.4 and 14167.38,
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, pursuant to additional
urgency legislation described in Sections 14167.4 and
14167.38, 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 of payments up to the portion of the
applicable federal upper payment limit reasonably allocable to the
specific category of hospitals and services 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, pursuant to
additional urgency legislation described in Sections
14167.4 and 14167.38, receive supplemental payments to the extent
available from the funds generated by the coverage dividend fee,
including matching federal funds related
federal reimbursement . 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.
(d) No payment shall be made under this article until all
necessary federal approvals for the payment and for the fee
provisions in Article 5.22 (commencing with Section 14167.32) have
been obtained and the fee has been imposed and collected. Payments
under this article shall be made only to the extent that the fee
established in Article 5.22 (commencing with Section 14167.32) is
collected and available to support the payments and additional
urgency legislation described in Section 14167.4 has been enacted.
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 for the 2008-09 federal fiscal year and fo
r the period beginning October 1, 2009, and ending December 31,
2010 .
(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,
the Current Section 1115 Waiver, 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. that will replace the Current Section 1115
Waiver.
(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. will replace the Current Section 1115 Waiver.
(2) In negotiating the terms of the replacement federal waiver
under Section 1115 of the federal 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.
(2)
(3) 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. the Current Section 1115 Waiver.
(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).
(e) No payment shall be made under this article until all
necessary federal approvals for the payment and for the fee
provisions in Article 5.22 (commencing with Section 14167.32) have
been obtained and the fee has been imposed and collected. Payments
under this article shall be made only to the extent that the fee
established in Article 5.22 (commencing with Section 14167.32) is
collected and available to support the payments and additional
urgency legislation described in Section 14167.4 has been enacted.
14167.4. (a) It is the intent of the Legislature to enact
additional urgency 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. The
additional urgency legislation shall provide for the
calculation of the amount of the supplemental payment to hospitals
and Medi-Cal managed care health plans in a manner that is consistent
with the coverage dividend fee described in Article 5.22 (commencing
with Section 14167.32) being a fee assessment.
(b) No supplemental payments shall be made pursuant to this
article until the urgency legislation described in
subdivision (a) has been enacted.
14167.5. (a) If the urgency 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 urgency 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, pursuant to additional
urgency legislation described in Sections 14167.4 and
14167.38, a coverage dividend fee that is consistent with the
principle of shared benefit and shared responsibility.
(b) The coverage dividend fee shall, as a condition of receipt of
state funds, be assessed, pursuant to additional urgency
legislation described in Sections 14167.4 and 14167.38, 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, 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) 14167.1)
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) 14167.1) 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 and administrative
costs directly attributable to implementing Article 5.21
(commencing with Section 14167.2) 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 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) 14167.1) and this
article.
14167.38. (a) It is the intent of the Legislature to enact
additional urgency legislation that will specify more
precisely the calculation of the amount of the coverage dividend fee
due from individual hospitals under this article. The additional
urgency legislation shall provide for the imposition,
after imposition of the coverage dividend fee,
and shall provide for that imposition, and for the
calculation of the amount of the coverage dividend fee assessed on
each hospital, in a manner in accordance with a fee assessment.
(b) No coverage dividend fee shall be made due or payable pursuant
to this article until the urgency legislation described in
subdivision (a) has been enacted.
14167.39. (a) If the urgency 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 urgency 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.