BILL NUMBER: SB 1409 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Price
FEBRUARY 19, 2010
An act to amend Section 14166.12 of the Welfare and Institutions
Code, relating to Medi-Cal, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 1409, as introduced, Price. Medi-Cal: hospital demonstration
project funding: County of Los Angeles.
Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services and
under which qualified low-income persons receive health care
benefits. The Medi-Cal program is, in part, governed and funded by
federal Medicaid provisions.
Existing law establishes the Medi-Cal Hospital/Uninsured Care
Demonstration Project Act, which revises hospital reimbursement
methodologies under the Medi-Cal program in order to maximize the use
of federal funds consistent with federal Medicaid law and stabilize
the distribution of funding for hospitals that provide care to
Medi-Cal beneficiaries and uninsured patients. This demonstration
project provides for funding, in supplementation of Medi-Cal
reimbursement, to various hospitals, including designated public
hospitals, nondesignated public hospitals, and private hospitals, as
defined, in accordance with certain provisions relating to
disproportionate share hospitals.
Existing law establishes the continuously appropriated Private
Hospital Supplemental Fund, and allows the California Medical
Assistance Commission to distribute certain amounts from the fund to
private hospitals that satisfy specified criteria.
Existing law requires the County of Los Angeles to, for the
2007-08, 2008-09, and 2009-10 project years, make intergovernmental
transfers to the state to fund the nonfederal share of increased
Medi-Cal payments to those private hospitals that serve the South Los
Angeles population formerly served by Los Angeles County Martin
Luther King, Jr. - Harbor Hospital. Existing law requires the
intergovernmental transfers to be funded by county tax revenues and
to total $5,000,000 per project year, subject to specified
exceptions. Existing law requires these moneys to be deposited in the
Private Hospital Supplemental Fund, thus constituting an
appropriation, and distributed to the private hospitals designated by
the county.
This bill would additionally require the County of Los Angeles to
make intergovernmental transfers to the state to fund the nonfederal
share of increased Medi-Cal payments to those private hospitals that
serve the South Los Angeles population formerly served by Los Angeles
County Martin Luther King, Jr. - Harbor Hospital for the 2010-11,
2011-12, and 2012-13 project years in accordance with the
above-described provisions, thereby constituting an appropriation.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 14166.12 of the Welfare and Institutions Code
is amended to read:
14166.12. (a) The California Medical Assistance Commission shall
negotiate payment amounts, in accordance with the selective provider
contracting program established pursuant to Article 2.6 (commencing
with Section 14081), from the Private Hospital Supplemental Fund
established pursuant to subdivision (b) for distribution to private
hospitals that satisfy the criteria of Section 14085.6, 14085.7,
14085.8, or 14085.9.
(b) The Private Hospital Supplemental Fund is hereby established
in the State Treasury. For purposes of this section, "fund" means the
Private Hospital Supplemental Fund.
(c) Notwithstanding Section 13340 of the Government Code, the fund
shall be continuously appropriated to the department for the
purposes specified in this section.
(d) Except as otherwise limited by this section, the fund shall
consist of all of the following:
(1) One hundred eighteen million four hundred thousand dollars
($118,400,000), which shall be transferred annually from General Fund
amounts appropriated in the annual Budget Act for the Medi-Cal
program, except that for the 2008-09 fiscal year, this amount shall
be reduced by thirteen million six hundred thousand dollars
($13,600,000) and by an amount equal to one-half of the difference
between eighteen million three hundred thousand dollars ($18,300,000)
and the amount of any reduction in the additional payments for
distressed hospitals calculated pursuant to subparagraph (B) of
paragraph (3) of subdivision (b) of Section 14166.20.
(2) Any additional moneys appropriated to the fund.
(3) All stabilization funding transferred to the fund pursuant to
paragraph (2) of subdivision (a) of Section 14166.14.
(4) Any moneys that any county, other political subdivision of the
state, or other governmental entity in the state may elect to
transfer to the department for deposit into the fund, as permitted
under Section 433.51 of Title 42 of the Code of Federal Regulations
or any other applicable federal Medicaid laws.
(5) All private moneys donated by private individuals or entities
to the department for deposit in the fund as permitted under
applicable federal Medicaid laws.
(6) Any interest that accrues on amounts in the fund.
(e) Any public agency transferring moneys to the fund may, for
that purpose, utilize any revenues, grants, or allocations received
from the state for health care programs or purposes, unless otherwise
prohibited by law. A public agency may also utilize its general
funds or any other public moneys or revenues for purposes of
transfers to the fund, unless otherwise prohibited by law.
(f) The department may accept or not accept moneys offered to the
department for deposit in the fund. If the department accepts moneys
pursuant to this section, the department shall obtain federal
financial participation to the full extent permitted by law. With
respect to funds transferred or donated from private individuals or
entities, the department shall accept only those funds that are
certified by the transferring or donating entity that qualify for
federal financial participation under the terms of the Medicaid
Voluntary Contribution and Provider-Specific Tax Amendments of 1991
(Public Law 102-234) or Section 433.51 of Title 42 of the Code of
Federal Regulations, as applicable. The department may return any
funds transferred or donated in error.
(g) Moneys in the fund shall be used as the source for the
nonfederal share of payments to hospitals under this section.
(h) Any funds remaining in the fund at the end of a fiscal year
shall be carried forward for use in the following fiscal year.
(i) Moneys shall be allocated from the fund by the department and
shall be applied to obtain federal financial participation in
accordance with customary Medi-Cal accounting procedures for purposes
of payments under this section. Distributions from the fund shall be
supplemental to any other Medi-Cal reimbursement received by the
hospitals, including amounts that hospitals receive under the
selective provider contracting program (Article 2.6 (commencing with
Section 14081)), and shall not affect provider rates paid under the
selective provider contracting program.
(j) Each private hospital that was a private hospital during the
2002-03 fiscal year, received payments for the 2002-03 fiscal year
from any of the prior supplemental funds, and, during the project
year, satisfies the criteria in Section 14085.6, 14085.7, 14085.8, or
14085.9 to be eligible to negotiate for distributions under any of
those sections, shall receive no less from the Private Hospital
Supplemental Fund for the project year than 100 percent of the amount
the hospital received from the prior supplemental funds for the
2002-03 fiscal year. Each private hospital described in this
subdivision shall be eligible for additional payments from the fund
pursuant to subdivision (k).
(k) All amounts that are in the fund for a project year in excess
of the amount necessary to make the payments under subdivision (j)
shall be available for negotiation by the California Medical
Assistance Commission, along with corresponding federal financial
participation, for supplemental payments to private hospitals, which
for the project year satisfy the criteria under Section 14085.6,
14085.7, 14085.8, or 14085.9 to be eligible to negotiate for
distributions under any of those sections, and paid for services
rendered during the project year pursuant to the selective provider
contracting program established under Article 2.6 (commencing with
Section 14081).
(l) The amount of any stabilization funding transferred to the
fund, or the amount of intergovernmental transfers deposited to the
fund pursuant to subdivision (o), together with the associated
federal reimbursement, with respect to a particular project year,
may, in the discretion of the California Medical Assistance
Commission, be paid for services furnished in the same project year
regardless of when the stabilization funds or intergovernmental
transfer funds, and the associated federal reimbursement, become
available, provided the payment is consistent with other applicable
federal or state law requirements and does not result in a hospital
exceeding any applicable reimbursement limitations.
(m) The department shall pay amounts due to a private hospital
from the fund for a project year, with the exception of stabilization
funding, in up to four installment payments, unless otherwise
provided in the hospital's contract negotiated with the California
Medical Assistance Commission, except that hospitals that are not
described in subdivision (j) shall not receive the first installment
payment. The first payment shall be made as soon as practicable after
the issuance of the tentative disproportionate share hospital list
for the project year, and in no event later than January 1 of the
project year. The second and subsequent payments shall be made after
the issuance of the final disproportionate hospital list for the
project year, and shall be made only to hospitals that are on the
final disproportionate share hospital list for the project year. The
second payment shall be made by February 1 of the project year or as
soon as practicable after the issuance of the final disproportionate
share hospital list for the project year. The third payment, if
scheduled, shall be made by April 1 of the project year. The fourth
payment, if scheduled, shall be made by June 30 of the project year.
This subdivision does not apply to hospitals that are scheduled to
receive payments from the fund because they meet the criteria under
Section 14085.7 and do not meet the criteria under Section 14085.6,
14085.8, or 14085.9, which shall be paid in accordance with the
applicable contract or contract amendment negotiated by the
California Medical Assistance Commission.
(n) The department shall pay stabilization funding transferred to
the fund in amounts negotiated by the California Medical Assistance
Commission and shall pay the scheduled payments in accordance with
the applicable contract or contract amendment.
(o) Payments to private hospitals that are eligible to receive
payments pursuant to Section 14085.6, 14085.7, 14085.8, or 14085.9
may be made using funds transferred from governmental entities to the
state, at the option of the governmental entity. Any payments funded
by intergovernmental transfers shall remain with the private
hospital and shall not be transferred back to any unit of government.
An amount equal to 25 percent of the amount of any intergovernmental
transfer made in the project year that results in a supplemental
payment made for the same project year to a project year private DSH
hospital designated by the governmental entity that made the
intergovernmental transfer shall be deposited in the fund for
distribution as determined by the California Medical Assistance
Commission. An amount equal to 75 percent shall be deposited in the
fund and distributed to the private hospitals designated by the
governmental entity.
(p) A private hospital that receives payment pursuant to this
section for a particular project year shall not submit a notice for
the termination of its participation in the selective provider
contracting program established pursuant to Article 2.6 (commencing
with Section 14081) until the later of the following dates:
(1) On or after December 31 of the next project year.
(2) The date specified in the hospital's contract, if applicable.
(q) (1) For the 2007-08, 2008-09, and 2009-10
, 2010-11, 2011-12, and 2012- 13 project years,
the County of Los Angeles shall make intergovernmental transfers to
the state to fund the nonfederal share of increased Medi-Cal payments
to those private hospitals that serve the South Los Angeles
population formerly served by Los Angeles County Martin Luther King,
Jr.-Harbor Hospital. The intergovernmental transfers required under
this subdivision shall be funded by county tax revenues and shall
total five million dollars ($5,000,000) per project year, except
that, in the event that the director determines that any amount is
due to the County of Los Angeles under the demonstration project for
services rendered during the portion of a project year during which
Los Angeles County Martin Luther King, Jr.-Harbor Hospital was
operational, the amount of intergovernmental transfers required under
this subdivision shall be reduced by a percentage determined by
reducing 100 percent by the percentage reduction in Los Angeles
County Martin Luther King, Jr.-Harbor Hospital's baseline, as
determined under subdivision (c) of Section 14166.5 for that project
year.
(2) Notwithstanding subdivision (o), an amount equal to 100
percent of the county's intergovernmental transfers under this
subdivision shall be deposited in the fund and, within 30 days after
receipt of the intergovernmental transfer, shall be distributed,
together with related federal financial participation, to the private
hospitals designated by the county in the amounts designated by the
county. The director shall disregard amounts received pursuant to
this subdivision in calculating the OBRA 1993 payment limitation, as
defined in paragraph (24) of subdivision (a) of Section 14105.98, for
purposes of determining the amount of disproportionate share
hospital replacement payments due a private hospital under Section
14166.11.