BILL NUMBER: SB 920 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 23, 2012
PASSED THE ASSEMBLY AUGUST 22, 2012
AMENDED IN ASSEMBLY AUGUST 20, 2012
AMENDED IN ASSEMBLY AUGUST 6, 2012
AMENDED IN ASSEMBLY JUNE 27, 2012
AMENDED IN SENATE JANUARY 4, 2012
INTRODUCED BY Senator Hernandez
FEBRUARY 18, 2011
An act to amend Sections 14169.3, 14169.5, 14169.7, 14169.7.5,
14169.11, 14169.16, 14169.17, 14169.18, 14169.31, 14169.32, 14169.33,
14169.41, and 14169.42 of, and to add Section 14166.125 to, the
Welfare and Institutions Code, relating to Medi-Cal, and declaring
the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 920, Hernandez. Medi-Cal: hospitals.
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
services. The Medi-Cal program is, in part, governed and funded by
federal Medicaid Program provisions.
Existing law establishes the continuously appropriated Private
Hospital Supplemental Fund, administered by the California Medical
Assistance Commission, which consists of moneys from various sources
used to fund the nonfederal share of supplemental payments to private
hospitals. Existing law requires that the California Medical
Assistance Commission be dissolved after June 30, 2012, and requires
that, upon dissolution of the commission, all powers, duties, and
responsibilities of the commission be transferred to the Director of
Health Care Services.
This bill, effective the first fiscal year in which reimbursement
is provided to private hospitals under a specified methodology, would
require the Director of Health Care Services to allocate the fund
among eligible private hospitals pursuant to a methodology that is
developed in consultation with the statewide associations
representing children's hospitals and private DSH hospitals and that
ensures, to the extent possible, the hospitals are allocated funding
at the level of payments received for the 2011-12 fiscal year, taking
into consideration applicable eligibility criteria.
Existing law, subject to federal approval, imposes a quality
assurance fee, as specified, on certain general acute care hospitals
for the period of July 1, 2011, through December 31, 2013. Existing
law requires the hospitals to pay the fee in 10 equal installments,
as specified, and requires that the moneys collected from the quality
assurance fee be deposited into the Hospital Quality Assurance
Revenue Fund. Existing law, subject to federal approval, requires
that the moneys in the fund be available, upon appropriation by the
Legislature, only for certain purposes, including, among other
things, making supplemental payments for certain services to private
hospitals, increased capitation payments to Medi-Cal managed care
plans, and increased payments to mental health plans. Existing law
also authorizes designated and nondesignated public hospitals to be
paid direct grants in support of health care expenditures funded by
the quality assurance fee.
Existing law, subject to federal approval of a Medicaid
demonstration project, requires the department to authorize local Low
Income Health Programs (LIHPs), as defined, to provide scheduled
health care services to eligible individuals, which includes the
Medicaid Coverage Expansion (MCE) population, as defined. Existing
law establishes the Low Income Health Program MCE Out-of-Network
Emergency Care Services Fund, which consists of moneys transferred
from governmental entities on a voluntary basis and from the Hospital
Quality Assurance Revenue Fund in specified amounts, to be used by
the department, upon appropriation by the Legislature, to fund the
nonfederal share of supplemental payments made to private hospitals
and nondesignated public hospitals that are outside the LIHP coverage
network for providing emergency and poststabilization services to
the MCE population.
Existing law provides that the provisions governing the various
payments and grants shall become inoperative on September 1, 2013, if
the department has not received federal approval or a specified
letter that indicates likely federal approval on or before September
1, 2013. Existing law also provides that the provisions governing the
various payments and grants shall remain in effect only until July
1, 2014, the date of the last payment of quality assurance fee
payments, or the date of the last payment of specified payments from
the department, whichever is later.
This bill would modify the calculation of the quality assurance
fee and the installment payment provisions, and would make changes to
the calculation of the supplemental amounts paid to private
hospitals for the provision of hospital inpatient services. This bill
would also increase the aggregate amount of the grants to
nondesignated public hospitals for each fiscal year. This bill would
reduce the amount of the proceeds from the quality assurance fee that
would be transferred into the Low Income Health Program MCE
Out-of-Network Emergency Care Services Fund per subject fiscal year
and would delete nondesignated public hospitals as recipients of
moneys from that fund. This bill would authorize the department to
make supplemental payments from that fund directly to the private
hospitals, as an alternative to, and in lieu of, disbursing moneys
from the fund to the LIHPs.
This bill would instead provide that the provisions governing the
various payments and grants shall become inoperative on December 1,
2013, if the department has not received federal approval or the
specified letter indicating likely federal approval. This bill would
extend the operative date of the provisions governing the various
payments and grants to January 1, 2015, and make related changes.
This bill would make other technical, nonsubstantive changes to these
provisions.
This bill would declare that it is to take effect immediately as
an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 14166.125 is added to the Welfare and
Institutions Code, to read:
14166.125. (a) Effective the first fiscal year in which
reimbursement to private hospitals is provided under the
diagnosis-related group methodology established pursuant to Section
14105.28, the director shall allocate the Private Hospital
Supplemental Fund among eligible private hospitals pursuant to a
methodology developed in consultation with the statewide associations
representing children's hospitals and private DSH hospitals.
(b) Subject to subdivision (a), for the 2013-14 fiscal year only
as a transition, this methodology shall, to the extent possible,
ensure that each eligible hospital is allocated funding at a
proportionate level of payments it received for the 2011-12 fiscal
year, taking into consideration applicable eligibility criteria and
the amount of funding available in the Private Hospital Supplemental
Fund established in Section 14166.12.
SEC. 2. Section 14169.3 of the Welfare and Institutions Code is
amended to read:
14169.3. (a) Except as provided in Section 14169.19, private
hospitals shall be paid supplemental amounts for the provision of
hospital inpatient services for the program period as set forth in
this section. The supplemental amounts shall be in addition to any
other amounts payable to hospitals with respect to those services and
shall not affect any other payments to hospitals. The supplemental
amounts shall result in payments equal to the statewide aggregate
upper payment limit for private hospitals for each subject fiscal
year as it may be modified pursuant to Section 14169.19.
(b) Except as set forth in subdivisions (g) and (h), each private
hospital shall be paid the following amounts as applicable for the
provision of hospital inpatient services for each subject fiscal
year:
(1) Nine hundred seventy-four dollars and ten cents ($974.10)
multiplied by the hospital's general acute care days for supplemental
payments for the 2011-12 subject fiscal year, one thousand
eighty-nine dollars and ninety-two cents ($1,089.92) multiplied by
the hospital's general acute care days for supplemental payments for
the 2012-13 subject fiscal year, and one thousand two hundred
sixty-four dollars and six cents ($1,264.06) multiplied by the
hospital's general acute care days for supplemental payments for the
2013-14 subject fiscal year, divided by two.
(2) For the hospital's acute psychiatric days that were paid
directly by the department and were not the financial responsibility
of a mental health plan, six hundred ninety-five dollars ($695)
multiplied by the hospital's acute psychiatric days for supplemental
payments for the 2011-12 subject fiscal year, seven hundred ninety
dollars ($790) multiplied by the hospital's acute psychiatric days
for supplemental payments for the 2012-13 subject fiscal year, and
nine hundred fifty-five dollars ($955) multiplied by the hospital's
acute psychiatric days for supplemental payments for the 2013-14
subject fiscal year, divided by two.
(3) (A) For the 2011-12 and 2012-13 subject fiscal years, one
thousand three hundred fifty dollars ($1,350) multiplied by the
number of the hospital's high acuity days if the hospital's Medicaid
inpatient utilization rate is less than 41.6 percent and greater than
5 percent and at least 5 percent of the hospital's general acute
care days are high acuity days.
(B) For the 2013-14 subject fiscal year, one thousand three
hundred fifty dollars ($1,350) multiplied by the number of the
hospital's high acuity days, divided by two, if the hospital's
Medicaid inpatient utilization rate is less than 41.6 percent and
greater than 5 percent and at least 5 percent of the hospital's
general acute care days are high acuity days.
(C) The amount under this paragraph shall be in addition to the
amounts specified in paragraphs (1) and (2).
(4) (A) For the 2011-12 and 2012-13 subject fiscal years, one
thousand three hundred fifty dollars ($1,350) multiplied by the
number of the hospital's high acuity days if the hospital qualifies
to receive the amount set forth in paragraph (3) and has been
designated as a Level I, Level II, Adult/Ped Level I, or Adult/Ped
Level II trauma center by the Emergency Medical Services Authority
established pursuant to Section 1797.1 of the Health and Safety Code.
(B) For the 2013-14 subject fiscal year, one thousand three
hundred fifty dollars ($1,350) multiplied by the number of the
hospital's high acuity days, divided by two, if the hospital
qualifies to receive the amount set forth in paragraph (3) and has
been designated as a Level I, Level II, Adult/Ped Level I, or
Adult/Ped Level II trauma center by the Emergency Medical Services
Authority established pursuant to Section 1797.1 of the Health and
Safety Code.
(C) The amount under this paragraph shall be in addition to the
amounts specified in paragraphs (1), (2), and (3).
(c) A private hospital that provided Medi-Cal subacute services
during the 2009 calendar year and has a Medicaid inpatient
utilization rate that is greater than 5 percent and less than 41.6
percent shall be paid a supplemental amount during each subject
fiscal year equal to 40 percent of the Medi-Cal subacute payments
paid by the department to the hospital during the 2009 calendar year,
as reflected in the state paid claims file prepared by the
department on July 14, 2011, except for the 2013-14 subject fiscal
year during which the supplemental amount shall be equal to 20
percent of the Medi-Cal subacute payments paid by the department to
the hospital during the 2009 calendar year, as reflected in the state
paid claims file prepared by the department on July 14, 2011.
(d) (1) In the event federal financial participation for a subject
fiscal year is not available for all of the supplemental amounts
payable to private hospitals under subdivision (b) due to the
application of a federal upper payment limit or for any other reason,
both of the following shall apply:
(A) The total amount payable to private hospitals under
subdivision (b) for the subject fiscal year shall be reduced to
reflect the amount for which federal financial participation is
available.
(B) The amount payable under subdivision (b) to each private
hospital for the subject fiscal year shall be equal to the amount
computed under subdivision (b) multiplied by the ratio of the total
amount for which federal financial participation is available to the
total amount computed under subdivision (b).
(2) In the event federal financial participation for a subject
fiscal year is not available for all of the supplemental amounts
payable to private hospitals under subdivision (c) due to the
application of a federal upper payment limit or for any other reason,
both of the following shall apply:
(A) The total amount payable to private hospitals under
subdivision (c) for the subject fiscal year shall be reduced to
reflect the amount for which federal financial participation is
available.
(B) The amount payable under subdivision (c) to each private
hospital for the subject fiscal year shall be equal to the amount
computed under subdivision (c) multiplied by the ratio of the total
amount for which federal financial participation is available to the
total amount computed under subdivision (c).
(e) If the amount otherwise payable to a hospital under this
section for a subject fiscal year exceeds the amount for which
federal financial participation is available for that hospital, the
amount due to the hospital for that subject fiscal year shall be
reduced to the amount for which federal financial participation is
available.
(f) The amounts set forth in this section are inclusive of federal
financial participation.
(g) Payments shall not be made under this section to a new
hospital.
(h) Payments shall not be made under this section to a converted
hospital.
(i) (1) The department shall increase payments to mental health
plans for the program period exclusively for the purpose of making
payments to private hospitals. The aggregate amount of the increased
payments for a subject fiscal quarter shall be the total of the
individual hospital acute psychiatric supplemental payment amounts
for all hospitals for which federal financial participation is
available.
(2) The payments described in paragraph (1) may be made directly
by the department to hospitals when federal law does not require that
the payments be transmitted to hospitals via mental health plans.
SEC. 3. Section 14169.5 of the Welfare and Institutions Code is
amended to read:
14169.5. (a) The department shall increase capitation payments to
Medi-Cal managed health care plans for each subject fiscal year as
set forth in this section.
(b) The increased capitation payments shall be made as part of the
monthly capitated payments made by the department to managed health
care plans.
(c) The aggregate amount of increased capitation payments to all
Medi-Cal managed health care plans for each subject fiscal year shall
be the maximum amount for which federal financial participation is
available on an aggregate statewide basis for the applicable subject
fiscal year as it may be adjusted pursuant to Section 14169.19.
(d) The department shall determine the amount of the increased
capitation payments for each managed health care plan. The department
shall consider the composition of Medi-Cal enrollees in the plan,
the anticipated utilization of hospital services by the plan's
Medi-Cal enrollees, and other factors that the department determines
are reasonable and appropriate to ensuring access to high-quality
hospital services by the plan's enrollees.
(e) The amount of increased capitation payments to each Medi-Cal
managed health care plan shall not exceed an amount that results in
capitation payments that are certified by the state's actuary as
meeting federal requirements, taking into account the requirement
that all of the increased capitation payments under this section
shall be paid by the Medi-Cal managed health care plans to hospitals
for hospital services to Medi-Cal enrollees of the plan.
(f) (1) The increased capitation payments to managed health care
plans under this section shall be made to support the availability of
hospital services and ensure access to hospital services for
Medi-Cal beneficiaries. The increased capitation payments to managed
health care plans shall commence no later than the later of December
31, 2011, or within 90 days of the date on which all necessary
federal approvals have been received, and shall include, but not be
limited to, the sum of the increased payments for all prior months
for which payments are due.
(2) (A) To secure the necessary funding for the payment or
payments made pursuant to paragraph (1), the department may
accumulate funds in the Hospital Quality Assurance Revenue Fund for
the purpose of funding managed health care capitation payments under
this article regardless of the date on which capitation payments are
scheduled to be paid in order to secure the necessary total funding
for managed health care payments by December 31, 2013.
(B) To the extent feasible, the department shall accumulate funds
under subparagraph (A) by retaining 10 percent of the total necessary
funding from each of the 10 installments of the quality assurance
fee received from hospitals under Article 5.229 (commencing with
Section 14169.31), provided that the department may adjust the
applicable dates and amounts as necessary to accumulate sufficient
funding by December 31, 2013.
(g) Payments to managed health care plans that would be paid
consistent with actuarial certification and enrollment in the absence
of the payments made pursuant to this section, including, but not
limited to, payments described in Section 14182.15, shall not be
reduced as a consequence of payment under this section.
(h) (1) Each managed health care plan shall expend 100 percent of
any increased capitation payments it receives under this section on
hospital services.
(2) The department may issue change orders to amend contracts with
managed health care plans as needed to adjust monthly capitation
payments in order to implement this section.
(3) For entities contracting with the department pursuant to
Article 2.91 (commencing with Section 14089), any incremental
increase in capitation rates pursuant to this section shall not be
subject to negotiation and approval by the California Medical
Assistance Commission.
(i) (1) In the event federal financial participation is not
available for all of the increased capitation payments determined for
a month pursuant to this section for any reason, the increased
capitation payments mandated by this section for that month shall be
reduced proportionately to the amount for which federal financial
participation is available.
(2) The determination under this subdivision for any month in the
program period shall be made after accounting for all federal
financial participation necessary for full implementation of Section
14182.15 for that month.
(j) It is the intent of the Legislature that payments made
available to designated public hospitals under this section shall
replace, to the extent feasible, increased revenues that could be
available to the hospitals under Section 14168.7 in the absence of
this section and assuming other federal funds to the hospitals would
not be reduced as a result of the payments. If this intent cannot be
effectuated under this act, it is the intent of the Legislature to
enact subsequent legislation to accomplish this purpose through other
means.
SEC. 4. Section 14169.7 of the Welfare and Institutions Code, as
amended by Section 99 of Chapter 23 of the Statutes of 2012, is
amended to read:
14169.7. (a) (1) Designated public hospitals shall be paid direct
grants in support of health care expenditures, which shall not
constitute Medi-Cal payments, and which shall be funded by the
quality assurance fee set forth in Article 5.229 (commencing with
Section 14169.31). The aggregate amount of the grants to designated
public hospitals shall be fifty million dollars ($50,000,000) for the
2011-12 fiscal year, forty-three million dollars ($43,000,000) for
the 2012-13 fiscal year, and twenty-one million five hundred thousand
dollars ($21,500,000) for the 2013-14 fiscal year. The director
shall allocate the amounts specified in this paragraph pursuant to
paragraph (2).
(2) For the 2011-12 fiscal year, the director shall allocate the
fifty million dollars ($50,000,000) identified in paragraph (1) among
the designated public hospitals pursuant to a methodology developed
in consultation with the designated public hospitals. For the 2012-13
fiscal year, the director shall allocate the forty-three million
dollars ($43,000,000) identified in paragraph (1) among the
designated public hospitals pursuant to a methodology developed in
consultation with the designated public hospitals. For the 2013-14
fiscal year, the state shall retain the twenty-one million five
hundred thousand dollars ($21,500,000) identified in paragraph (1) to
pay for health care coverage for children in addition to the amounts
identified in Section 14169.33.
(b) Nondesignated public hospitals shall be paid direct grants in
support of health care expenditures, and shall be funded by the
quality assurance fee set forth in Article 5.229 (commencing with
Section 14169.31). The aggregate amount of the grants to
nondesignated public hospitals for each subject fiscal year shall be
eighteen million six hundred thousand dollars ($18,600,000), except
that for the 2013-14 subject fiscal year, the aggregate amount of the
grants shall be nine million three hundred thousand dollars
($9,300,000). The director shall allocate the amounts specified in
this subdivision among the nondesignated public hospitals pursuant to
a methodology developed in consultation with the nondesignated
public hospitals.
SEC. 5. Section 14169.7.5 of the Welfare and Institutions Code, as
amended by Section 100 of Chapter 23 of the Statutes of 2012, is
amended to read:
14169.7.5. (a) The Low Income Health Program MCE Out-of-Network
Emergency Care Services Fund is hereby established in the State
Treasury. The moneys in the fund shall, upon appropriation by the
Legislature to the department, be used solely for the purposes
specified in this section. Notwithstanding Section 16305.7 of the
Government Code, any and all interest and dividends earned on money
in the fund shall be used exclusively for the purposes of this
section.
(b) The fund shall consist of the following:
(1) Funds transferred from governmental entities, at the option of
the governmental entity, to the state for deposit into the fund in
an aggregate amount of twenty million dollars ($20,000,000) per
subject fiscal year, except that for the 2013-14 subject fiscal year,
the aggregate amount of the transfer shall be ten million dollars
($10,000,000).
(2) Proceeds of the quality assurance fee set forth in Article
5.229 (commencing with Section 14169.31) that, subject to paragraph
(1) of subdivision (a) of Section 14169.36, are transferred from the
Hospital Quality Assurance Revenue Fund and deposited into the fund
in an aggregate amount of sixty-six million four hundred thousand
dollars ($66,400,000) per subject fiscal year, except that for the
2013-14 subject fiscal year, the aggregate amount of the proceeds of
the quality assurance fee deposited into the fund shall be
thirty-three million two hundred thousand dollars ($33,200,000).
(c) Any amounts of the quality assurance fee deposited to the fund
in excess of the funds required to implement this section shall be
returned to the Hospital Quality Assurance Revenue Fund.
(d) Any amounts deposited to the fund as described in paragraph
(1) of subdivision (b) that are in excess of the funds required to
implement this section shall be returned to the transferring entity.
(e) Consistent with the Special Terms and Conditions for the
California's Bridge to Reform Section 1115(a) Medicaid Demonstration
(11-W-00193/9), moneys in the fund shall be used with respect to Low
Income Health Programs (LIHPs) operating pursuant to Part 3.6
(commencing with Section 15909) as the source for the nonfederal
share of expenditures for coverage for the Medicaid Coverage
Expansion (MCE) population of medically necessary hospital emergency
services for emergency medical conditions and required
poststabilization care furnished by private hospitals that are
outside the LIHP coverage network, subject to the following:
(1) Moneys in the fund shall only be used to fund the nonfederal
share of supplemental payments made to private hospital
out-of-network emergency care services providers by the LIHP for the
MCE population in accordance with this section.
(2) Supplemental payments under this section shall supplement but
shall not supplant amounts that would have been paid absent the
provisions of this section.
(f) Moneys in the fund shall be allocated with respect to each
subject fiscal year as follows:
(1) Within 60 days after the last day of each subject fiscal year,
each LIHP shall report utilization data to the department on
approved hospital emergency services for emergency medical conditions
and required poststabilization care, in accordance with Paragraph
63.f.ii of the Special Terms and Conditions of California's Bridge to
Reform Section 1115(a) Medicaid Demonstration (11-W-00193/9),
provided to MCE enrollees by out-of-network private hospitals during
that year. The reported data shall be as specified by the department,
and shall include the number of emergency room encounters and the
number of inpatient hospital days.
(2) The department shall, in consultation with the hospital
community, determine the amount of funding for the nonfederal share
of supplemental payments available for each reported emergency room
encounter or inpatient day by dividing the total funds available by
the total number of inpatient days or emergency visits in accordance
with subparagraphs (A) and (B).
(A) Seventy percent of the moneys in the fund shall be allocated
for the nonfederal share of supplemental payments to private
hospitals for approved out-of-network inpatient hospital emergency
and poststabilization care, in accordance with Paragraph 63.f.ii of
the Special Terms and Conditions of California's Bridge to Reform
Section 1115(a) Medicaid Demonstration (11-W-00193/9).
(B) Thirty percent of the available funds shall be allocated for
the nonfederal share of supplemental payments to private hospitals
for approved out-of-network hospital emergency room services
(excluding emergency room visits, in accordance with Paragraph
63.f.ii of the Special Terms and Conditions of California's Bridge to
Reform Section 1115(a) Medicaid Demonstration (11-W-00193/9), that
resulted in an approved out-of-network inpatient hospital stay),
provided that for any emergency room visit that results in a hospital
stay for which a supplemental payment is available under
subparagraph (A), no supplemental payment shall be available under
this subparagraph.
(C) The allocations and total available fund amount shall be
adjusted as necessary so as to be consistent with the requirement in
paragraph (1) of subdivision (g).
(g) (1) The department shall obtain federal financial
participation for moneys in the fund to the full extent permitted by
federal law. Moneys shall be allocated from the fund by the
department to be matched by federal funds in accordance with the
Special Terms and Conditions for the Medicaid Demonstration, or
pursuant to other federal approvals or waivers as necessary.
(2) The department shall disburse moneys from the fund to the
LIHPs in accordance with the calculations in subdivision (f) within
60 days after completing the calculations. The moneys shall be
distributed to the LIHPs solely for purposes of funding the
nonfederal portion of the supplemental out-of-network amounts
determined for each service in subdivision (f) to out-of-network
hospital emergency care services providers.
(3) The LIHPs shall make the supplemental payments described in
paragraph (2) within 30 days of receiving the nonfederal share from
the department.
(h) It is the intent of the Legislature that for each subject
fiscal year, the first twenty million dollars ($20,000,000), or, for
subject fiscal year 2013-14, the first ten million dollars
($10,000,000), of the nonfederal share for the emergency hospital
services payments are funded with intergovernmental transfers
described in paragraph (1) of subdivision (b).
(i) This section shall be implemented only if, and to the extent
that, both of the following conditions exist:
(1) All necessary federal approvals have been obtained for the
implementation of this section and federal financial participation is
available.
(2) The ability of the department to maximize federal funding is
not jeopardized.
(j) In designing and implementing the program for supplemental
payments created under this section, the director shall have
discretion, after consultation with the hospital community and the
LIHPs, to modify timelines and to make modifications to the
operational requirements of this section, but only to the extent
necessary to secure federal approval or to ensure successful
operation of the program and to effectuate the intent of this
section.
(k) Notwithstanding any other provision of this article or Article
5.229 (commencing with Section 14169.31), federal disapproval of the
program developed pursuant to the requirements of this section shall
not affect the implementation of the remainder of this article or
Article 5.229 (commencing with Section 14169.31).
(l) As an alternative to, and in lieu of, disbursing moneys from
the fund to the LIHPs under this section, the department may make
supplemental payments from the fund directly to hospitals as
determined in accordance with subdivision (f) when federal financial
participation is available for those payments.
SEC. 6. Section 14169.11 of the Welfare and Institutions Code is
amended to read:
14169.11. The department shall make disbursements from the
Hospital Quality Assurance Revenue Fund consistent with the
following:
(a) Fund disbursements shall be made periodically within 15 days
of each date on which quality assurance fees are due from hospitals.
(b) The funds shall be disbursed in accordance with the order of
priority set forth in subdivision (b) of Section 14169.33, except
that funds may be set aside for increased capitation payments to
managed care health plans pursuant to subdivision (f) of Section
14169.5.
(c) The funds shall be disbursed in each payment cycle in
accordance with the order of priority set forth in subdivision (b) of
Section 14169.33 as modified by subdivision (b), and so that the
supplemental payments and grants to hospitals, increased capitation
payments to managed health care plans, increased payments to mental
health plans, direct payments to hospitals of acute psychiatric
supplemental payments, and supplemental payments for out-of-network
emergency and poststabilization services for the Low Income Health
Program are made to the maximum extent for which funds are available.
(d) To the maximum extent possible, consistent with the
availability of funds in the quality assurance fund and the timing of
federal approvals, the supplemental payments and grants to
hospitals, increased capitation payments to managed health care
plans, and increased payments to mental health plans under this
article shall be made before December 31, 2013, except that
supplemental payments for out-of-network emergency and
poststabilization services for the Low Income Health Program shall be
made before April 1, 2014.
(e) The aggregate amount of funds to be disbursed to private
hospitals shall be determined under Sections 14169.2 and 14169.3. The
aggregate amount of funds to be disbursed to managed health care
plans shall be determined under Section 14169.5. The aggregate amount
of direct grants to designated and nondesignated public hospitals
shall be determined under Section 14169.7. The aggregate amount of
supplemental payments to be disbursed to private hospitals for
out-of-network and poststabilization services for the Low Income
Health Program shall be determined under Section 14169.7.5.
SEC. 7. Section 14169.16 of the Welfare and Institutions Code is
amended to read:
14169.16. (a) This article shall remain operative only until the
later of the following:
(1) January 1, 2015.
(2) The date of the last payment of the quality assurance fee
payments pursuant to Article 5.229 (commencing Section 14169.31).
(3) The date of the last payment
from the department pursuant to this article.
(b) If this article becomes inoperative under paragraph (1) of
subdivision (a), this article shall be repealed on January 1, 2015,
unless a later enacted statute enacted before that date, deletes or
extends that date.
(c) If this article becomes inoperative under paragraph (2) or (3)
of subdivision (a), this article shall be repealed on January 1 of
the year following the date this article becomes inoperative, unless
a later enacted statute enacted before that date, deletes or extends
that date.
SEC. 8. Section 14169.17 of the Welfare and Institutions Code is
amended to read:
14169.17. Notwithstanding any other provision of law, if federal
approval or a letter that indicates likely federal approval in
accordance with Section 14169.34 has not been received on or before
December 1, 2013, then this article shall become inoperative, and as
of December 1, 2013, is repealed, unless a later enacted statute,
that is enacted before December 1, 2013, deletes or extends that
date.
SEC. 9. Section 14169.18 of the Welfare and Institutions Code is
amended to read:
14169.18. If the director determines that this article has become
inoperative pursuant to Section 14169.13, 14169.16, 14169.17, or
14169.40, the director shall execute a declaration stating that this
determination has been made and stating the basis for this
determination. The director shall retain the declaration and provide
a copy, within five working days of the execution of the declaration,
to the fiscal and appropriate policy committees of the Legislature.
In addition, the director shall post the declaration on the
department's Internet Web site and the director shall send the
declaration to the Secretary of State, the Secretary of the Senate,
the Chief Clerk of the Assembly, and the Legislative Counsel.
SEC. 10. Section 14169.31 of the Welfare and Institutions Code, as
amended by Section 102 of Chapter 23 of the Statutes of 2012, is
amended to read:
14169.31. For the purposes of this article, the following
definitions shall apply:
(a) (1) "Aggregate quality assurance fee" means, with respect to a
hospital that is not a prepaid health plan hospital, the sum of all
of the following:
(A) The annual fee-for-service days for an individual hospital
multiplied by the fee-for-service per diem quality assurance fee
rate.
(B) The annual managed care days for an individual hospital
multiplied by the managed care per diem quality assurance fee rate.
(C) The annual Medi-Cal days for an individual hospital multiplied
by the Medi-Cal per diem quality assurance fee rate.
(2) "Aggregate quality assurance fee" means, with respect to a
hospital that is a prepaid health plan hospital, the sum of all of
the following:
(A) The annual fee-for-service days for an individual hospital
multiplied by the fee-for-service per diem quality assurance fee
rate.
(B) The annual managed care days for an individual hospital
multiplied by the prepaid health plan hospital managed care per diem
quality assurance fee rate.
(C) The annual Medi-Cal managed care days for an individual
hospital multiplied by the prepaid health plan hospital Medi-Cal
managed care per diem quality assurance fee rate.
(D) The annual Medi-Cal fee-for-service days for an individual
hospital multiplied by the Medi-Cal per diem quality assurance fee
rate.
(3) "Aggregate quality assurance fee after the application of the
fee percentage" means the aggregate quality assurance fee multiplied
by the fee percentage for each subject fiscal year.
(b) "Annual fee-for-service days" means the number of
fee-for-service days of each hospital subject to the quality
assurance fee, as reported on the days data source.
(c) "Annual managed care days" means the number of managed care
days of each hospital subject to the quality assurance fee, as
reported on the days data source.
(d) "Annual Medi-Cal days" means the number of Medi-Cal days of
each hospital subject to the quality assurance fee, as reported on
the days data source.
(e) "Converted hospital" shall mean a hospital described in
subdivision (b) of Section 14169.1.
(f) "Days data source" means the hospital's Annual Financial
Disclosure Report filed with the Office of Statewide Health Planning
and Development as of May 5, 2011, for its fiscal year ending during
2009.
(g) "Designated public hospital" shall have the meaning given in
subdivision (d) of Section 14166.1 as of January 1, 2011.
(h) "Exempt facility" means any of the following:
(1) A public hospital, which shall include either of the
following:
(A) A hospital, as defined in paragraph (25) of subdivision (a) of
Section 14105.98.
(B) A tax-exempt nonprofit hospital that is licensed under
subdivision (a) of Section 1250 of the Health and Safety Code and
operating a hospital owned by a local health care district, and is
affiliated with the health care district hospital owner by means of
the district's status as the nonprofit corporation's sole corporate
member.
(2) With the exception of a hospital that is in the Charitable
Research Hospital peer group, as set forth in the 1991 Hospital Peer
Grouping Report published by the department, a hospital that is a
hospital designated as a specialty hospital in the hospital's Office
of Statewide Health Planning and Development Hospital Annual
Financial Disclosure Report for the hospital's fiscal year ending in
the 2009 calendar year.
(3) A hospital that satisfies the Medicare criteria to be a
long-term care hospital.
(4) A small and rural hospital as specified in Section 124840 of
the Health and Safety Code designated as that in the hospital's
Office of Statewide Health Planning and Development Hospital Annual
Financial Disclosure Report for the hospital's fiscal year ending in
the 2009 calendar year.
(i) "Federal approval" means the approval by the federal
government of both the quality assurance fee established pursuant to
this article and the supplemental payments to private hospitals
described in Sections 14169.2 and 14169.3.
(j) (1) "Fee-for-service per diem quality assurance fee rate"
means a fixed daily fee on fee-for-service days.
(2) The fee-for-service per diem quality assurance fee rate shall
be three hundred eight dollars and thirty-six cents ($308.36) per
day.
(3) Upon federal approval or conditional federal approval
described in Section 14169.34, the director shall determine the
fee-for-service per diem quality assurance fee rate based on the
funds required to make the payments specified in Article 5.228
(commencing with Section 14169.1), in consultation with the hospital
community.
(k) "Fee-for-service days" means inpatient hospital days where the
service type is reported as "acute care," "psychiatric care," and
"rehabilitation care," and the payer category is reported as
"Medicare traditional," "county indigent programs-traditional,"
"other third parties-traditional," "other indigent," and "other
payers," for purposes of the Annual Financial Disclosure Report
submitted by hospitals to the Office of Statewide Health Planning and
Development.
(l) "Fee percentage" means a fraction, expressed as a percentage,
the numerator of which is the amount of payments for each subject
fiscal year under Sections 14169.2, 14169.3, 14169.5, and 14169.7.5,
for which federal financial participation is available and the
denominator of which is four billion eight hundred sixty-six million
seven hundred four thousand one hundred fifteen dollars
($4,866,704,115).
(m) "General acute care hospital" means any hospital licensed
pursuant to subdivision (a) of Section 1250 of the Health and Safety
Code.
(n) "Hospital community" means any hospital industry organization
or system that represents hospitals.
(o) "Managed care days" means inpatient hospital days where the
service type is reported as "acute care," "psychiatric care," and
"rehabilitation care," and the payer category is reported as
"Medicare managed care," "county indigent programs-managed care," and
"other third parties-managed care," for purposes of the Annual
Financial Disclosure Report submitted by hospitals to the Office of
Statewide Health Planning and Development.
(p) "Managed care per diem quality assurance fee rate" means a
fixed fee on managed care days of eighty-six dollars and forty cents
($86.40) per day.
(q) "Medi-Cal days" means inpatient hospital days where the
service type is reported as "acute care," "psychiatric care," and
"rehabilitation care," and the payer category is reported as
"Medi-Cal traditional" and "Medi-Cal managed care," for purposes of
the Annual Financial Disclosure Report submitted by hospitals to the
Office of Statewide Health Planning and Development.
(r) "Medi-Cal fee-for-service days" means inpatient hospital days
where the service type is reported as "acute care," "psychiatric
care," and "rehabilitation care," and the payer category is reported
as "Medi-Cal traditional" for purposes of the Annual Financial
Disclosure Report submitted by hospitals to the Office of Statewide
Health Planning and Development.
(s) "Medi-Cal managed care days" means inpatient hospital days as
reported on the days data source where the service type is reported
as "acute care," "psychiatric care," and "rehabilitation care," and
the payer category is reported as "Medi-Cal managed care" for
purposes of the Annual Financial Disclosure Report submitted by
hospitals to the Office of Statewide Health Planning and Development.
(t) "Medi-Cal per diem quality assurance fee rate" means a fixed
fee on Medi-Cal days of three hundred eighty-three dollars and twenty
cents ($383.20) per day.
(u) "New hospital" means a hospital operation, business, or
facility functioning under current or prior ownership as a private
hospital that does not have a days data source or a hospital that has
a days data source in whole, or in part, from a previous operator
where there is an outstanding monetary liability owed to the state in
connection with the Medi-Cal program and the new operator did not
assume liability for the outstanding monetary obligation.
(v) "Nondesignated public hospital" means either of the following:
(1) A public hospital that is licensed under 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 2009, and
satisfies the definition in paragraph (25) of subdivision (a) of
Section 14105.98, excluding designated public hospitals.
(2) A tax-exempt nonprofit hospital that is licensed under
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 2009, is operating a hospital owned by a local health care
district, and is affiliated with the health care district hospital
owner by means of the district's status as the nonprofit corporation'
s sole corporate member.
(w) "Prepaid health plan hospital" means a hospital owned by a
nonprofit public benefit corporation that shares a common board of
directors with a nonprofit health care service plan.
(x) "Prepaid health plan hospital managed care per diem quality
assurance fee rate" means a fixed fee on non-Medi-Cal managed care
days for prepaid health plan hospitals of forty-eight dollars and
thirty-eight cents ($48.38) per day.
(y) "Prepaid health plan hospital Medi-Cal managed care per diem
quality assurance fee rate" means a fixed fee on Medi-Cal managed
care days for prepaid health plan hospitals of two hundred fourteen
dollars and fifty-nine cents ($214.59) per day.
(z) "Prior fiscal year data" means any data taken from sources
that the department determines are the most accurate and reliable at
the time the determination is made, or may be calculated from the
most recent audited data using appropriate update factors. The data
may be from prior fiscal years, current fiscal years, or projections
of future fiscal years.
(aa) "Private hospital" means a hospital that meets all of the
following conditions:
(1) Is licensed pursuant to subdivision (a) of Section 1250 of the
Health and Safety Code.
(2) Is in the Charitable Research Hospital peer group, as set
forth in the 1991 Hospital Peer Grouping Report published by the
department, or is not designated as a specialty hospital in the
hospital's Office of Statewide Health Planning and Development Annual
Financial Disclosure Report for the hospital's latest fiscal year
ending in 2009.
(3) Does not satisfy the Medicare criteria to be classified as a
long-term care hospital.
(4) 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.
(ab) "Program period" means the period from July 1, 2011, to
December 31, 2013, inclusive.
(ac) "Subject fiscal quarter" means a state fiscal quarter during
the program period.
(ad) "Subject fiscal year" means a state fiscal year that ends
after July 1, 2011, and begins before January 1, 2014.
(ae) "Upper payment limit" means a federal upper payment limit on
the amount of the Medicaid payment for which federal financial
participation is available for a class of service and a class of
health care providers, as specified in Part 447 of Title 42 of the
Code of Federal Regulations. The applicable upper payment limit shall
be separately calculated for inpatient and outpatient hospital
services.
SEC. 11. Section 14169.32 of the Welfare and Institutions Code is
amended to read:
14169.32. (a) There shall be imposed on each general acute care
hospital that is not an exempt facility a quality assurance fee,
provided that a quality assurance fee under this article shall not be
imposed on a converted hospital.
(b) The quality assurance fee shall be computed starting on July
1, 2011, and continue through and including December 31, 2013.
(c) Subject to Section 14169.34, upon receipt of federal approval,
the following shall become operative:
(1) Within 10 business days following receipt of the notice of
federal approval from the federal government, the department shall
send notice to each hospital subject to the quality assurance fee,
and publish on its Internet Web site, the following information:
(A) The date that the state received notice of federal approval.
(B) The fee percentage for each subject fiscal year.
(2) The notice to each hospital subject to the quality assurance
fee shall also state the following:
(A) The aggregate quality assurance fee after the application of
the fee percentage for each subject fiscal year.
(B) The aggregate quality assurance fee.
(C) The amount of each payment due from the hospital with respect
to the aggregate quality assurance fee.
(D) The date on which each payment is due.
(3) The hospitals shall pay the aggregate quality assurance fee
after application of the fee percentage for all subject fiscal years
in 10 installments. The department shall establish the date that each
installment is due, provided that the first installment shall be due
no earlier than 20 days following the department sending the notice
pursuant to paragraph (1), and the installments shall be paid at
least one month apart, but if possible, the installments shall be
paid on a quarterly basis.
(4) Notwithstanding any other provision of this section, the
amount of each hospital's aggregate quality assurance fee after the
application of the fee percentage for each subject fiscal year that
has not been paid by the hospital before December 15, 2013, pursuant
to paragraphs (3) and (8), shall be paid by the hospital no later
than December 15, 2013.
(5) (A) Notwithstanding subdivision (l) of Section 14169.31, for
the purpose of determining the installments under paragraph (3), the
department shall use an interim fee percentage as follows:
(i) One hundred percent for subject fiscal year 2011-12 until the
federal government has approved or disapproved additional capitation
payments described in Section 14169.5 for that subject fiscal year.
(ii) One hundred percent for subject fiscal year 2012-13 until the
federal government has approved or disapproved additional capitation
payments described in Section 14169.5 for that subject fiscal year.
(iii) Fifty percent for subject fiscal year 2013-14 until the
federal government has approved or disapproved additional capitation
payments described in Section 14169.5 for that subject fiscal year.
(B) The director may use a lower interim fee percentage for each
subject fiscal year under this paragraph as the director, in his or
her discretion, determines is reasonable in order to generate
sufficient but not excessive installment payments to make the
payments described in subdivision (b) of Section 14169.33.
(6) The director shall determine the final fee percentage for each
subject fiscal year within 15 days of the approval or disapproval,
in whole or in part, by the federal government of all changes to the
capitation rates of managed health care plans requested by the
department to implement Section 14169.5 for that subject fiscal year,
but in no event later than December 1, 2013. At the time the
director determines the final fee percentage for a subject fiscal
year, the director shall also determine the amount of future
installment payments of the quality assurance fee for each hospital
subject to the fee, if any are due. The amount of each future
installment payment shall be established by the director with the
objective that the total of the installment payments of the quality
assurance fee due from a hospital shall equal the director's estimate
for each subject fiscal year for the hospital of the aggregate
quality assurance fee after the application of the fee percentage.
(7) The director, within 15 days of determining the final fee
percentage for a subject fiscal year pursuant to paragraph (6), shall
send notice to each hospital subject to the quality assurance fee of
the following information:
(A) The final fee percentage for each subject fiscal year for
which the final fee percentage has been determined.
(B) The fee percentage determined under paragraph (5) for each
subject fiscal year for which the final fee percentage has not been
determined.
(C) The aggregate quality assurance fee after application of the
fee percentage for each subject fiscal year.
(D) The director's estimate of total quality assurance fee
payments due from the hospital under this article whether or not
paid. This amount shall be the sum of the aggregate quality assurance
fee after application of the fee percentage for each subject fiscal
year using the fee percentages contained in the notice.
(E) The total quality assurance fee payments that the hospital has
made under this article.
(F) The amount, if any, by which the total quality assurance fee
payments due from the hospital under this article as described in
subparagraph (C) exceed the total quality assurance fee payments that
the hospital has made under this article.
(G) The amount of each remaining installment of the quality
assurance fee, if any, due from the hospital and the date each
installment is due. This amount shall be the amount described in
subparagraph (E) divided by the number of installment payments
remaining.
(8) Each hospital that is sent a notice under paragraph (7) shall
pay the additional installments of the quality assurance fee that are
due, if any, in the amounts and at the times set forth in the notice
unless superseded by a subsequent notice from the department.
(9) The department shall refund to a hospital paying the quality
assurance fee the amount, if any, by which the total quality
assurance fee payments that the hospital has made under this article
for all subject fiscal years exceed the total quality assurance fee
payments due from the hospital under this article within 30 days of
the date on which the notice is sent to the hospital under paragraph
(7).
(d) The quality assurance fee, as paid pursuant to this section,
shall be paid by each hospital subject to the fee to the department
for deposit in the Hospital Quality Assurance Revenue Fund. Deposits
may be accepted at any time and will be credited toward the program
period.
(e) This section shall become inoperative if the federal Centers
for Medicare and Medicaid Services denies approval for, or does not
approve before July 1, 2014, the implementation of the quality
assurance fee pursuant to this article or the supplemental payments
to private hospitals described in Sections 14169.2 and 14169.3, and
either or both provisions cannot be modified by the department
pursuant to subdivision (d) of Section 14169.33 in order to meet the
requirements of federal law or to obtain federal approval.
(f) In no case shall the aggregate fees collected in a federal
fiscal year pursuant to this section, Section 14167.32, and Section
14168.32 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.
(g) (1) Interest shall be assessed on quality assurance fees not
paid on the date due at the greater of 10 percent per annum or the
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 Hospital Quality Assurance Revenue Fund.
(2) In the event that any fee payment is more than 60 days
overdue, a penalty equal to the interest charge described in
paragraph (1) shall be assessed and due for each month for which the
payment is not received after 60 days.
(h) When a hospital fails to pay all or part of the quality
assurance fee on or before the date that payment is due, the
department may immediately begin to deduct the unpaid assessment and
interest from any Medi-Cal payments owed to the hospital, or, in
accordance with Section 12419.5 of the Government Code, from any
other state payments owed to the hospital until the full amount is
recovered. All amounts, except penalties, deducted by the department
under this subdivision shall be deposited in the Hospital Quality
Assurance Revenue Fund. The remedy provided to the department by this
section is in addition to other remedies available under law.
(i) The payment of the quality assurance fee shall not be
considered as an allowable cost for Medi-Cal cost reporting and
reimbursement purposes.
(j) The department shall work in consultation with the hospital
community to implement this article and Article 5.228 (commencing
with Section 14169.1).
(k) This subdivision creates a contractually enforceable promise
on behalf of the state to use the proceeds of the quality assurance
fee, including any federal matching funds, solely and exclusively for
the purposes set forth in this article as they existed on the
effective date of this article, to limit the amount of the proceeds
of the quality assurance fee to be used to pay for the health care
coverage of children to the amounts specified in this article, to
limit any payments for the department's costs of administration to
the amounts set forth in this article on the effective date of this
article, to maintain and continue prior reimbursement levels as set
forth in Section 14169.12 on the effective date of that article, and
to otherwise comply with all its obligations set forth in Article
5.228 (commencing with Section 14169.1) and this article provided
that amendments that arise from, or have as a basis, a decision,
advice, or determination by the federal Centers for Medicare and
Medicaid Services relating to federal approval of the quality
assurance fee or the payments set forth in this article or Article
5.228 (commencing with Section 14169.1) shall control for the
purposes of this subdivision.
(l) (1) Effective January 1, 2014, the rates payable to hospitals
and managed health care plans under Medi-Cal shall be the rates then
payable without the supplemental and increased capitation payments
set forth in Article 5.228 (commencing with Section 14169.1).
(2) The supplemental payments and other payments under Article
5.228 (commencing with Section 14169.1) shall be regarded as quality
assurance payments, the implementation or suspension of which does
not affect a determination of the adequacy of any rates under federal
law.
(m) (1) Subject to paragraph (2), the director may waive any or
all interest and penalties assessed under this article in the event
that the director determines, in his or her sole discretion, that the
hospital has demonstrated that imposition of the full quality
assurance fee on the timelines applicable under this article has a
high likelihood of creating a financial hardship for the hospital or
a significant danger of reducing the provision of needed health care
services.
(2) Waiver of some or all of the interest or penalties under this
subdivision shall be conditioned on the hospital's agreement to make
fee payments, or to have the payments withheld from payments
otherwise due from the Medi-Cal program to the hospital, on a
schedule developed by the department that takes into account the
financial situation of the hospital and the potential impact on
services.
(3) A decision by the director under this subdivision shall not be
subject to judicial review.
(4) If fee payments are remitted to the department after the date
determined by the department to be the final date for calculating the
final supplemental payments under this article and Article 5.228
(commencing with Section 14169.1), the fee payments shall be retained
in the fund for purposes of funding supplemental payments supported
by a hospital quality assurance fee program implemented under
subsequent legislation, provided, however, that if supplemental
payments are not implemented under subsequent legislation, then those
fee payments shall be deposited in the Distressed Hospital Fund.
(5) If during the implementation of this article, fee payments
that were due under Article 5.21 (commencing with Section 14167.1)
and Article 5.22 (commencing with Section 14167.31), or Article 5.226
(commencing with Section 14168.1) and Article 5.227 (commencing with
Section 14168.31), are remitted to the department under a payment
plan or for any other reason, and the final date for calculating the
final supplemental payments under those
articles has passed, then those fee payments shall
be deposited in the fund to support the uses established by this
article.
SEC. 12. Section 14169.33 of the Welfare and Institutions Code, as
amended by Section 104 of Chapter 23 of the Statutes of 2012, is
amended to read:
14169.33. (a) (1) All fees required to be paid to the state
pursuant to this article shall be paid in the form of remittances
payable to the department.
(2) The department shall directly transmit the fee payments to the
Treasurer to be deposited in the Hospital Quality Assurance Revenue
Fund, created pursuant to Section 14167.35. Notwithstanding Section
16305.7 of the Government Code, any interest and dividends earned on
deposits in the fund from the proceeds of the fee assessed pursuant
to this article shall be retained in the fund for purposes specified
in subdivision (b).
(b) Notwithstanding subdivision (c) of Section 14167.35 and
subdivision (b) of Section 14168.33, all funds from the proceeds of
the fee assessed pursuant to this article in the Hospital Quality
Assurance Revenue Fund, together with any interest and dividends
earned on money in the fund, shall, upon appropriation by the
Legislature, continue to be used exclusively to enhance federal
financial participation for hospital services under the Medi-Cal
program, to provide additional reimbursement to, and to support
quality improvement efforts of, hospitals, and to minimize
uncompensated care provided by hospitals to uninsured patients, as
well as to pay for the state's administrative costs and to provide
funding for children's health coverage, in the following order of
priority:
(1) To pay for the department's staffing and administrative costs
directly attributable to implementing Article 5.228 (commencing with
Section 14169.1) and this article, not to exceed two million five
hundred thousand dollars ($2,500,000) for the program period.
(2) To pay for the health care coverage for children in the amount
of eighty-five million dollars ($85,000,000) for each subject fiscal
quarter during the 2011-12 subject fiscal year, in the amount of one
hundred thirty-four million two hundred fifty thousand dollars
($134,250,000) for each subject fiscal quarter during the 2012-13
subject fiscal year, and in the amount of one hundred forty-four
million two hundred fifty thousand dollars ($144,250,000) for each
subject fiscal quarter during the 2013-14 subject fiscal year.
(3) To make increased capitation payments to managed health care
plans pursuant to Article 5.228 (commencing with Section 14169.1).
(4) To reimburse the General Fund for the increase in the overall
compensation to a private hospital that is attributable to its change
in status from contract hospital to noncontract hospital, pursuant
to subdivision (a) of Section 14169.10.
(5) To make increased payments or grants to hospitals pursuant to
Article 5.228 (commencing with Section 14169.1).
(6) To make increased payments to mental health plans pursuant to
Article 5.228 (commencing with Section 14169.1).
(7) To make supplemental payments for out-of-network emergency and
poststabilization services provided by private hospitals to Medicaid
Coverage Expansion enrollees in the Low Income Health Program in the
amount of thirty-three million two hundred thousand dollars
($33,200,000) for each fiscal quarter pursuant to Section 14169.7.5.
(c) Any amounts of the quality assurance fee collected in excess
of the funds required to implement subdivision (b), including any
funds recovered under subdivision (d) of Section 14169.13 or
subdivision (e) of Section 14169.38, shall be refunded to general
acute care hospitals, pro rata with the amount of quality assurance
fee paid by the hospital, subject to the limitations of federal law.
If federal rules prohibit the refund described in this subdivision,
the excess funds shall be deposited in the Distressed Hospital Fund
to be used for the purposes described in Section 14166.23, and shall
be supplemental to and not supplant existing funds.
(d) Any methodology or other provision specified in Article 5.228
(commencing with Section 14169.1) or 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 to obtain federal approval or to enhance the probability
that federal approval can be obtained, provided the modifications do
not violate the spirit and intent of Article 5.228 (commencing with
Section 14169.1) or this article and are not inconsistent with the
conditions of implementation set forth in Section 14169.40.
(e) The department, in consultation with the hospital community,
shall make adjustments, as necessary, to the amounts calculated
pursuant to Section 14169.32 in order to ensure compliance with the
federal requirements set forth in Section 433.68 of Title 42 of the
Code of Federal Regulations or elsewhere in federal law.
(f) The department shall request approval from the federal Centers
for Medicare and Medicaid Services for the implementation of this
article. In making this request, 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 fee requirement, or both, pursuant to paragraphs (1) and (2)
of subdivision (e) of Section 433.68 of Title 42 of the Code of
Federal Regulations.
(g) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement this article or Article 5.228 (commencing
with Section 14169.1) by means of provider bulletins, all plan
letters, or other similar instruction, without taking regulatory
action. The department shall also provide notification to the Joint
Legislative Budget Committee and to the appropriate policy and fiscal
committees of the Legislature within five working days when the
above-described action is taken in order to inform the Legislature
that the action is being implemented.
SEC. 13. Section 14169.41 of the Welfare and Institutions Code is
amended to read:
14169.41. (a) This article shall remain operative only until the
later of the following:
(1) January 1, 2015.
(2) The date of the last payment of the quality assurance fee
payments pursuant to this article.
(3) The date of the last payment from the department pursuant to
Article 5.228 (commencing with Section 14169.1).
(b) If this article becomes inoperative under paragraph (1) of
subdivision (a), this article shall be repealed on January 1, 2015,
unless a later enacted statute enacted before that date, deletes or
extends that date.
(c) If this article becomes inoperative under paragraph (2) or (3)
of subdivision (a), this article shall be repealed on January 1 of
the year following the date this article becomes inoperative, unless
a later enacted statute enacted before that date, deletes or extends
that date.
SEC. 14. Section 14169.42 of the Welfare and Institutions Code is
amended to read:
14169.42. If the director determines that this article has become
inoperative pursuant to Section 14169.37, 14169.38, 14169.40, or
14169.41, the director shall execute a declaration stating that this
determination has been made and stating the basis for this
determination. The director shall retain the declaration and provide
a copy, within five working days of the execution of the declaration,
to the fiscal and appropriate policy committees of the Legislature.
In addition, the director shall post the declaration on the
department's Internet Web site and the director shall send the
declaration to the Secretary of State, the Secretary of the Senate,
the Chief Clerk of the Assembly, and the Legislative Counsel.
SEC. 15. 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 to care at the
earliest possible time, it is necessary that this act take effect
immediately.