Amended in Assembly March 19, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 498

Introduced by Assembly Member Chávez

February 20, 2013

An act to amend Section begin delete 47601 of the Education Code, relating to pupils end delete begin insert 14166.151 of the Welfare and Institutions Code, relating to Medi-Cal end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 498, as amended, Chávez. begin delete Charter schools: operation. end delete begin insert Medi-Cal. end insert

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Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law, subject to federal approval, modifies the inpatient fee-for-service reimbursement methodology for nondesignated public hospitals, as defined, under a specified demonstration project for services on or after July 1, 2012.

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This bill would instead provide that these provisions apply to services provided on or after July 1, 2013.

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The Charter Schools Act of 1992 allows one or more persons seeking to establish a charter school within a school district to circulate a petition to that effect. The act provides for the establishment and operation of a charter school as prescribed. Existing law expresses the Legislature’s intent to provide an opportunity for teachers, parents, pupils, and community members to establish and maintain schools that operate independently from the existing school district structure, as a method to accomplish specified goals.

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This bill would make a nonsubstantive change to the latter provision.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 14166.151 of the end insert begin insert Welfare and Institutions
Code end insert begin insert is amended to read: end insert

14166.151.  

(a) It is the intent of the Legislature to reform the
inpatient fee-for-service reimbursement methodology for
nondesignated public hospitals based on their public structure in
order to provide new opportunities for nondesignated public
hospitals to receive reimbursement under the successor
demonstration project for care provided to the uninsured and to
receive new incentive payments for achievement related to delivery
system reform.

(b) Subject to subdivision (c), beginning with services provided
on or after July 1, begin delete 2012 end delete begin insert 2013 end insert , fee-for-service payments to
nondesignated public hospitals for inpatient services shall be
governed by this subdivision. Each nondesignated public hospital
shall receive as payment for inpatient hospital services provided
to Medi-Cal beneficiaries during any successor demonstration
year, the federal financial participation claimed by the department
based on the hospital’s allowable costs incurred in providing those
services, subject to all of the following:

(1) Nondesignated public hospitals shall comply with the
requirements of Section 14166.152. The payments authorized in
this section shall be subject to audit and a final reconciliation where
an overpayment to the nondesignated public hospital shall result
in a collection of the overpayment and an underpayment to the
nondesignated public hospital shall result in a corrective payment.

(2) (A) Nondesignated public hospitals shall be eligible to
receive safety net care pool payments for uncompensated care
costs to the extent that additional federal funding is made available
pursuant to the Special Terms and Conditions for the safety net
care pool uncompensated care limit of the successor demonstration
project and if they comply with the requirements set forth in
Section 14166.154.

(B) The amount of funds that may be claimed pursuant to
subparagraph (A) shall not exceed the additional federal funding
made available under the safety net care pool for nondesignated
public hospital uncompensated care costs, and shall not reduce the
amounts of federal funding for safety net care pool uncompensated
care costs that would otherwise be made available to designated
public hospitals in the absence of this paragraph, including the
amounts available under the Special Terms and Conditions in effect
as of April 1, 2012, and amounts available pursuant to Section
15916.

(C) (i) Notwithstanding subparagraph (B), if the designated
public hospitals do not have sufficient certified public expenditures
to claim the full amount of federal funding made available to the
designated public hospitals as referenced in subparagraph (B),
including consideration of the potential for the designated public
hospitals to have sufficient certified public expenditures in a
subsequent year, the department may authorize the funding to be
claimed by the nondesignated public hospitals.

(ii) The department may determine whether designated public
hospitals do not have sufficient certified public expenditures to
claim the full amount of federal funding pursuant to clause (i) no
sooner than after the submission of the cost reporting information
required pursuant to Section 14166.8 for the applicable successor
demonstration year.

(iii) If the department makes the determination identified in
clause (ii) based on as-filed cost reporting information submitted
prior to a final audit, the department shall make the determination
in consultation with the designated public hospitals and shall apply
an audit cushion of at least 5 percent to the as-filed cost
information. If the department makes the determination identified
in clause (ii) based on audited cost reporting information, no audit
cushion shall be applied.

(3) (A) Nondesignated public hospitals shall be eligible to
receive delivery system reform incentive pool payments to the
extent additional federal funding is made available for this purpose
under the delivery system reform incentive pool in the successor
demonstration project and if the nondesignated public hospitals
comply with the delivery system reform incentive pool funding
requirements set forth in Section 14166.155.

(B) The amount of funds that may be received shall not exceed
the additional federal funding made available for delivery system
reform incentive pool payments to nondesignated public hospitals,
and shall not reduce the amounts that would otherwise be made
available to designated public hospitals in the absence of this
paragraph, including the amounts that designated public hospitals
would be eligible to receive under their delivery system reform
incentive pool plans approved as of January 1, 2012.

(C) Notwithstanding subparagraph (B), if the designated public
hospitals are unable to claim the full amount of federal funding
made available to the designated public hospitals pursuant to
Section 14166.77 and the Special Terms and Conditions, including
through reallocations made pursuant to paragraph (3) of subdivision
(a) of Section 14166.77 as authorized by the Special Terms and
Conditions, and the unused amount of federal funding made
available to the designated public hospitals cannot be used in a
later demonstration year, the department may authorize such
unused funding to be made available to the nondesignated public
hospitals.

(c) (1) (A) The reimbursement methodology developed
pursuant to subdivision (b) shall be effective beginning July 1,
begin delete 2012 end delete begin insert 2013 end insert . If all necessary federal approvals have not been
received by July 1, begin delete 2012 end delete begin insert 2013 end insert , then the effective date shall be
retroactive to July 1, begin delete 2012 end delete begin insert 2013 end insert . Between July 1, begin delete 2012 end delete begin insert 2013 end insert , and
when all necessary federal approvals have been received, any
payments made pursuant to any methodology replaced by
subdivision (b) shall be deemed as interim payments subject to
offsetting and recoupment against payments made under
subdivision (b) pursuant to Section 51047 of Title 22 of the
California Code of Regulations.

(B) Subject to paragraph (2), beginning January 1, 2014, the
reimbursement methodology developed pursuant to subdivision
(b), which shall be in effect July 1, begin delete 2012 end delete begin insert 2013 end insert , through and
including December 31, 2013, shall continue for those
nondesignated public hospitals that certify voluntary participation
as described in clause (i), if the director executes a declaration on
or before December 31, 2013, certifying all of the following:

(i) The governmental entities that own or operate a
nondesignated public hospital, or hospitals, have provided
certifications of voluntary participation in the reimbursement
methodology pursuant to subdivision (b).

(ii) Any necessary federal approvals have been obtained.

(iii) Continuation of the reimbursement methodology for those
nondesignated public hospitals certifying voluntary participation
would be cost beneficial to the state.

(2) On December 31, 2013, if one or more of the nondesignated
public hospitals subject to the reimbursement methodology
described in subdivision (b) have not provided written certification
of voluntariness described in clause (i) of subparagraph (B) of
paragraph (1), or if the director determines, for any reason, that
the reimbursement methodology described in subdivision (b)
cannot be implemented on or after January 1, 2014, then the
director shall execute a declaration certifying that the
reimbursement methodology described in subdivision (b) cannot
continue to be implemented for all or one or more of the
nondesignated public hospitals, in which case subdivision (e) shall
be implemented on January 1, 2014.

(d) Upon implementation of subparagraph (A) of paragraph (1)
of subdivision (c), implementation of the laws and regulations
listed in paragraphs (1) to (4), inclusive, shall be suspended with
respect to fee-for-service payments to all nondesignated public
hospitals for inpatient services through and including December
31, 2013. Implementation of the laws and regulations listed in
paragraphs (1) to (4), inclusive, shall also be suspended with
respect to fee-for-service payments to nondesignated public
hospitals that certify voluntary participation if a declaration is
executed pursuant to subparagraph (B) of paragraph (1) of
subdivision (c), beginning on January 1, 2014, and until the
expiration of the successor demonstration project.

(1) The Nondesignated Public Hospital Medi-Cal Rate
Stabilization Act in Article 5.17 (commencing with Section
14165.55).

(2) The inpatient fee-for-service per diem rate authorized in
Article 2.6 (commencing with Section 14081).

(3) The reimbursement methodology for fee-for-service inpatient
services in Sections 14105 and 14105.15, and Article 7.5
(commencing with Section 51536) of Title 22 of the California
Code of Regulations.

(4) Section 14166.17.

(e) Subject to the conditions in paragraph (2) of subdivision (c),
on January 1, 2014, the percentage of each intergovernmental
transfer amount retained pursuant to subdivision (j) of Section
14165.57 shall be increased to 20 percent to reimburse the
department, or transferred to the General Fund, for the
administrative costs of operating the Nondesignated Public Hospital
Intergovernmental Transfer Program and for the benefit of the
Medi-Cal program.

(f) This section and Sections 14166.152, 14166.153, 14166.154,
and 14166.155 shall become operative on the date all necessary
federal approvals have been obtained to implement all of these
sections.

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SECTION 1.  

Section 47601 of the Education Code is amended
to read:

47601.  

It is the intent of the Legislature, in enacting this part,
to provide an opportunity for teachers, parents, pupils, and
community members to establish and maintain schools that operate
independently from the existing school district structure, as a
method to accomplish all of the following:

(a) Improve pupil learning.

(b) Increase learning opportunities for all pupils, with special
emphasis on expanded learning experiences for pupils who are
identified as academically low achieving.

(c) Encourage the use of different and innovative teaching
methods.

(d) Create new professional opportunities for teachers, including
the opportunity to be responsible for the learning program at the
schoolsite.

(e) Provide parents and pupils with expanded choices in the
types of educational opportunities that are available within the
public school system.

(f) Hold the schools established under this part accountable for
meeting measurable pupil outcomes, and provide the schools with
a method to change from rule-based to performance-based
accountability systems.

(g) Provide vigorous competition within the public school
system to stimulate continual improvements in all public schools.

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