Amended in Assembly April 11, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1288

Introduced by Assembly Member V. Manuel Pérez

February 22, 2013

An act to begin delete amend Sections 14085.7 and 14085.8 of end delete begin insert add Section 2092 to end insert the begin delete Welfare and Institutions end delete begin insert Business and Professions end insert Code, relating to begin delete health, and making an appropriation therefor. end delete begin insert healing arts. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1288, as amended, V. Manuel Pérez. begin delete Medi-Cal: supplemental hospital funding. end delete begin insert Medical Board of California: end insert begin insert licensing: application processing. end insert

Existing begin delete law, operative until June 30, 2013, establishes the Medi-Cal Medical Education Supplemental Payment Fund and the Large Teaching Emphasis Hospital and Children’s Hospital Medi-Cal Medical Education Supplemental Payment Fund. Moneys in those funds are continuously appropriated to the State Department of Health Care Services to make supplemental payments to eligible teaching hospitals to reflect additional costs incurred by those hospitals for services rendered to Medi-Cal beneficiaries. end delete begin insert law, the Medical Practice Act, provides for licensure and regulation of physicians and surgeons by the Medical Board of California. Existing law establishes the California Healthcare Workforce Policy Commission and requires the commission to, among other things, identify specific areas of the state where unmet priority needs for primary care exist. end insert

This bill would begin delete prohibit supplemental payments from those funds to a hospital unless the hospital has demonstrated that it provides primary care, pediatric care, and obstetric and gynecology care to individuals from medically underserved communities. The bill would also extend the operation of these provisions to June 30, 2015, and, by extending the operative period of continuously appropriated funds, would make an appropriation. end delete begin insert require the Medical Board of California to develop a process to give priority review status to the application of an applicant who can demonstrate, as specified, that he or she intends to practice in a medically underserved area or serve a medical underserved population. end insert

Vote:  begin delete ²⁄₃ end delete begin insert majority end insert . Appropriation:  begin delete yes end delete begin insert no end insert . Fiscal committee: yes. State-mandated local program: no.

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 2092 is added to the end insert begin insert Business and
Professions Code end insert begin insert , to read: end insert

begin insert

begin insert 2092. end insert   

(a) The board shall develop a process to give priority
review status to the application of an applicant for a physician
and surgeon’s certificate who can demonstrate that he or she
intends to practice in a medically underserved area or serve a
medically underserved population as defined in Section 128565
of the Health and Safety Code.

(b) An applicant may demonstrate his or her intent to practice
in a medically underserved area or serve a medically underserved
population by providing proper documentation, including, but not
limited to, a letter from the employer indicating that the applicant
has accepted employment and stating the start date.

end insert

begin delete

SECTION 1.  

Section 14085.7 of the Welfare and Institutions
Code is amended to read:

14085.7.  

(a) The Medi-Cal Medical Education Supplemental
Payment Fund is hereby created in the State Treasury.
Notwithstanding Section 13340 of the Government Code, the fund
shall be continuously appropriated to, and under the administrative
control of, the department for the purposes specified in this section.
Except as otherwise limited by this section, the fund shall consist
of all of the following:

(1) All public moneys transferred by public agencies 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.

(2) All private moneys donated by private individuals or entities
to the department for deposit in the fund as permitted under
applicable federal Medicaid laws.

(3) Any amounts appropriated to the fund by the Legislature.

(4) Any interest that accrues on amounts in the fund.

(b) 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.

(c) The department shall have the discretion to 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 matching funds to the full extent
permitted by law. The department shall accept only those funds
that are certified by the transferring or donating entity as qualifying
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, and may return any
funds transferred or donated in error.

(d) Moneys in the fund shall be used as the source for the
nonfederal share of payments to hospitals under this section.
Moneys shall be allocated from the fund by the department and
matched by federal funds in accordance with customary Medi-Cal
accounting procedures for purposes of payments under subdivision
(e). Distributions from the fund shall be supplemental to any other
amounts that hospitals receive under the contracting program.

(e) (1) For purposes of recognizing medical education costs
incurred for services rendered to Medi-Cal beneficiaries, payments
from this fund shall be negotiated between the California Medical
Assistance Commission and hospitals contracting under this article
that meet the definition of university teaching hospitals or major
(nonuniversity) teaching hospitals as set forth on page 51 and as
listed on page 57 of the department’s report dated May 1991,
entitled “Hospital Peer Grouping.” Payments from the fund shall
be used solely for the purposes identified in the contract between
the hospital and the state.

(2) The department shall not make payments from the fund to
a hospital contracting under this article unless the hospital has
demonstrated to the commission’s satisfaction that the hospital
provides primary care, pediatric care, and obstetric and gynecology
care to individuals from medically underserved communities. This
paragraph shall not apply to payments from the fund made under
contracts entered into before the operative date of the act adding
this paragraph.

(f) The state shall be held harmless from any federal
disallowance resulting from this section. A hospital receiving
supplemental reimbursement pursuant to this section shall be liable
for any reduced federal financial participation resulting from the
implementation of this section with respect to that hospital. The
state may recoup any federal disallowance from the hospital.

(g) This section shall become inoperative on June 30, 2015,
and, as of January 1, 2016, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2016,
deletes or extends the dates on which it becomes inoperative and
is repealed.

SEC. 2.  

Section 14085.8 of the Welfare and Institutions Code
is amended to read:

14085.8.  

(a) The Large Teaching Emphasis Hospital and
Children’s Hospital Medi-Cal Medical Education Supplemental
Payment Fund is hereby created in the State Treasury.

(b) Notwithstanding Section 13340 of the Government Code,
the fund shall be continuously appropriated to, and under the
administrative control of, the department for the purposes specified
in this section.

(c) Except as otherwise limited by this section, the fund shall
consist of all of the following:

(1) All public moneys transferred by public agencies 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.

(2) All private moneys donated by private individuals or entities
to the department for deposit in the fund as permitted under
applicable federal Medicaid laws.

(3) Any amounts appropriated to the fund by the Legislature.

(4) Any interest that accrues on amounts in the fund.

(d) 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.

(e) 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
matching funds to the full extent permitted by law. The department
shall accept only those funds that are certified by the transferring
or donating entity as qualifying 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, and may return any funds transferred or donated in
error.

(f) Moneys in the fund shall be used as the source for the
nonfederal share of payments to hospitals under this section.
Moneys shall be allocated from the fund by the department and
matched by federal funds in accordance with customary Medi-Cal
accounting procedures for purposes of payments under subdivision
(g). Distributions from the fund shall be supplemental to any other
amounts that hospitals receive under the contracting program.

(g) (1) For purposes of recognizing medical education costs
incurred for services rendered to Medi-Cal beneficiaries, contracts
for payments from the fund may, at the discretion of the California
Medical Assistance Commission, be negotiated between the
commission and hospitals contracting under this article that are
defined as either of the following:

(A) A large teaching emphasis hospital, as set forth on page 51
and listed on page 57 of the department’s report dated May 1991,
entitled “Hospital Peer Grouping,” and meets the definition of
eligible hospital as defined in paragraph (3) of subdivision (a) of
Section 14105.98.

(B) A children’s hospital pursuant to Section 10727 and meets
the definition of eligible hospital as defined in paragraph (3) of
subdivision (a) of Section 14105.98.

(2) Payments from the fund shall be used solely for the purposes
identified in the contract between the hospital and the state.

(3) The department shall not make payments from the fund to
a hospital contracting under this article unless the hospital has
demonstrated to the commission’s satisfaction that the hospital
provides primary care, pediatric care, and obstetric and gynecology
care to individuals from medically underserved communities. This
paragraph shall not apply to payments from the fund made under
contracts entered into before the operative date of the act adding
this paragraph.

(h) The state shall be held harmless from any federal
disallowance resulting from this section. A hospital receiving
supplemental reimbursement pursuant to this section shall be liable
for any reduced federal financial participation resulting from the
implementation of this section with respect to that hospital. The
state may recoup any federal disallowance from the hospital.

(i) This section shall become inoperative on June 30, 2015, and,
as of January 1, 2016, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2016, deletes or
extends the dates on which it becomes inoperative and is repealed.

end delete