SB 239, as amended, Hernandez. Medi-Cal: hospital quality assurance fee.
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, imposes a quality assurance fee, as specified, on certain general acute care hospitals from July 1, 2011, through December 31, 2013. Existing law, subject to federal approval, requires the fee to be deposited into the Hospital Quality Assurance Revenue Fund, and requires that the moneys in the fund be used, upon appropriation by the Legislature, only for certain purposes, including, among other things, paying for health care coverage for children and 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.
This bill would state the intent of the Legislature to impose a quality assurance fee to be paid by hospitals, which would be used to increase federal financial participation in order to make supplemental Medi-Cal payments to hospitals for the period of January 1, 2014, through December 31, 2015, and to help pay for health care coverage for low-income children. This bill would require the department to make every effort to obtain the necessary federal approvals to implement the quality assurance fee as described.
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Fiscal committee: begin deleteno end delete.
State-mandated local program: no.
The people of the State of California do enact as follows:
The Legislature finds and declares both of the
3(a) The Legislature continues to recognize the essential role that
4hospitals play in serving the state’s Medi-Cal beneficiaries. To
5that end, it has been, and remains, the intent of the Legislature to
6improve funding for hospitals and obtain all available federal funds
7to make supplemental Medi-Cal payments to hospitals.
8(b) It is the intent of the Legislature that funding provided to
9hospitals through a hospital quality assurance fee be explored with
10the goal of increasing access to care and improving hospital
11reimbursement through supplemental Medi-Cal payments to
(a) It is the intent of the Legislature to impose a quality
2assurance fee to be paid by hospitals, which would be used to
3increase federal financial participation in order to make
4supplemental Medi-Cal payments to hospitals for the period of
5January 1, 2014, through December 31, 2015, and to help pay for
6health care coverage for low-income children.
7(b) The State Department of Health Care Services shall make
8every effort to obtain the necessary federal approvals to implement
9the quality assurance fee described in subdivision (a) in order to
10make supplemental Medi-Cal payments to hospitals for the period
11of January 1, 2014, through December 31, 2015.
12(c) It is the intent of the Legislature that the quality assurance
13fee be implemented only if all of the following conditions are met:
14(1) The quality assurance fee is established in consultation with
15the hospital community.
16(2) The quality assurance fee, including any interest earned after
17collection by the department, is deposited into segregated funds
18apart from the General Fund and used exclusively for supplemental
19Medi-Cal payments to hospitals, health care coverage for
20low-income children, and for the direct costs of administering the
21program by the department.
22(3) No hospital shall be required to pay the quality assurance
23fee to the department unless and until the state receives and
24maintains federal approval of the quality assurance fee and related
25supplemental payments to hospitals.
26(4) The full amount of the quality assurance fee assessed and
27collected remains available only for the purposes specified by the
28Legislature in this act.
(a) The Hospital Quality Assurance Revenue Fund
32is hereby created in the State Treasury.
33(b) (1) All fees required to be paid to the state pursuant to this
34article shall be paid in the form of remittances payable to the
36(2) The department shall directly transmit the fee payments to
37the Treasurer to be deposited in the Hospital Quality Assurance
38Revenue Fund. Notwithstanding Section 16305.7 of the
39Government Code, any interest and dividends earned on deposits
P4 1in the fund shall be retained in the fund for purposes specified in
3(c) All funds in the Hospital Quality Assurance Revenue
4together with any interest and dividends earned on money in the
5fund, shall, upon appropriation by the Legislature, be used
6exclusively to enhance federal financial participation for hospital
7services under the Medi-Cal program, to provide additional
8reimbursement to, and to support quality improvement efforts of,
9hospitals, and to minimize uncompensated care provided by
10hospitals to uninsured patients, in the following order of priority:
11(1) To pay for the department’s staffing and administrative costs
12directly attributable to implementing Article 5.21 (commencing
13with Section 14167.1) and this article, including any administrative
14fees that the director determines shall be paid to mental health
15plans pursuant to subdivision (d) of Section 14167.11 and
16repayment of the loan made to the department from the Private
17Hospital Supplemental Fund pursuant to the act that added this
19(2) To pay for the health care coverage for children in the
20amount of eighty million dollars ($80,000,000) for each subject
21fiscal quarter for which payments are made under Article 5.21
22(commencing with Section 14167.1).
23(3) To make increased capitation payments to managed health
24care plans pursuant to Article 5.21 (commencing with Section
26(4) To pay funds from the Hospital Quality Assurance Revenue
27Fund pursuant to Section 14167.5 that would have been used for
28grant payments and that are retained by the state, and to make
29increased payments to hospitals, including grants, pursuant to
30Article 5.21 (commencing with Section 14167.1), both of which
31shall be of equal priority.
32(5) To make increased payments to mental health plans pursuant
33to Article 5.21 (commencing with Section 14167.1).
34(d) Any amounts of the quality assurance fee collected in excess
35of the funds required to implement subdivision (c), including any
36funds recovered under subdivision (d) of Section 14167.14 or
37subdivision (e) of Section 14167.36, shall be refunded to general
38acute care hospitals, pro rata with the amount of quality assurance
39fee paid by the hospital, subject to the limitations of federal law.
40If federal rules prohibit the refund described in this subdivision,
P5 1the excess funds shall be deposited in the Distressed Hospital Fund
2to be used for the purposes described in Section 14166.23, and
3shall be supplemental to and not supplant existing funds.
4(e) Any methodology or other provision specified in Article
55.21 (commencing with Section 14167.1) and this article may be
6modified by the department, in consultation with the hospital
7community, to the extent necessary to meet the requirements of
8federal law or regulations to obtain federal approval or to enhance
9the probability that federal approval can be obtained, provided the
10modifications do not violate the spirit and intent of Article 5.21
11(commencing with Section 14167.1) or this article and are not
12inconsistent with the conditions of implementation set forth in
14(f) The department, in consultation with the hospital community,
15shall make adjustments, as necessary, to the amounts calculated
16pursuant to Section 14167.32 in order to ensure compliance with
17the federal requirements set forth in Section 433.68 of Title 42 of
18the Code of Federal Regulations or elsewhere in federal law.
19(g) The department shall request approval from the federal
20Centers for Medicare and Medicaid Services for the implementation
21of this article. In making this request, the department shall seek
22specific approval from the federal Centers for Medicare and
23Medicaid Services to exempt providers identified in this article as
24exempt from the fees specified, including the submission, as may
25be necessary, of a request for waiver of the broad based
26requirement, waiver of the uniform fee requirement, or both,
27pursuant to paragraphs (e)(1) and (e)(2) of Section 433.68 of Title
2842 of the Code of Federal Regulations.
29(h) (1) For purposes of this section, a modification pursuant to
30this section shall be implemented only if the modification, change,
31or adjustment does not do either of the following:
32(A) Reduces or increases the supplemental payments or grants
33made under Article 5.21 (commencing with Section 14167.1) in
34the aggregate for the 2008-09, 2009-10, and 2010-11 federal
35fiscal years to a hospital by more than 2 percent of the amount that
36would be determined under this article without any change or
38(B) Reduces or increases the amount of the fee payable by a
39hospital in total under this article for the 2008-09, 2009-10, and
402010-11 federal fiscal years by more than 2 percent of the amount
P6 1that would be determined under this article without any change or
3(2) The department shall provide the Joint Legislative Budget
4Committee and the fiscal and appropriate policy committees of
5the Legislature a status update of the implementation of Article
65.21 (commencing with Section 14167.1) and this article on
7January 1, 2010, and quarterly thereafter. Information on any
8adjustments or modifications to the provisions of this article or
9Article 5.21 (commencing with Section 14167.1) that may be
10required for federal approval shall be provided coincident with the
11consultation required under subdivisions (f) and (g).
12(i) Notwithstanding Chapter 3.5 (commencing with Section
1311340) of Part 1 of Division 3 of Title 2 of the Government Code,
14the department may implement this article or Article 5.21
15(commencing with Section 14167.1) by means of provider
16bulletins, all plan letters, or other similar instruction, without taking
17regulatory action. The department shall also provide notification
18to the Joint Legislative Budget Committee and to the appropriate
19policy and fiscal committees of the Legislature within five working
20days when the above-described action is taken in order to inform
21the Legislature that the action is being implemented.
22(j) Notwithstanding any law, the Controller may use the funds
23in the Hospital Quality Assurance Revenue Fund for cashflow
24loans to the General Fund as provided in Sections 16310 and 16381
25of the Government Code.
26(k) Notwithstanding Sections 14167.17 and 14167.40,
27subdivisions (b) to (h), inclusive, shall become inoperative on
28January 1, 2013, subdivisions (a), (i), and (j) shall remain operative
29until January 1,
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30section is repealed.