as amended, Hernandez. Medi-Cal:
begin delete hospitalend delete 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.end delete
This bill would, subject to federal approval, impose a hospital quality assurance fee, as specified, on certain general acute care hospitals from January 1, 2014, through December
begin delete 30end delete, 2015, to be deposited into the Hospital Quality Assurance Revenue Fund. begin delete This bill would, subject to federal approval, impose a hospital quality assurance
fee, as specified, on certain general acute care hospitals from January 1, 2014, through December 30, 2015, to be deposited into the Hospital Quality Assurance Revenue Fund. The bill would, subject to federal approval, require supplemental payments to be made to private hospitals for certain services and increased capitation payments to be made to Medi-Cal managed care plans, as specified. The bill would also make conforming changes.end delete
This bill would declare that it is to take effect immediately as an urgency statute.
begin deleteno end delete.
Fiscal committee: yes.
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
14assurance fee to be paid by hospitals, which would be used to
15increase federal financial participation in order to make
16supplemental Medi-Cal payments to hospitals for the period of
17January 1, 2014, through December 31, 2015, and to help pay for
18health care coverage for low-income children.
19(b) The State Department of Health Care Services shall make
20every effort to obtain the necessary federal approvals to implement
21the quality assurance fee described in subdivision (a) in order to
22make supplemental Medi-Cal payments to hospitals for the period
23of January 1, 2014, through December 31, 2015.
24(c) It is the intent of the Legislature that the quality assurance
25fee be implemented only if all of the following conditions are met:
P5 1(1) The quality assurance fee is established in consultation with
2the hospital community.
3(2) The quality assurance fee, including any interest earned after
4collection by the department, is deposited into segregated funds
5apart from the General Fund and used exclusively for supplemental
6Medi-Cal payments to hospitals,
7 health care coverage for low-income children, and for the direct
8costs of administering the program by the department.
9(3) No hospital shall be required to pay the quality assurance
10fee to the department unless and until the state receives and
11maintains federal approval of the quality assurance fee and related
12supplemental payments to hospitals.
13(4) The full amount of the quality assurance fee assessed and
14collected remains available only for the purposes specified by the
15Legislature in this act.
In addition to the required intergovernmental
19transfers set forth in Section 14163, any county, other political
20subdivision of the state, or governmental entity in the state may
21elect to transfer funds, subject to subdivision (m) of Section 14163,
22to the department in support of the Medi-Cal program. Those
23transfers may consist of cash or loans to the state. The department
24shall have the discretion to accept or not accept any elective transfer
25from a county, political subdivision, or other governmental entity,
26as well as the discretion of whether to deposit the transfer in the
27Medi-Cal Inpatient Payment Adjustment Fund established pursuant
28to Section 14163. If the department accepts a transfer pursuant to
29this section, the department shall obtain federal matching funds to
30the full extent permitted by federal law.
(a) There is hereby created in the Governor’s office
13the California Medical Assistance Commission, for the purpose
14of contracting with health care delivery systems for the provision
15of health care services to recipients under the California Medical
17(b) Notwithstanding any other
begin delete provision ofend delete law, the commission
18created pursuant to subdivision (a) shall continue through June 30,
192012, after which, it shall be dissolved and the term of any
20commissioner serving at that time shall end.
21(1) Upon dissolution of the commission, all powers, duties, and
22responsibilities of the commission shall be transferred to the
23Director of Health Care Services. These powers, duties, and
24responsibilities shall include, but are not limited to, those exercised
25in the operation of the selective provider contracting program
26pursuant to Article 2.6 (commencing with Section 14081).
27(2) (A) On July 1, 2012, notwithstanding any other law,
28employees of the California Medical Assistance Commission as
29of June 30, 2012, excluding commissioners, shall transfer to the
30State Department of Health Care Services.
31(B) Employees who transfer pursuant to subparagraph (A) shall
32be subject to the same conditions of employment under the
33department as they were under the California Medical Assistance
34Commission, including retention of their exempt status, until the
35diagnosis-related groups payment system described in Section
3614105.28 replaces the contract-based payment system described
37in this article.
38(C) (i) Notwithstanding any other law or rule, persons employed
39by the department who transferred to the department pursuant to
40subparagraph (A) shall be eligible to apply for civil service
P7 1examinations. Persons receiving passing scores shall have their
2names placed on lists resulting from these examinations, or
3otherwise gain eligibility for appointment. In evaluating minimum
4qualifications, related California Medical Assistance Commission
5experience shall be considered state civil service experience in a
6class deemed comparable by the State Personnel Board, based on
7the duties and responsibilities assigned.
8(ii) On the date the diagnosis-related groups payment system
9described in Section 14105.28 replaces the contract-based system
10described in this article, employees who transferred to the
11department pursuant to subparagraph (A) shall transfer to civil
12service classifications within the department for which they are
14(3) Upon a determination by the Director of Health Care
15Services that a payment system based on diagnosis-related groups
16as described in Section 14105.28 that is sufficient to replace the
17contract-based payment system described in this article has been
18developed and implemented, the powers, duties, and responsibilities
19conferred on the commission and transferred to the Director of
20Health Care Services shall no longer be exercised, excluding
begin delete bothend delete
21 of the following:
22(A) Stabilization payments made or committed from Sections
2314166.14 and 14166.19 for services rendered prior to the director’s
24determination pursuant to this paragraph.
25(B) The ability to negotiate and make payments from the Private
26Hospital Supplemental Fund, established pursuant to Section
2714166.12, and the Nondesignated Public Hospital Supplemental
28Fund, established pursuant to Section 14166.17.
afforded to the negotiations and contracts of the
38commission by the California Public Records Act (Chapter 3.5
39(commencing with Section 6250) of Division 7 of Title 1 of the
40Government Code) shall be applicable to the negotiations and
P8 1contracts conducted or entered into pursuant to this section by the
2State Department of Health Care Services.
3(c) Notwithstanding the rulemaking provisions of Chapter 3.5
4(commencing with Section 11340) of Part 1 of Division 3 of Title
52 of the Government Code, or any other provision of law, the State
6Department of Health Care Services may implement and administer
7this section by means of provider bulletins or other similar
8instructions, without taking regulatory action. The authority to
9implement this section as set forth in this subdivision shall include
10the authority to give notice by provider bulletin or other similar
11instruction of a determination made pursuant to paragraph (3) of
12subdivision (b) and to modify or supersede existing regulations in
13Title 22 of the California Code of Regulations that conflict with
14implementation of this section.
Section 14167.35 of the Welfare and Institutions Code
17 is amended to read:
(a) The Hospital Quality Assurance Revenue Fund
19is hereby created in the State Treasury.
20(b) (1) All fees required to be paid to the state pursuant to this
21article shall be paid in the form of remittances payable to the
23(2) The department shall directly transmit the fee payments to
24the Treasurer to be deposited in the Hospital Quality Assurance
25Revenue Fund. Notwithstanding Section 16305.7 of the
26Government Code, any interest and dividends earned on deposits
27in the fund shall be retained in the fund for purposes specified in
29(c) All funds in the Hospital Quality Assurance Revenue Fund,
30together with any interest and dividends earned on money in the
31fund, shall, upon appropriation by the Legislature, be used
32exclusively to enhance federal financial participation for hospital
33services under the Medi-Cal program, to provide additional
34reimbursement to, and to support quality improvement efforts of,
35hospitals, and to minimize uncompensated care provided by
36hospitals to uninsured patients, in the following order of priority:
37(1) To pay for the department’s staffing and administrative costs
38directly attributable to implementing Article 5.21 (commencing
39with Section 14167.1) and this article, including any administrative
40fees that the director determines shall be paid to mental health
P9 1plans pursuant to subdivision (d) of Section 14167.11 and
2repayment of the loan made to the department from the Private
3Hospital Supplemental Fund pursuant to the act that added this
5(2) To pay for the health care coverage for children in the
6amount of eighty million dollars ($80,000,000) for each subject
7fiscal quarter for which payments are made under Article 5.21
8(commencing with Section 14167.1).
9(3) To make increased capitation payments to managed health
10care plans pursuant to Article 5.21 (commencing with Section
12(4) To pay funds from the Hospital Quality Assurance Revenue
13Fund pursuant to Section 14167.5 that would have been used for
14grant payments and that are retained by the state, and to make
15increased payments to hospitals, including grants, pursuant to
16Article 5.21 (commencing with Section 14167.1), both of which
17shall be of equal priority.
18(5) To make increased payments to mental health plans pursuant
19to Article 5.21 (commencing with Section 14167.1).
20(d) Any amounts of the quality assurance fee collected in excess
21of the funds required to implement subdivision (c), including any
22funds recovered under subdivision (d) of Section 14167.14 or
23subdivision (e) of Section 14167.36, shall be refunded to general
24acute care hospitals, pro rata with the amount of quality assurance
25fee paid by the hospital, subject to the limitations of federal law.
26If federal rules prohibit the refund described in this subdivision,
27the excess funds shall be deposited in the Distressed Hospital Fund
28to be used for the purposes described in Section 14166.23, and
29shall be supplemental to and not supplant existing funds.
30(e) Any methodology or other provision specified in Article
315.21 (commencing with Section 14167.1) and this article may be
32modified by the department, in consultation with the hospital
33community, to the extent necessary to meet the requirements of
34federal law or regulations to obtain federal approval or to enhance
35the probability that federal approval can be obtained, provided the
36modifications do not violate the spirit and intent of Article 5.21
37(commencing with Section 14167.1) or this article and are not
38inconsistent with the conditions of implementation set forth in
P10 1(f) The department, in consultation with the hospital community,
2shall make adjustments, as necessary, to the amounts calculated
3pursuant to Section 14167.32 in order to ensure compliance with
4the federal requirements set forth in Section 433.68 of Title 42 of
5the Code of Federal Regulations or elsewhere in federal law.
6(g) The department shall request approval from the federal
7Centers for Medicare and Medicaid Services for the implementation
8of this article. In making this request, the department shall seek
9specific approval from the federal Centers for Medicare and
10Medicaid Services to exempt providers identified in this article as
11exempt from the fees specified, including the submission, as may
12be necessary, of a request for waiver of the broad based
13requirement, waiver of the uniform fee requirement, or both,
14pursuant to paragraphs (e)(1) and (e)(2) of Section 433.68 of Title
1542 of the Code of Federal Regulations.
16(h) (1) For purposes of this section, a modification pursuant to
17this section shall be implemented only if the modification, change,
18or adjustment does not do either of the following:
19(A) Reduces or increases the supplemental payments or grants
20made under Article 5.21 (commencing with Section 14167.1) in
21the aggregate for the 2008-09, 2009-10, and 2010-11 federal
22fiscal years to a hospital by more than 2 percent of the amount that
23would be determined under this article without any change or
25(B) Reduces or increases the amount of the fee payable by a
26hospital in total under this article for the 2008-09, 2009-10, and
272010-11 federal fiscal years by more than 2 percent of the amount
28that would be determined under this article without any change or
30(2) The department shall provide the Joint Legislative Budget
31Committee and the fiscal and appropriate policy committees of
32the Legislature a status update of the implementation of Article
335.21 (commencing with Section 14167.1) and this article on
34January 1, 2010, and quarterly thereafter. Information on any
35adjustments or modifications to the provisions of this article or
36Article 5.21 (commencing with Section 14167.1) that may be
37required for federal approval shall be provided coincident with the
38consultation required under subdivisions (f) and (g).
39(i) Notwithstanding Chapter 3.5 (commencing with Section
4011340) of Part 1 of Division 3 of Title 2 of the Government Code,
P11 1the department may implement this article or Article 5.21
2(commencing with Section 14167.1) by means of provider
3bulletins, all plan letters, or other similar instruction, without taking
4regulatory action. The department shall also provide notification
5to the Joint Legislative Budget Committee and to the appropriate
6policy and fiscal committees of the Legislature within five working
7days when the above-described action is taken in order to inform
8the Legislature that the action is being implemented.
9(j) Notwithstanding any law, the Controller may use the funds
10in the Hospital Quality Assurance Revenue Fund for cashflow
11loans to the General Fund as provided in Sections 16310 and 16381
12of the Government Code.
13(k) Notwithstanding Sections 14167.17 and 14167.40,
14subdivisions (b) to (h), inclusive, shall become inoperative on
15January 1, 2013, subdivisions (a), (i), and (j) shall remain operative
16until January 1, 2017, and as of January 1, 2017, this section is
Article 5.230 (commencing with Section 14169.51) is
25added to Chapter 7 of Part 3 of Division 9 of the Welfare and
26Institutions Code, to read:
For the purposes of this article, the following
32definitions shall apply:
33(a) “General acute care days” means the total number of
34Medi-Cal general acute care days paid by the department to a
35hospital for services in the __ calendar year, as reflected in the
36state paid claims file on ___.
37(b) “Hospital inpatient services” means all services covered
38under Medi-Cal and furnished by hospitals to patients who are
39admitted as hospital inpatients and reimbursed on a fee-for-service
40basis by the department directly or through its fiscal intermediary.
P13 1Hospital inpatient services include outpatient services furnished
2by a hospital to a patient who is admitted to that hospital within
324 hours of the provision of the outpatient services that are related
4to the condition for which the patient is admitted. Hospital inpatient
5services do not include services for which a managed health care
6plan is financially responsible.
7(c) “Hospital outpatient services” means all services covered
8under Medi-Cal furnished by hospitals to patients who are
9registered as hospital outpatients and reimbursed by the department
10on a fee-for-service basis directly or through its fiscal intermediary.
11Hospital outpatient services do not include services for which a
12managed health care plan is financially responsible, or services
13rendered by a hospital-based federally qualified health center for
14which reimbursement is received pursuant to Section 14132.100.
15(d) (1) “Managed health care plan” means a health care delivery
16system that manages the provision of health care and receives
17prepaid capitated payments from the state in return for providing
18services to Medi-Cal beneficiaries.
19(2) (A) Managed health care plans include county organized
20health systems and entities contracting with the department to
21provide services pursuant to two-plan models and geographic
22managed care. Entities providing these services contract with the
23department pursuant to any of the following:
24(i) Article 2.7 (commencing with Section 14087.3).
25(ii) Article 2.8 (commencing with Section 14087.5).
26(iii) Article 2.81 (commencing with Section 14087.96).
27(iv) Article 2.91 (commencing with Section 14089).
28(B) Managed health care plans do not include
any of the
30(i) Mental health plans contracting to provide mental health care
31for Medi-Cal beneficiaries pursuant to Chapter 8.9 (commencing
32with Section 14700).
33(ii) Health plans not covering inpatient services such as primary
34care case management plans operating pursuant to Section
36(iii) Program for All-Inclusive Care for the Elderly organizations
37operating pursuant to Chapter 8.75 (commencing with Section
39(e) “New hospital” means a hospital operation, business, or
40facility functioning under current or prior ownership as a private
P14 1hospital that does not have a days data source or a hospital that
2has a days data source in whole, or in part, from a previous operator
3where there is an outstanding monetary liability owed to the state
4in connection with the Medi-Cal program and the new operator
5did not assume liability for the outstanding monetary obligation.
6(f) “Private hospital” means a hospital that meets all of the
8(1) Is licensed pursuant to subdivision (a) of Section 1250 of
9the Health and Safety Code.
10(2) Is in the Charitable Research Hospital peer group, as set
11forth in the 1991 Hospital Peer Grouping Report published by the
12department, or is not designated as a specialty hospital in the
13hospital’s Office of Statewide Health Planning and Development
14Annual Financial Disclosure Report for the hospital’s latest fiscal
15year ending in __.
16(3) Does not satisfy the Medicare criteria to be classified as a
17long-term care hospital.
18(4) Is a nonpublic hospital, nonpublic converted hospital, or
19converted hospital as those terms are defined in paragraphs (26)
20to (28), inclusive, respectively, of subdivision (a) of Section
22(g) “Program period” means the period from January 1, 2014,
23to December 31, 2015, inclusive.
24(h) “Upper payment limit” means a federal upper payment limit
25on the amount of the Medicaid payment for which federal financial
26participation is available for a class of service and a class of health
27care providers, as specified in Part 447 of Title 42 of the Code of
28Federal Regulations. The applicable upper payment limit shall be
29separately calculated for inpatient and outpatient hospital services.
Private hospitals shall be paid supplemental
2amounts for the provision of hospital outpatient services as set
3forth in this section. The supplemental amounts shall be in addition
4to any other amounts payable to hospitals with respect to those
5services and shall not affect any other payments to hospitals. The
6supplemental amounts shall result in payments equal to the
7statewide aggregate upper payment limit for private hospitals for
8each subject fiscal year.
begin deletePrivate end deletehospitals shall be paid supplemental amounts for the
P20 1provision of hospital inpatient services for the program period as
2set forth in this section. The supplemental amounts shall be in
3addition to any other amounts payable to hospitals with respect to
4those services and shall not affect any other payments to hospitals.
5The supplemental amounts shall result in payments equal to the
6statewide aggregate upper payment limit for private hospitals for
7each subject fiscal year.
(a) The department shall increase capitation
28payments to Medi-Cal managed health care plans for each subject
29fiscal year as set forth in this section.
30(b) The increased capitation payments shall be made as part of
31the monthly capitated payments made by the department to
32managed health care plans.
33(c) The aggregate amount of increased capitation payments to
34all Medi-Cal managed health care plans for each subject fiscal
35year shall be the maximum amount for which federal financial
36participation is available on an aggregate statewide basis for the
37applicable subject fiscal year.
38(d) The department shall determine the amount of the increased
39capitation payments for each managed health care plan. The
40department shall consider the composition of Medi-Cal enrollees
P23 1in the plan, the anticipated utilization of hospital services by the
2plan’s Medi-Cal enrollees, and other factors that the department
3determines are reasonable and appropriate to ensure access to
4high-quality hospital services by the plan’s enrollees.
5(e) The amount of increased capitation payments to each
6Medi-Cal managed health care plan shall not exceed an amount
7that results in capitation payments that are certified by the state’s
8actuary as meeting federal requirements, taking into account the
9requirement that all of the increased capitation payments under
10this section shall be paid by the Medi-Cal managed health care
11plans to hospitals for hospital services to Medi-Cal enrollees of
13(f) (1) The increased capitation payments to managed health
14care plans under this section shall be made to support the
15availability of hospital services and ensure access to hospital
16services for Medi-Cal beneficiaries. The increased capitation
17payments to managed health care plans shall commence within 90
18days of the date on which all necessary federal approvals have
19been received, and shall include, but not be limited to, the sum of
20the increased payments for all prior months for which payments
22(2) To secure the necessary funding for the payment or payments
23made pursuant to paragraph (1), the department may accumulate
24funds in the Hospital Quality Assurance Revenue Fund, established
25pursuant to Section 14167.35, for the purpose of funding managed
26health care capitation payments under this article regardless of the
27date on which capitation payments are scheduled to be paid in
28order to secure the necessary total funding for managed health care
29payments by December 31, 2015.
30(g) Payments to managed health care plans that would be paid
31consistent with actuarial certification and enrollment in the absence
32of the payments made pursuant to this section, including, but not
33limited to, payments described in Section 14182.15, shall not be
34reduced as a consequence of payments under this section.
35(h) (1) Each managed health care plan shall expend 100 percent
36of any increased capitation payments it receives under this section
37on hospital services.
38(2) The department may issue change orders to amend contracts
39with managed health care plans as needed to adjust monthly
40capitation payments in order to implement this section.
P24 1(3) For entities contracting with the department pursuant to
2Article 2.91 (commencing with Section 14089), any incremental
3increase in capitation rates pursuant to this section shall not be
4subject to negotiation and approval by the California Medical
begin deleteIn the event end deletefederal financial participation is not
7available for all of the increased capitation payments determined
8for a month pursuant to this section for any reason, the increased
9capitation payments mandated by this section for that month shall
10be reduced proportionately to the amount for which federal
11financial participation is available.
(a) Each managed health care plan receiving
17increased capitation payments under Section 14169.54 shall expend
18the capitation rate increases in a manner consistent with actuarial
19certification, enrollment, and utilization on hospital services. Each
20managed health care plan shall expend increased capitation
21payments on hospital services within 30 days of receiving the
22increased capitation payments to the extent they are made for a
23subject month that is prior to the date on which the payments are
24received by the managed health care plan.
25(b) The sum of all expenditures made by a managed health care
26plan for hospital services pursuant to this section shall equal, or
27approximately equal, all increased capitation payments received
28by the managed health care plan, consistent with actuarial
29certification, enrollment, and utilization, from the department
30pursuant to Section 14169.54.
31(c) Any delegation or attempted delegation by a managed health
32care plan of its obligation to expend the capitation rate increases
33under this section shall not relieve the plan from its obligation to
34expend those capitation rate increases. Managed health care plans
35shall submit the documentation that the department may require
36to demonstrate compliance with this subdivision. The
37documentation shall demonstrate actual expenditure of the
38capitation rate increases for hospital services, and not assignment
39to subcontractors of the managed health care plan’s obligation of
40the duty to expend the capitation rate increases.
P25 1(d) The supplemental hospital payments made by managed
2health care plans pursuant to this section shall reflect the overall
3 purpose of this article and Article 5.231 (commencing with Section
5(e) This article is not intended to create a private right of action
6by a hospital against a managed care plan provided that the
7managed health care plan expends all increased capitation payments
8for hospital services.
(a) Exclusive of payments made under
begin delete Article ____ , payment
35(commencing with Section ____) and Article ____ (commencing
36with Section ____)end delete
39rates for hospital outpatient services, furnished by private hospitals,
40nondesignated public hospitals, and designated public hospitals
P27 1before December 31, 2015, exclusive of amounts payable under
2this article, shall not be reduced below the rates in effect on January
4(b) Rates payable to hospitals for hospital inpatient services
5furnished before December 31, 2015, under contracts negotiated
6pursuant to the selective provider contracting program under Article
72.6 (commencing with Section 14081), shall not be reduced below
8the contract rates in effect on January 1, 2014. This subdivision
9shall not prohibit changes to the supplemental payments paid to
10individual hospitals under Sections 14166.12, 14166.17, and
1114166.23, provided that the aggregate amount of the payments for
12each subject fiscal year is not less than the minimum amount
13permitted under former Section 14167.13.
14(c) Notwithstanding Section 14105.281, exclusive of payments
15made under former Article 5.21 (commencing with Section
begin delete andend delete Article 5.226 (commencing with Section
18 payments to private hospitals for hospital inpatient services
19furnished before January 1, 2014, that are not reimbursed under a
20contract negotiated pursuant to the selective provider contracting
21program under Article 2.6 (commencing with Section 14081),
22exclusive of amounts payable under this article, shall not be less
23than the amount of payments that would have been made under
24the payment methodology in effect on the effective date of this
26(d) Upon the implementation of the new Medi-Cal inpatient
27hospital reimbursement methodology based on diagnosis-related
28groups pursuant to Section 14105.28, the requirements in
29subdivisions (b) and (c) shall be met if the rates paid under the
30new Medi-Cal inpatient hospital reimbursement methodology
31based on diagnosis-related groups result in an average payment
32per discharge to all hospitals subject to the new reimbursement
33methodology, calculated on an aggregate basis per subject fiscal
34year, exclusive of amounts payable under this article, amounts
35payable under Sections 14166.11 and 14166.23, and if amounts
36payable under Sections 14166.12 and 14166.17 are not included
37in the payments under the diagnosis-related group methodology
38and continue to be paid separately to hospitals, exclusive of those
39amounts, that is not less than the average payment per discharge
40to the hospitals, exclusive of amounts payable under this article,
P28 1amounts payable under Sections 14166.11 and 14166.23, and if
2amounts payable under Sections 14166.12 and 14166.17 are not
3included in the payments under the diagnosis-related group
4methodology and continue to be paid separately to hospitals,
5exclusive of those amounts, calculated on an aggregate basis for
6the fiscal year ending June 30, 2012, adjusted, in consultation with
7the hospital community, to reflect the movement of populations
8into managed care under Article 5.4 (commencing with Section
10(e) Solely for purposes of this article, a rate reduction or a
11change in a rate methodology that is enjoined by a court shall be
12included in the determination of a rate or a rate methodology until
13all appeals or judicial reviews have been exhausted and the rate
14reduction or change in rate methodology has been permanently
15enjoined, denied by the federal government, or otherwise
16permanently prevented from being implemented.
17(f) Disproportionate share replacement payments to private
18hospitals shall be not less than the amount determined pursuant to
19Section 14166.11. For purposes of this subdivision, references to
20Section 14166.11 are to the version of Section 14166.11 in effect
21on the effective date of the act that added this subdivision.
Article 5.231 (commencing with Section 14169.71) is
3added to Chapter
begin delete 3 of Partend delete
7 of begin delete Division 9end delete of
4 the Welfare and Institutions Code, to read:
(a) There shall be imposed on each general acute
29care hospital that is not an exempt facility a quality assurance fee,
30provided that a quality assurance fee under this article shall not be
31imposed on a converted hospital.
32(b) The quality assurance fee shall be computed starting on
33January 1, 2014, and continue through and including December
19 The quality assurance fee, as paid
pursuant to this section,
20shall be paid by each hospital subject to the fee to the department
21for deposit in the Hospital Quality Assurance Revenue Fund
22. Deposits may be
23accepted at any time and will be credited toward the program
26 This section shall become inoperative if the federal Centers
27for Medicare and Medicaid Services denies approval for, or does
28not approve before July 1,
begin delete 2015,end delete
the implementation of the
29quality assurance fee pursuant to this article or the supplemental
30payments to private hospitals described in Sections 14169.52 and
33 In no case shall the aggregate fees collected in a federal fiscal
34year pursuant to this section, former Section 14167.32,
begin deleteSection 14169.32 exceed
3514168.32, and Sectionend delete
36the maximum percentage of the annual aggregate net patient
37revenue for hospitals subject to the fee that is prescribed pursuant
38to federal law and regulations as necessary to preclude a finding
39that an indirect guarantee has been created.
27 The department shall work in consultation with the hospital
28community to implement this article and Article 5.230
29(commencing with Section 14169.51).
31 This subdivision creates a contractually enforceable promise
32on behalf of the state to use the proceeds of the quality assurance
33fee, including any federal matching funds, solely and exclusively
34for the purposes set forth in this article as they existed on the
35effective date of this article, to limit the amount of the proceeds
36of the quality assurance fee to be used to pay for the health care
37coverage of children to the amounts specified in this article, to
38limit any payments for the department’s costs of administration
39to the amounts set forth in this article on the effective date of this
40article, to maintain and continue prior reimbursement levels as set
P43 1forth in Section
begin delete ____end delete on the effective date of that begin delete articleend delete
2, and to otherwise comply with all its obligations set forth
3in Article 5.230 (commencing with Section 14169.51) and this
4article provided that amendments that arise from, or have as a basis
5for, a decision, advice, or determination by the federal Centers for
6Medicare and Medicaid Services relating to federal approval of
7the quality assurance fee or the payments set forth in this article
8or Article 5.230 (commencing with Section 14169.51) shall control
9for the purposes of this subdivision.
11 (1) Effective January 1,
begin delete 2014end delete, the rates payable to
12hospitals and managed health care plans under Medi-Cal shall be
13the rates then payable without the supplemental and increased
14capitation payments set forth in Article 5.230 (commencing with
16(2) The supplemental payments and other payments under
17Article 5.230 (commencing with Section 14169.51) shall be
18regarded as quality assurance payments, the implementation or
19suspension of which does not affect a determination of the
20adequacy of any rates under federal law.
(a) (1) All fees required to be paid to the state
21pursuant to this article shall be paid in the form of remittances
22payable to the department.
23(2) The department shall directly transmit the fee payments to
24the Treasurer to be deposited in the Hospital Quality Assurance
25Revenue Fund, created pursuant to Section 14167.35.
26Notwithstanding Section 16305.7 of the Government Code, any
27interest and dividends earned on deposits in the fund from the
28proceeds of the fee assessed pursuant to this article shall be retained
29in the fund for purposes specified in subdivision (b).
30(b) Notwithstanding subdivision (c) of Section 14167.35,
31subdivision (b) of Section 14168.33, and subdivision (b) of Section
3214169.33, all funds from the proceeds of the fee assessed pursuant
33to this article in the Hospital Quality Assurance Revenue Fund,
34together with any interest and dividends earned on money in the
35fund, shall, upon appropriation by the Legislature, continue to be
36used exclusively to enhance federal financial participation for
37hospital services under the Medi-Cal program, to provide additional
38reimbursement to, and to support quality improvement efforts of,
39hospitals, and to minimize uncompensated care provided by
40hospitals to uninsured
begin delete patients.end delete
(a) This article shall be implemented only as long
33as all of the following conditions are met:
34(1) Subject to Section ____, the quality assurance fee is
35established in a manner that is fundamentally consistent with this
37(2) The quality assurance fee, including any interest on the fee
38after collection by the department, is deposited in a segregated
39fund apart from the General Fund.
P50 1(3) The proceeds of the quality assurance fee, including any
2interest and related federal reimbursement, may only be used for
3the purposes set forth in this article.
4(b) No hospital shall be required to pay the quality assurance
5fee to the department unless and until the state receives and
6maintains federal approval.
7(c) Hospitals shall be required to pay the quality assurance fee
8to the department as set forth in this article only as long as all of
9the following conditions are met:
10(1) The federal Centers for Medicare and Medicaid Services
11allows the use of the quality assurance fee as set forth in this article
12in accordance with federal approval.
13(2) Article 5.230 (commencing with Section 14169.51) is
14enacted and remains in effect and hospitals are reimbursed the
15increased rates for services during the program period, as defined
16in Section 14169.51.
17(3) The full amount of the quality assurance fee
18collected pursuant to this article remains available only for the
19purposes specified in this article.
This act is an urgency statute necessary for the
39immediate preservation of the public peace, health, or safety within
P55 1the meaning of Article IV of the Constitution and shall go into
2immediate effect. The facts constituting the necessity are:
3In order to make the necessary changes to increase
begin delete medi-calend delete
4 payments to hospitals and improve access at the earliest
5time, so as to allow this act to be operative as soon as approval
6from the federal
begin delete centersend delete for Medicare and Medicaid
7Services is obtained by the State Department of Health Care
8Services, it is necessary that this act takes effect immediately.