Amended in Assembly June 11, 2014

Senate Bill No. 1465

Introduced by Committee on Health (Senators Hernandez (Chair), begin delete Anderson, end delete Beall, De León, DeSaulnier, Evans, Monning, begin insert Morrell, end insert Nielsen, and Wolk)

March 20, 2014

An act to amend Sections 8880.5, 14670.3, and 14670.5 of the Government Code, to amend begin delete Section end delete begin insert Sections 1728.7 and end insert 1797.98b of the Health and Safety Code, to amend and renumber Section 10961 of the Insurance Code, to amend Sections 667.5, 830.3, 830.5, and 3000 of the Penal Code, to amend Section 2356 of the Probate Code, and to amend Sections 736, 5328.15, 6000, 6002, 6600, 6601, 6608.7, 6609, 9717, 10600.1, begin insert 10725, end insert 14043.26, begin insert 14087.36, end insert 14105.192, begin insert 14124.5, end insert 14169.51, 14169.52, 14169.53, 14169.55, 14169.56, 14169.58, 14169.59, 14169.61, 14169.63, 14169.65, 14169.66, 14169.72, 14312, 14451, 15657.8, 16541, and 17608.05 of the Welfare and Institutions Code, relating to health, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 1465, as amended, Committee on Health. Health.

begin insert

(1) Existing law prohibits any private or public organization, political subdivision of the state, or other government agency within the state from providing or arranging for skilled nursing services to patients in the home without first obtaining a home health agency license, as defined, from the State Department of Health Care Services. Existing law establishes the requirements for licensure as a home health agency. Existing law requires the department to license a home health agency that, among other things, is accredited by the Joint Commission on Accreditation of Healthcare Organizations or the Community Health Accreditation Program and the accrediting organization forwards to the department certain information.

end insert begin insert

For purposes of licensure, the bill would instead require a home health agency to be accredited by an entity approved by the federal Centers for Medicare and Medicaid Services as a national accreditation organization.

end insert begin delete

(1) 

end delete

begin insert (2) end insert begin insert   end insert Existing law establishes the Maddy Emergency Medical Services (EMS) Fund, and authorizes each county to establish an emergency medical services fund for reimbursement of costs related to emergency medical services. Existing law requires each county establishing a fund to, on January 1, 1989, and each April 15 thereafter, report to the Legislature on the implementation and status of the Emergency Medical Services Fund, as specified.

This bill would instead require each county to submit its reports to the Emergency Medical Services Authority. The bill would require the authority to compile and forward a summary of each county’s report to the appropriate policy and fiscal committees of the Legislature.

begin delete

(2) 

end delete

begin insert (3) end insert begin insert   end insert Existing law creates the California Health Benefit Exchange for the purpose of facilitating the enrollment of qualified individuals and small employers in qualified health plans. Existing law requires the Exchange to enter into contracts with and certify as a qualified health plan bridge plan products that meet specified requirements. Existing law provides for the regulation of health insurers by the Department of Insurance and defines a bridge plan product to include an individual health benefit plan offered by a health insurer. Existing law requires, until 5 years after federal approval of bridge plan products, a health insurer selling a bridge plan product to provide specified enrollment periods and to maintain a medical loss ratio of 85% for the product. Existing law specifies that the remaining provisions of the chapter of law to which these requirements regarding bridge plan products were added became inoperative on January 1, 2014.

This bill would relocate those requirements regarding bridge plan products to a different chapter of law and make other technical, nonsubstantive changes.

begin delete

(3) 

end delete

begin insert (4) end insert begin insert   end insert 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 requires an applicant or provider, as defined, to submit a complete application package for enrollment, continuing enrollment, or enrollment at a new location or a change in location. Existing law generally requires the department to give written notice as to the status of an application to an applicant or provider within 180 days after receiving an application package, or from the date of notifying an applicant or provider that he or she does not qualify as a preferred provider, notifying the applicant or provider if specified circumstances apply begin insert , or, on the 181st day, to grant provisional provider status to the applicant or provider end insert .

This bill would begin insert , except as specified, authorize an applicant or provider to request to withdraw an application package submitted pursuant to these provisions, and would end insert require the department to notify the applicant or provider if the application package is withdrawn by request of the applicant begin insert or provider end insert and the department’s review is canceled.

begin insert

(5) Under existing law, one of the methods by which Medi-Cal services are provided is pursuant to various models of managed care. In this regard, existing law authorizes the City and County of San Francisco to establish a health authority to be the local initiative component of the managed care model in that city and county. Existing law requires that the governing board of the health authority consist of 18 voting members, 2 of which are required to be nominated by the beneficiary committee established by the health authority to advise the authority on issues of concern to the recipients of services. Existing law requires that at least one of the 2 persons nominated by the beneficiary committee be a Medi-Cal beneficiary.

end insert begin insert

This bill would instead require the health authority to establish a member advisory committee to advise the authority on issues of concern to the recipients of services and would delete the requirement that one of the 2 persons nominated by the committee be a Medi-Cal beneficiary. The bill would instead require the 2 persons nominated by the committee to be enrolled in a health care program operated by the health authority, as specified, or be the parent or legal guardian of an enrollee.

end insert begin insert

(6) Existing law authorizes the Director of Health Care Services to administer laws pertaining to the administration of health care services and medical assistance throughout the state by, among other things, adopting regulations pursuant to the provisions of the Administrative Procedure Act to enable the department to carry out the purposes and intent of the Medi-Cal Act.

end insert begin insert

This bill would correct obsolete cross-references to the Administrative Procedure Act in these provisions, and would make other technical, nonsubstantive changes.

end insert begin delete

(4) 

end delete

begin insert (7) end insert begin insert   end insert Existing law, subject to federal approval, imposes a hospital quality assurance fee, as specified, on certain general acute care hospitals, to be deposited into the Hospital Quality Assurance Revenue Fund. Existing law, subject to federal approval, requires that moneys in the Hospital Quality Assurance Revenue Fund be continuously appropriated during the first program period of January 1, 2014, to December 31, 2016, inclusive, and available only for certain purposes, including paying for health care coverage for children, as specified, and making supplemental payments for certain services to private hospitals and increased capitation payments to Medi-Cal managed care plans. Existing law also requires the payment of direct grants to designated and nondesignated public hospitals in support of health care expenditures funded by the quality assurance fee for the first program period. For subsequent program periods, existing law authorizes the payment of direct grants for designated and nondesignated public hospitals and requires that the moneys in the Hospital Quality Assurance Revenue Fund be used for the above-described purposes upon appropriation by the Legislature in the annual Budget Act.

This bill would define the term “fund” to mean the Hospital Quality Assurance Revenue Fund for the purposes of these provisions and would make other technical, conforming changes to these provisions.

begin delete

(5) 

end delete

begin insert (8) end insert begin insert   end insert Existing law provides for state hospitals for the care, treatment, and education of mentally disordered persons, which are under the jurisdiction of the State Department of State Hospitals.

This bill would make technical, nonsubstantive changes to various provisions of law to, in part, delete obsolete references to the State Department of Mental Health. The bill would also make other technical, nonsubstantive changes.

begin delete

(6) 

end delete

begin insert (9) end insert begin insert   end insert This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

Section 8880.5 of the Government Code is
amended to read:

8880.5.  

Allocations for education:

The California State Lottery Education Fund is created within
the State Treasury, and is continuously appropriated for carrying
out the purposes of this chapter. The Controller shall draw warrants
on this fund and distribute them quarterly in the following manner,
provided that the payments specified in subdivisions (a) to (g),
inclusive, shall be equal per capita amounts.

(a) (1) Payments shall be made directly to public school
districts, including county superintendents of schools, serving
kindergarten and grades 1 to 12, inclusive, or any part thereof, on
the basis of an equal amount for each unit of average daily
attendance, as defined by law and adjusted pursuant to subdivision
(l).

(2) For purposes of this paragraph, in each of the 2008-09,
2009-10, 2010-11, 2011-12, 2012-13, 2013-14, and 2014-15
fiscal years, the number of units of average daily attendance in
each of those fiscal years for programs for public school districts,
including county superintendents of schools, serving kindergarten
and grades 1 to 12, inclusive, shall include the same amount of
average daily attendance for classes for adults and regional
occupational centers and programs used in the calculation made
pursuant to this subdivision for the 2007-08 fiscal year.

(b) Payments shall also be made directly to public school
districts serving community colleges, on the basis of an equal
amount for each unit of average daily attendance, as defined by
law.

(c) Payments shall also be made directly to the Board of Trustees
of the California State University on the basis of an amount for
each unit of equivalent full-time enrollment. Funds received by
the trustees shall be deposited in and expended from the California
State University Lottery Education Fund, which is hereby created
or, at the discretion of the trustees, deposited in local trust accounts
in accordance with subdivision (j) of Section 89721 of the
Education Code.

(d) Payments shall also be made directly to the Regents of the
University of California on the basis of an amount for each unit
of equivalent full-time enrollment.

(e) Payments shall also be made directly to the Board of
Directors of the Hastings College of the Law on the basis of an
amount for each unit of equivalent full-time enrollment.

(f) Payments shall also be made directly to the Department of
the Youth Authority for educational programs serving kindergarten
and grades 1 to 12, inclusive, or any part thereof, on the basis of
an equal amount for each unit of average daily attendance, as
defined by law.

(g) Payments shall also be made directly to the two California
Schools for the Deaf, the California School for the Blind, and the
three Diagnostic Schools for Neurologically Handicapped Children,
on the basis of an amount for each unit of equivalent full-time
enrollment.

(h) Payments shall also be made directly to the State Department
of Developmental Services and the State Department of State
Hospitals for clients with developmental or mental disabilities who
are enrolled in state hospital education programs, including
developmental centers, on the basis of an equal amount for each
unit of average daily attendance, as defined by law.

(i) No Budget Act or other statutory provision shall direct that
payments for public education made pursuant to this chapter be
used for purposes and programs (including workload adjustments
and maintenance of the level of service) authorized by Chapters
498, 565, and 1302 of the Statutes of 1983, Chapter 97 or 258 of
the Statutes of 1984, or Chapter 1 of the Statutes of the 1983-84
Second Extraordinary Session.

(j) School districts and other agencies receiving funds distributed
pursuant to this chapter may at their option utilize funds allocated
by this chapter to provide additional funds for those purposes and
programs prescribed by subdivision (i) for the purpose of
enrichment or expansion.

(k) As a condition of receiving any moneys pursuant to
subdivision (a) or (b), each school district and county
superintendent of schools shall establish a separate account for the
receipt and expenditure of those moneys, which account shall be
clearly identified as a lottery education account.

(l) Commencing with the 1998-99 fiscal year, and each year
thereafter, for purposes of subdivision (a), average daily attendance
shall be increased by the statewide average rate of excused
absences for the 1996-97 fiscal year as determined pursuant to the
provisions of Chapter 855 of the Statutes of 1997. The statewide
average excused absence rate, and the corresponding adjustment
factor required for the operation of this subdivision, shall be
certified to the begin delete State end delete Controller by the Superintendent of Public
Instruction.

(m) It is the intent of this chapter that all funds allocated from
the California State Lottery Education Fund shall be used
exclusively for the education of pupils and students and no funds
shall be spent for acquisition of real property, construction of
facilities, financing of research, or any other noninstructional
purpose.

SEC. 2.  

Section 14670.3 of the Government Code is amended
to read:

14670.3.  

Notwithstanding Section 14670, the Director of
General Services, with the consent of the State Department of
Developmental Services, may let to a nonprofit corporation, for
the purpose of conducting an educational and work program for
persons with intellectual disabilities, and for a period not to exceed
55 years, real property not exceeding five acres located within the
grounds of the Fairview State Hospital.

The lease authorized by this section shall be nonassignable and
shall be subject to periodic review every five years. The review
shall be made by the Director of General Services, who shall do
both of the following:

(a)  begin delete Assure end delete begin insert Ensure end insert the state that the original purposes of the
lease are being carried out.

(b) Determine what, if any, adjustment should be made in the
terms of the lease.

The lease shall also provide for an initial capital outlay by the
lessee of thirty thousand dollars ($30,000) prior to January 1, 1976.
The capital outlay may be, or may have been, contributed before
or after the effective date of the act adding this section.

SEC. 3.  

Section 14670.5 of the Government Code is amended
to read:

14670.5.  

Notwithstanding Section 14670, the Director of
General Services, with the consent of the State Department of
Developmental Services may let to a nonprofit corporation, for
the purpose of establishing and maintaining a rehabilitation center
for persons with intellectual disabilities, for a period not exceeding
20 years, real property, not exceeding five acres, located within
the grounds of the Fairview State Hospital in Orange County, and
that is retained by the state primarily to provide a peripheral buffer
area, or zone, between real property that the state hospital is located
on and adjacent real property, if the director deems the letting is
in the best interests of the state.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 1728.7 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

1728.7.  

(a)  Notwithstanding any other provision of this
chapter, the state department shall issue a license to a home health
agency that applies to the state department for a home health
agency license and meets all of the following requirements:

(1)  Is accredited as a home health agency by begin delete either the Joint
Commission on Accreditation of Healthcare Organizations
(JCAHO) or the Community Health Accreditation Program
(CHAP) end delete begin insert an entity approved by the federal Centers for Medicare
and Medicaid Services as a national accreditation organization end insert ,
and the begin delete accrediting organization end delete begin insert national accreditation
organization end insert forwards to the state department copies of all initial
and subsequent survey and other accreditation reports or findings.

(2)  Files an application with fees pursuant to this chapter.

(3)  Meets any other additional licensure requirements of, or
regulations adopted pursuant to, this chapter that the state
department identifies, after consulting with begin delete either the JCAHO or
the CHAP end delete begin insert the national accreditation organizations end insert , as more
stringent than the accreditation requirements of begin delete either JCAHO or
CHAP end delete begin insert the national accreditation organizations end insert .

(b)  The state department may require a survey of an accredited
home health agency to ensure the accreditation requirements are
met. These surveys shall be conducted using a selective sample
basis.

(c)  The state department may require a survey of an accredited
home health agency to investigate complaints against an accredited
home health agency for substantial noncompliance, as determined
by the state department, with these accreditation standards.

(d)  Notwithstanding subdivisions (a), (b), and (c), the state
department shall retain its full range of authority over accredited
home health agencies to ensure the licensure and accreditation
requirements are met. This authority shall include the entire scope
of enforcement sanctions and options available for unaccredited
home health agencies.

begin delete SEC. 4. end delete
begin insert SEC. 5. end insert   

Section 1797.98b of the Health and Safety Code is
amended to read:

1797.98b.  

(a)  Each county establishing a fund, on January 1,
1989, and on each April 15 thereafter, shall report to the authority
on the implementation and status of the Emergency Medical
Services Fund. Notwithstanding Section 10231.5 of the
Government Code, the authority shall compile and forward a
summary of each county’s report to the appropriate policy and
fiscal committees of the Legislature. Each county report, and the
summary compiled by the authority, shall cover the immediately
preceding fiscal year, and shall include, but not be limited to, all
of the following:

(1)  The total amount of fines and forfeitures collected, the total
amount of penalty assessments collected, and the total amount of
penalty assessments deposited into the Emergency Medical
Services Fund, or, if no moneys were deposited into the fund, the
reason or reasons for the lack of deposits. The total amounts of
penalty assessments shall be listed on the basis of each statute that
provides the authority for the penalty assessment, including
Sections 76000, 76000.5, and 76104 of the Government Code, and
Section 42007 of the Vehicle Code.

(2) The amount of penalty assessment funds collected under
Section 76000.5 of the Government Code that are used for the
purposes of subdivision (e) of Section 1797.98a.

(3) The fund balance and the amount of moneys disbursed under
the program to physicians and surgeons, for hospitals, and for other
emergency medical services purposes, and the amount of money
disbursed for actual administrative costs. If funds were disbursed
for other emergency medical services, the report shall provide a
description of each of those services.

(4) The number of claims paid to physicians and surgeons, and
the percentage of claims paid, based on the uniform fee schedule,
as adopted by the county.

(5) The amount of moneys available to be disbursed to
physicians and surgeons, descriptions of the physician and surgeon
claims payment methodologies, the dollar amount of the total
allowable claims submitted, and the percentage at which those
claims were reimbursed.

(6) A statement of the policies, procedures, and regulatory action
taken to implement and run the program under this chapter.

(7) The name of the physician and surgeon and hospital
administrator organization, or names of specific physicians and
surgeons and hospital administrators, contacted to review claims
payment methodologies.

(8) A description of the process used to solicit input from
physicians and surgeons and hospitals to review payment
distribution methodology as described in subdivision (a) of Section
1797.98e.

(9) An identification of the fee schedule used by the county
pursuant to subdivision (e) of Section 1797.98c.

(10) (A) A description of the methodology used to disburse
moneys to hospitals pursuant to subparagraph (B) of paragraph
(5) of subdivision (b) of Section 1797.98a.

(B) The amount of moneys available to be disbursed to hospitals.

(C) If moneys are disbursed to hospitals on a claims basis, the
dollar amount of the total allowable claims submitted and the
percentage at which those claims were reimbursed to hospitals.

(11) The name and contact information of the entity responsible
for each of the following:

(A) Collection of fines, forfeitures, and penalties.

(B) Distribution of penalty assessments into the Emergency
Medical Services Fund.

(C) Distribution of moneys to physicians and surgeons.

(b) (1) Each county, upon request, shall make available to any
member of the public the report provided to the authority under
subdivision (a).

(2) Each county, upon request, shall make available to any
member of the public a listing of physicians and surgeons and
hospitals that have received reimbursement from the Emergency
Medical Services Fund and the amount of the reimbursement they
have received. This listing shall be compiled on a semiannual basis.

begin delete SEC. 5. end delete
begin insert SEC. 6. end insert   

Section 10961 of the Insurance Code is amended and
renumbered to read:

10965.18.  

(a) For purposes of this chapter, a bridge plan
product shall mean an individual health benefit plan that is offered
by a health insurer licensed under this part that contracts with the
Exchange pursuant to Title 22 (commencing with Section 100500)
of the Government Code.

(b) On and after September 30, 2013, if a health insurance policy
has not been filed with the commissioner, a health insurer that
contracts with the Exchange to offer a qualified bridge plan product
pursuant to Section 100504.5 of the Government Code shall file
the policy form with the commissioner pursuant to Section 10290.

(c) (1) Notwithstanding subdivision (a) of Section 10965.3, a
health insurer selling a bridge plan product shall not be required
to fairly and affirmatively offer, market, and sell the health
insurer’s bridge plan product except to individuals eligible for the
bridge plan product pursuant to the State Department of Health
Care Services and the Medi-Cal managed care plan’s contract
entered into pursuant to Section 14005.70 of the Welfare and
Institutions Code, provided the health care service plan meets the
requirements of subdivision (b) of Section 14005.70 of the Welfare
and Institutions Code.

(2) Notwithstanding subdivision (c) of Section 10965.3, a health
insurer selling a bridge plan product shall provide an initial open
enrollment period of six months, and an annual enrollment period
and a special enrollment period consistent with the annual
enrollment and special enrollment periods of the Exchange.

(d) A health insurer that contracts with the Exchange to offer a
qualified bridge plan product pursuant to Section 100504.5 of the
Government Code shall maintain a medical loss ratio of 85 percent
for the bridge plan product. A health insurer shall utilize, to the
extent possible, the same methodology for calculating the medical
loss ratio for the bridge plan product that is used for calculating
the health insurer’s medical loss ratio pursuant to Section 10112.25
and shall report its medical loss ratio for the bridge plan product
to the department as provided in Section 10112.25.

(e) This section shall become inoperative on the October 1 that
is five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative
and is repealed.

begin delete SEC. 6. end delete
begin insert SEC. 7. end insert   

Section 667.5 of the Penal Code is amended to read:

667.5.  

Enhancement of prison terms for new offenses because
of prior prison terms shall be imposed as follows:

(a) Where one of the new offenses is one of the violent felonies
specified in subdivision (c), in addition to and consecutive to any
other prison terms therefor, the court shall impose a three-year
term for each prior separate prison term served by the defendant
where the prior offense was one of the violent felonies specified
in subdivision (c). However, no additional term shall be imposed
under this subdivision for any prison term served prior to a period
of 10 years in which the defendant remained free of both prison
custody and the commission of an offense which results in a felony
conviction.

(b) Except where subdivision (a) applies, where the new offense
is any felony for which a prison sentence or a sentence of
imprisonment in a county jail under subdivision (h) of Section
1170 is imposed or is not suspended, in addition and consecutive
to any other sentence therefor, the court shall impose a one-year
term for each prior separate prison term or county jail term imposed
under subdivision (h) of Section 1170 or when sentence is not
suspended for any felony; provided that no additional term shall
be imposed under this subdivision for any prison term or county
jail term imposed under subdivision (h) of Section 1170 or when
sentence is not suspended prior to a period of five years in which
the defendant remained free of both the commission of an offense
which results in a felony conviction, and prison custody or the
imposition of a term of jail custody imposed under subdivision (h)
of Section 1170 or any felony sentence that is not suspended. A
term imposed under the provisions of paragraph (5) of subdivision
(h) of Section 1170, wherein a portion of the term is suspended
by the court to allow mandatory supervision, shall qualify as a
prior county jail term for the purposes of the one-year enhancement.

(c) For the purpose of this section, “violent felony” shall mean
any of the following:

(1) Murder or voluntary manslaughter.

(2) Mayhem.

(3) Rape as defined in paragraph (2) or (6) of subdivision (a)
of Section 261 or paragraph (1) or (4) of subdivision (a) of Section
262.

(4) Sodomy as defined in subdivision (c) or (d) of Section 286.

(5) Oral copulation as defined in subdivision (c) or (d) of Section
288a.

(6) Lewd or lascivious act as defined in subdivision (a) or (b)
of Section 288.

(7) Any felony punishable by death or imprisonment in the state
prison for life.

(8) Any felony in which the defendant inflicts great bodily injury
on any person other than an accomplice which has been charged
and proved as provided for in Section 12022.7, 12022.8, or 12022.9
on or after July 1, 1977, or as specified prior to July 1, 1977, in
Sections 213, 264, and 461, or any felony in which the defendant
uses a firearm which use has been charged and proved as provided
in subdivision (a) of Section 12022.3, or Section 12022.5 or
12022.55.

(9) Any robbery.

(10) Arson, in violation of subdivision (a) or (b) of Section 451.

(11) Sexual penetration as defined in subdivision (a) or (j) of
Section 289.

(12) Attempted murder.

(13) A violation of Section 18745, 18750, or 18755.

(14) Kidnapping.

(15) Assault with the intent to commit a specified felony, in
violation of Section 220.

(16) Continuous sexual abuse of a child, in violation of Section
288.5.

(17) Carjacking, as defined in subdivision (a) of Section 215.

(18) Rape, spousal rape, or sexual penetration, in concert, in
violation of Section 264.1.

(19) Extortion, as defined in Section 518, which would constitute
a felony violation of Section 186.22 begin delete of the Penal Code end delete .

(20) Threats to victims or witnesses, as defined in Section 136.1,
which would constitute a felony violation of Section begin delete 186.22 of the
Penal Code. end delete begin insert 186.22. end insert

(21) Any burglary of the first degree, as defined in subdivision
(a) of Section 460, wherein it is charged and proved that another
person, other than an accomplice, was present in the residence
during the commission of the burglary.

(22) Any violation of Section 12022.53.

(23) A violation of subdivision (b) or (c) of Section 11418. The
Legislature finds and declares that these specified crimes merit
special consideration when imposing a sentence to display society’s
condemnation for these extraordinary crimes of violence against
the person.

(d) For the purposes of this section, the defendant shall be
deemed to remain in prison custody for an offense until the official
discharge from custody, including any period of mandatory
supervision, or until release on parole or postrelease community
supervision, whichever first occurs, including any time during
which the defendant remains subject to reimprisonment or custody
in county jail for escape from custody or is reimprisoned on
revocation of parole or postrelease community supervision. The
additional penalties provided for prior prison terms shall not be
imposed unless they are charged and admitted or found true in the
action for the new offense.

(e) The additional penalties provided for prior prison terms shall
not be imposed for any felony for which the defendant did not
serve a prior separate term in state prison or in county jail under
subdivision (h) of Section 1170.

(f) A prior conviction of a felony shall include a conviction in
another jurisdiction for an offense which, if committed in
California, is punishable by imprisonment in the state prison or in
county jail under subdivision (h) of Section 1170 if the defendant
served one year or more in prison for the offense in the other
jurisdiction. A prior conviction of a particular felony shall include
a conviction in another jurisdiction for an offense which includes
all of the elements of the particular felony as defined under
California law if the defendant served one year or more in prison
for the offense in the other jurisdiction.

(g) A prior separate prison term for the purposes of this section
shall mean a continuous completed period of prison incarceration
imposed for the particular offense alone or in combination with
concurrent or consecutive sentences for other crimes, including
any reimprisonment on revocation of parole which is not
accompanied by a new commitment to prison, and including any
reimprisonment after an escape from incarceration.

(h) Serving a prison term includes any confinement time in any
state prison or federal penal institution as punishment for
commission of an offense, including confinement in a hospital or
other institution or facility credited as service of prison time in the
jurisdiction of the confinement.

(i) For the purposes of this section, a commitment to the State
Department of Mental Health, or its successor the State Department
of State Hospitals, as a mentally disordered sex offender following
a conviction of a felony, which commitment exceeds one year in
duration, shall be deemed a prior prison term.

(j) For the purposes of this section, when a person subject to
the custody, control, and discipline of the Secretary of begin insert the
Department of end insert Corrections and Rehabilitation is incarcerated at a
facility operated by the Division of Juvenile Justice, that
incarceration shall be deemed to be a term served in state prison.

(k) (1) Notwithstanding subdivisions (d) and (g) or any other
provision of law, where one of the new offenses is committed
while the defendant is temporarily removed from prison pursuant
to Section 2690 or while the defendant is transferred to a
community facility pursuant to Section 3416, 6253, or 6263, or
while the defendant is on furlough pursuant to Section 6254, the
defendant shall be subject to the full enhancements provided for
in this section.

(2) This subdivision shall not apply when a full, separate, and
consecutive term is imposed pursuant to any other provision of
law.

begin delete SEC. 7. end delete
begin insert SEC. 8. end insert   

Section 830.3 of the Penal Code, as amended by
Section 37 of Chapter 515 of the Statutes of 2013, is amended to
read:

830.3.  

The following persons are peace officers whose authority
extends to any place in the state for the purpose of performing
their primary duty or when making an arrest pursuant to Section
836 as to any public offense with respect to which there is
immediate danger to person or property, or of the escape of the
perpetrator of that offense, or pursuant to Section 8597 or 8598 of
the Government Code. These peace officers may carry firearms
only if authorized and under those terms and conditions as specified
by their employing agencies:

(a) Persons employed by the Division of Investigation of the
Department of Consumer Affairs and investigators of the Medical
Board of California and the Board of Dental Examiners, who are
designated by the Director of Consumer Affairs, provided that the
primary duty of these peace officers shall be the enforcement of
the law as that duty is set forth in Section 160 of the Business and
Professions Code.

(b) Voluntary fire wardens designated by the Director of
Forestry and Fire Protection pursuant to Section 4156 of the Public
Resources Code, provided that the primary duty of these peace
officers shall be the enforcement of the law as that duty is set forth
in Section 4156 of that code.

(c) Employees of the Department of Motor Vehicles designated
in Section 1655 of the Vehicle Code, provided that the primary
duty of these peace officers shall be the enforcement of the law as
that duty is set forth in Section 1655 of that code.

(d) Investigators of the California Horse Racing Board
designated by the board, provided that the primary duty of these
peace officers shall be the enforcement of Chapter 4 (commencing
with Section 19400) of Division 8 of the Business and Professions
Code and Chapter 10 (commencing with Section 330) of Title 9
of Part 1 of this code.

(e) The State Fire Marshal and assistant or deputy state fire
marshals appointed pursuant to Section 13103 of the Health and
Safety Code, provided that the primary duty of these peace officers
shall be the enforcement of the law as that duty is set forth in
Section 13104 of that code.

(f) Inspectors of the food and drug section designated by the
chief pursuant to subdivision (a) of Section 106500 of the Health
and Safety Code, provided that the primary duty of these peace
officers shall be the enforcement of the law as that duty is set forth
in Section 106500 of that code.

(g) All investigators of the Division of Labor Standards
Enforcement designated by the Labor Commissioner, provided
that the primary duty of these peace officers shall be the
enforcement of the law as prescribed in Section 95 of the Labor
Code.

(h) All investigators of the State Departments of Health Care
Services, Public Health, Social Services, State Hospitals, and
Alcohol and Drug Programs, the Department of Toxic Substances
Control, the Office of Statewide Health Planning and Development,
and the Public Employees’ Retirement System, provided that the
primary duty of these peace officers shall be the enforcement of
the law relating to the duties of his or her department or office.
Notwithstanding any other provision of law, investigators of the
Public Employees’ Retirement System shall not carry firearms.

(i) The Chief of the Bureau of Fraudulent Claims of the
Department of Insurance and those investigators designated by the
chief, provided that the primary duty of those investigators shall
be the enforcement of Section 550.

(j) Employees of the Department of Housing and Community
Development designated under Section 18023 of the Health and
Safety Code, provided that the primary duty of these peace officers
shall be the enforcement of the law as that duty is set forth in
Section 18023 of that code.

(k) Investigators of the office of the Controller, provided that
the primary duty of these investigators shall be the enforcement
of the law relating to the duties of that office. Notwithstanding any
other law, except as authorized by the Controller, the peace officers
designated pursuant to this subdivision shall not carry firearms.

(l) Investigators of the Department of Business Oversight
designated by the Commissioner of Business Oversight, provided
that the primary duty of these investigators shall be the enforcement
of the provisions of law administered by the Department of
Business Oversight. Notwithstanding any other provision of law,
the peace officers designated pursuant to this subdivision shall not
carry firearms.

(m) Persons employed by the begin delete Contractors end delete begin insert Contractors’ end insert State
License Board designated by the Director of Consumer Affairs
pursuant to Section 7011.5 of the Business and Professions Code,
provided that the primary duty of these persons shall be the
enforcement of the law as that duty is set forth in Section 7011.5,
and in Chapter 9 (commencing with Section 7000) of Division 3,
of that code. The Director of Consumer Affairs may designate as
peace officers not more than 12 persons who shall at the time of
their designation be assigned to the special investigations unit of
the board. Notwithstanding any other provision of law, the persons
designated pursuant to this subdivision shall not carry firearms.

(n) The Chief and coordinators of the Law Enforcement Branch
of the Office of Emergency Services.

(o) Investigators of the office of the Secretary of State designated
by the Secretary of State, provided that the primary duty of these
peace officers shall be the enforcement of the law as prescribed
in Chapter 3 (commencing with Section 8200) of Division 1 of
Title 2 of, and Section 12172.5 of, the Government Code.
Notwithstanding any other provision of law, the peace officers
designated pursuant to this subdivision shall not carry firearms.

(p) The Deputy Director for Security designated by Section
8880.38 of the Government Code, and all lottery security personnel
assigned to the California State Lottery and designated by the
director, provided that the primary duty of any of those peace
officers shall be the enforcement of the laws related to begin delete assuring end delete
begin insert ensuring end insert the integrity, honesty, and fairness of the operation and
administration of the California State Lottery.

(q) (1) Investigators employed by the Investigation Division
of the Employment Development Department designated by the
director of the department, provided that the primary duty of those
peace officers shall be the enforcement of the law as that duty is
set forth in Section 317 of the Unemployment Insurance Code.

(2) Notwithstanding any other provision of law, the peace
officers designated pursuant to this subdivision shall not carry
firearms.

(r) The chief and assistant chief of museum security and safety
of the California Science Center, as designated by the executive
director pursuant to Section 4108 of the Food and Agricultural
Code, provided that the primary duty of those peace officers shall
be the enforcement of the law as that duty is set forth in Section
4108 of the Food and Agricultural Code.

(s) Employees of the Franchise Tax Board designated by the
board, provided that the primary duty of these peace officers shall
be the enforcement of the law as set forth in Chapter 9
(commencing with Section 19701) of Part 10.2 of Division 2 of
the Revenue and Taxation Code.

(t) (1) Notwithstanding any other provision of this section, a
peace officer authorized by this section shall not be authorized to
carry firearms by his or her employing agency until that agency
has adopted a policy on the use of deadly force by those peace
officers, and until those peace officers have been instructed in the
employing agency’s policy on the use of deadly force.

(2) Every peace officer authorized pursuant to this section to
carry firearms by his or her employing agency shall qualify in the
use of the firearms at least every six months.

(u) Investigators of the Department of Managed Health Care
designated by the Director of the Department of Managed Health
Care, provided that the primary duty of these investigators shall
be the enforcement of the provisions of laws administered by the
Director of the Department of Managed Health Care.
Notwithstanding any other provision of law, the peace officers
designated pursuant to this subdivision shall not carry firearms.

(v) The Chief, Deputy Chief, supervising investigators, and
investigators of the Office of Protective Services of the State
Department of Developmental Services, provided that the primary
duty of each of those persons shall be the enforcement of the law
relating to the duties of his or her department or office.

(w) This section shall become inoperative on July 1, 2014, and,
as of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.

begin delete SEC. 8. end delete
begin insert SEC. 9. end insert   

Section 830.3 of the Penal Code, as added by Section
38 of Chapter 515 of the Statutes of 2013, is amended to read:

830.3.  

The following persons are peace officers whose authority
extends to any place in the state for the purpose of performing
their primary duty or when making an arrest pursuant to Section
836 as to any public offense with respect to which there is
immediate danger to person or property, or of the escape of the
perpetrator of that offense, or pursuant to Section 8597 or 8598 of
the Government Code. These peace officers may carry firearms
only if authorized and under those terms and conditions as specified
by their employing agencies:

(a) Persons employed by the Division of Investigation of the
Department of Consumer Affairs and investigators of the Board
of Dental Examiners, who are designated by the Director of
Consumer Affairs, provided that the primary duty of these peace
officers shall be the enforcement of the law as that duty is set forth
in Section 160 of the Business and Professions Code.

(b) Voluntary fire wardens designated by the Director of
Forestry and Fire Protection pursuant to Section 4156 of the Public
Resources Code, provided that the primary duty of these peace
officers shall be the enforcement of the law as that duty is set forth
in Section 4156 of that code.

(c) Employees of the Department of Motor Vehicles designated
in Section 1655 of the Vehicle Code, provided that the primary
duty of these peace officers shall be the enforcement of the law as
that duty is set forth in Section 1655 of that code.

(d) Investigators of the California Horse Racing Board
designated by the board, provided that the primary duty of these
peace officers shall be the enforcement of Chapter 4 (commencing
with Section 19400) of Division 8 of the Business and Professions
Code and Chapter 10 (commencing with Section 330) of Title 9
of Part 1 of this code.

(e) The State Fire Marshal and assistant or deputy state fire
marshals appointed pursuant to Section 13103 of the Health and
Safety Code, provided that the primary duty of these peace officers
shall be the enforcement of the law as that duty is set forth in
Section 13104 of that code.

(f) Inspectors of the food and drug section designated by the
chief pursuant to subdivision (a) of Section 106500 of the Health
and Safety Code, provided that the primary duty of these peace
officers shall be the enforcement of the law as that duty is set forth
in Section 106500 of that code.

(g) All investigators of the Division of Labor Standards
Enforcement designated by the Labor Commissioner, provided
that the primary duty of these peace officers shall be the
enforcement of the law as prescribed in Section 95 of the Labor
Code.

(h) All investigators of the State Departments of Health Care
Services, Public Health, Social Services, State Hospitals, and
Alcohol and Drug Programs, the Department of Toxic Substances
Control, the Office of Statewide Health Planning and Development,
and the Public Employees’ Retirement System, provided that the
primary duty of these peace officers shall be the enforcement of
the law relating to the duties of his or her department or office.
Notwithstanding any other provision of law, investigators of the
Public Employees’ Retirement System shall not carry firearms.

(i) The Chief of the Bureau of Fraudulent Claims of the
Department of Insurance and those investigators designated by the
chief, provided that the primary duty of those investigators shall
be the enforcement of Section 550.

(j) Employees of the Department of Housing and Community
Development designated under Section 18023 of the Health and
Safety Code, provided that the primary duty of these peace officers
shall be the enforcement of the law as that duty is set forth in
Section 18023 of that code.

(k) Investigators of the office of the Controller, provided that
the primary duty of these investigators shall be the enforcement
of the law relating to the duties of that office. Notwithstanding any
other law, except as authorized by the Controller, the peace officers
designated pursuant to this subdivision shall not carry firearms.

(l) Investigators of the Department of Business Oversight
designated by the Commissioner of Business Oversight, provided
that the primary duty of these investigators shall be the enforcement
of the provisions of law administered by the Department of
Business Oversight. Notwithstanding any other provision of law,
the peace officers designated pursuant to this subdivision shall not
carry firearms.

(m) Persons employed by the begin delete Contractors end delete begin insert Contractors’ end insert State
License Board designated by the Director of Consumer Affairs
pursuant to Section 7011.5 of the Business and Professions Code,
provided that the primary duty of these persons shall be the
enforcement of the law as that duty is set forth in Section 7011.5,
and in Chapter 9 (commencing with Section 7000) of Division 3,
of that code. The Director of Consumer Affairs may designate as
peace officers not more than 12 persons who shall at the time of
their designation be assigned to the special investigations unit of
the board. Notwithstanding any other provision of law, the persons
designated pursuant to this subdivision shall not carry firearms.

(n) The Chief and coordinators of the Law Enforcement Branch
of the Office of Emergency Services.

(o) Investigators of the office of the Secretary of State designated
by the Secretary of State, provided that the primary duty of these
peace officers shall be the enforcement of the law as prescribed
in Chapter 3 (commencing with Section 8200) of Division 1 of
Title 2 of, and Section 12172.5 of, the Government Code.
Notwithstanding any other provision of law, the peace officers
designated pursuant to this subdivision shall not carry firearms.

(p) The Deputy Director for Security designated by Section
8880.38 of the Government Code, and all lottery security personnel
assigned to the California State Lottery and designated by the
director, provided that the primary duty of any of those peace
officers shall be the enforcement of the laws related to begin delete assuring end delete
begin insert ensuring end insert the integrity, honesty, and fairness of the operation and
administration of the California State Lottery.

(q) (1) Investigators employed by the Investigation Division
of the Employment Development Department designated by the
director of the department, provided that the primary duty of those
peace officers shall be the enforcement of the law as that duty is
set forth in Section 317 of the Unemployment Insurance Code.

(2) Notwithstanding any other provision of law, the peace
officers designated pursuant to this subdivision shall not carry
firearms.

(r) The chief and assistant chief of museum security and safety
of the California Science Center, as designated by the executive
director pursuant to Section 4108 of the Food and Agricultural
Code, provided that the primary duty of those peace officers shall
be the enforcement of the law as that duty is set forth in Section
4108 of the Food and Agricultural Code.

(s) Employees of the Franchise Tax Board designated by the
board, provided that the primary duty of these peace officers shall
be the enforcement of the law as set forth in Chapter 9
(commencing with Section 19701) of Part 10.2 of Division 2 of
the Revenue and Taxation Code.

(t) (1) Notwithstanding any other provision of this section, a
peace officer authorized by this section shall not be authorized to
carry firearms by his or her employing agency until that agency
has adopted a policy on the use of deadly force by those peace
officers, and until those peace officers have been instructed in the
employing agency’s policy on the use of deadly force.

(2) Every peace officer authorized pursuant to this section to
carry firearms by his or her employing agency shall qualify in the
use of the firearms at least every six months.

(u) Investigators of the Department of Managed Health Care
designated by the Director of the Department of Managed Health
Care, provided that the primary duty of these investigators shall
be the enforcement of the provisions of laws administered by the
Director of the Department of Managed Health Care.
Notwithstanding any other provision of law, the peace officers
designated pursuant to this subdivision shall not carry firearms.

(v) The Chief, Deputy Chief, supervising investigators, and
investigators of the Office of Protective Services of the State
Department of Developmental Services, provided that the primary
duty of each of those persons shall be the enforcement of the law
relating to the duties of his or her department or office.

(w) This section shall become operative July 1, 2014.

begin delete SEC. 9. end delete
begin insert SEC. 10. end insert   

Section 830.5 of the Penal Code is amended to read:

830.5.  

The following persons are peace officers whose authority
extends to any place in the state while engaged in the performance
of the duties of their respective employment and for the purpose
of carrying out the primary function of their employment or as
required under Sections 8597, 8598, and 8617 of the Government
Code, as amended by Section 44 of Chapter 1124 of the Statutes
of 2002. Except as specified in this section, these peace officers
may carry firearms only if authorized and under those terms and
conditions specified by their employing agency:

(a) A parole officer of the Department of Corrections and
Rehabilitation, or the Department of Corrections and
Rehabilitation, Division of Juvenile Parole Operations, probation
officer, deputy probation officer, or a board coordinating parole
agent employed by the Juvenile Parole Board. Except as otherwise
provided in this subdivision, the authority of these parole or
probation officers shall extend only as follows:

(1) To conditions of parole, probation, mandatory supervision,
or postrelease community supervision by any person in this state
on parole, probation, mandatory supervision, or postrelease
community supervision.

(2) To the escape of any inmate or ward from a state or local
institution.

(3) To the transportation of persons on parole, probation,
mandatory supervision, or postrelease community supervision.

(4) To violations of any penal provisions of law which are
discovered while performing the usual or authorized duties of his
or her employment.

(5) (A) To the rendering of mutual aid to any other law
enforcement agency.

(B) For the purposes of this subdivision, “parole agent” shall
have the same meaning as parole officer of the Department of
Corrections and Rehabilitation or of the Department of Corrections
and Rehabilitation, Division of Juvenile Justice.

(C) Any parole officer of the Department of Corrections and
Rehabilitation, or the Department of Corrections and
Rehabilitation, Division of Juvenile Parole Operations, is
authorized to carry firearms, but only as determined by the director
on a case-by-case or unit-by-unit basis and only under those terms
and conditions specified by the director or chairperson. The
Department of Corrections and Rehabilitation, Division of Juvenile
Justice, shall develop a policy for arming peace officers of the
Department of Corrections and Rehabilitation, Division of Juvenile
Justice, who comprise “high-risk transportation details” or
“high-risk escape details” no later than June 30, 1995. This policy
shall be implemented no later than December 31, 1995.

(D) The Department of Corrections and Rehabilitation, Division
of Juvenile Justice, shall train and arm those peace officers who
comprise tactical teams at each facility for use during “high-risk
escape details.”

(b) A correctional officer employed by the Department of
Corrections and Rehabilitation, or of the Department of Corrections
and Rehabilitation, Division of Juvenile Justice, having custody
of wards or any employee of the Department of Corrections and
Rehabilitation designated by the secretary or any correctional
counselor series employee of the Department of Corrections and
Rehabilitation or any medical technical assistant series employee
designated by the secretary or designated by the secretary and
employed by the State Department of State Hospitals or any
employee of the Board of Parole Hearings designated by the
secretary or employee of the Department of Corrections and
Rehabilitation, Division of Juvenile Justice, designated by the
secretary or any superintendent, supervisor, or employee having
custodial responsibilities in an institution operated by a probation
department, or any transportation officer of a probation department.

(c) The following persons may carry a firearm while not on
duty: a parole officer of the Department of Corrections and
Rehabilitation, or the Department of Corrections and
Rehabilitation, Division of Juvenile Justice, a correctional officer
or correctional counselor employed by the Department of
Corrections and Rehabilitation, or an employee of the Department
of Corrections and Rehabilitation, Division of Juvenile Justice,
having custody of wards or any employee of the Department of
Corrections and Rehabilitation designated by the secretary. A
parole officer of the Juvenile Parole Board may carry a firearm
while not on duty only when so authorized by the chairperson of
the board and only under the terms and conditions specified by
the chairperson. Nothing in this section shall be interpreted to
require licensure pursuant to Section 25400. The director or
chairperson may deny, suspend, or revoke for good cause a
person’s right to carry a firearm under this subdivision. That person
shall, upon request, receive a hearing, as provided for in the
negotiated grievance procedure between the exclusive employee
representative and the Department of Corrections and
Rehabilitation, Division of Juvenile Justice, or the Juvenile Parole
Board, to review the director’s or the chairperson’s decision.

(d) Persons permitted to carry firearms pursuant to this section,
either on or off duty, shall meet the training requirements of Section
832 and shall qualify with the firearm at least quarterly. It is the
responsibility of the individual officer or designee to maintain his
or her eligibility to carry concealable firearms off duty. Failure to
maintain quarterly qualifications by an officer or designee with
any concealable firearms carried off duty shall constitute good
cause to suspend or revoke that person’s right to carry firearms
off duty.

(e) The Department of Corrections and Rehabilitation shall
allow reasonable access to its ranges for officers and designees of
either department to qualify to carry concealable firearms off duty.
The time spent on the range for purposes of meeting the
qualification requirements shall be the person’s own time during
the person’s off-duty hours.

(f) The secretary shall promulgate regulations consistent with
this section.

(g) “High-risk transportation details” and “high-risk escape
details” as used in this section shall be determined by the secretary,
or his or her designee. The secretary, or his or her designee, shall
consider at least the following in determining “high-risk
transportation details” and “high-risk escape details”: protection
of the public, protection of officers, flight risk, and violence
potential of the wards.

(h) “Transportation detail” as used in this section shall include
transportation of wards outside the facility, including, but not
limited to, court appearances, medical trips, and interfacility
transfers.

begin delete SEC. 10. end delete
begin insert SEC. 11. end insert   

Section 3000 of the Penal Code is amended to read:

3000.  

(a) (1) The Legislature finds and declares that the period
immediately following incarceration is critical to successful
reintegration of the offender into society and to positive citizenship.
It is in the interest of public safety for the state to provide for the
effective supervision of and surveillance of parolees, including
the judicious use of revocation actions, and to provide educational,
vocational, family and personal counseling necessary to assist
parolees in the transition between imprisonment and discharge. A
sentence resulting in imprisonment in the state prison pursuant to
Section 1168 or 1170 shall include a period of parole supervision
or postrelease community supervision, unless waived, or as
otherwise provided in this article.

(2) The Legislature finds and declares that it is not the intent of
this section to diminish resources allocated to the Department of
Corrections and Rehabilitation for parole functions for which the
department is responsible. It is also not the intent of this section
to diminish the resources allocated to the Board of Parole Hearings
to execute its duties with respect to parole functions for which the
board is responsible.

(3) The Legislature finds and declares that diligent effort must
be made to ensure that parolees are held accountable for their
criminal behavior, including, but not limited to, the satisfaction of
restitution fines and orders.

(4) For any person subject to a sexually violent predator
proceeding pursuant to Article 4 (commencing with Section 6600)
of Chapter 2 of Part 2 of Division 6 of the Welfare and Institutions
Code, an order issued by a judge pursuant to Section 6601.5 of the
Welfare and Institutions Code, finding that the petition, on its face,
supports a finding of probable cause to believe that the individual
named in the petition is likely to engage in sexually violent
predatory criminal behavior upon his or her release, shall toll the
period of parole of that person, from the date that person is released
by the Department of Corrections and Rehabilitation as follows:

(A) If the person is committed to the State Department of State
Hospitals as a sexually violent predator and subsequently a court
orders that the person be unconditionally discharged, the parole
period shall be tolled until the date the judge enters the order
unconditionally discharging that person.

(B) If the person is not committed to the State Department of
State Hospitals as a sexually violent predator, the tolling of the
parole period shall be abrogated and the parole period shall be
deemed to have commenced on the date of release from the
Department of Corrections and Rehabilitation.

(5) Paragraph (4) applies to persons released by the Department
of Corrections and Rehabilitation on or after January 1, 2012.
Persons released by the Department of Corrections and
Rehabilitation prior to January 1, 2012, shall continue to be subject
to the law governing the tolling of parole in effect on December
31, 2011.

(b) Notwithstanding any provision to the contrary in Article 3
(commencing with Section 3040) of this chapter, the following
shall apply to any inmate subject to Section 3000.08:

(1) In the case of any inmate sentenced under Section 1168 for
a crime committed prior to July 1, 2013, the period of parole shall
not exceed five years in the case of an inmate imprisoned for any
offense other than first or second degree murder for which the
inmate has received a life sentence, and shall not exceed three
years in the case of any other inmate, unless in either case the
Board of Parole Hearings for good cause waives parole and
discharges the inmate from custody of the department. This
subdivision shall also be applicable to inmates who committed
crimes prior to July 1, 1977, to the extent specified in Section
1170.2. In the case of any inmate sentenced under Section 1168
for a crime committed on or after July 1, 2013, the period of parole
shall not exceed five years in the case of an inmate imprisoned for
any offense other than first or second degree murder for which the
inmate has received a life sentence, and shall not exceed three
years in the case of any other inmate, unless in either case the
department for good cause waives parole and discharges the inmate
from custody of the department.

(2) (A) For a crime committed prior to July 1, 2013, at the
expiration of a term of imprisonment of one year and one day, or
a term of imprisonment imposed pursuant to Section 1170 or at
the expiration of a term reduced pursuant to Section 2931 or 2933,
if applicable, the inmate shall be released on parole for a period
not exceeding three years, except that any inmate sentenced for
an offense specified in paragraph (3), (4), (5), (6), (11), or (18) of
subdivision (c) of Section 667.5 shall be released on parole for a
period not exceeding 10 years, unless a longer period of parole is
specified in Section 3000.1.

(B) For a crime committed on or after July 1, 2013, at the
expiration of a term of imprisonment of one year and one day, or
a term of imprisonment imposed pursuant to Section 1170 or at
the expiration of a term reduced pursuant to Section 2931 or 2933,
if applicable, the inmate shall be released on parole for a period
of three years, except that any inmate sentenced for an offense
specified in paragraph (3), (4), (5), (6), (11), or (18) of subdivision
(c) of Section 667.5 shall be released on parole for a period of 10
years, unless a longer period of parole is specified in Section
3000.1.

(3) Notwithstanding paragraphs (1) and (2), in the case of any
offense for which the inmate has received a life sentence pursuant
to subdivision (b) of Section 209, with the intent to commit a
specified sex offense, or Section 667.51, 667.61, or 667.71, the
period of parole shall be 10 years, unless a longer period of parole
is specified in Section 3000.1.

(4) (A) Notwithstanding paragraphs (1) to (3), inclusive, in the
case of a person convicted of and required to register as a sex
offender for the commission of an offense specified in Section
261, 262, 264.1, 286, 288a, paragraph (1) of subdivision (b) of
Section 288, Section 288.5, or 289, in which one or more of the
victims of the offense was a child under 14 years of age, the period
of parole shall be 20 years and six months unless the board, for
good cause, determines that the person will be retained on parole.
The board shall make a written record of this determination and
transmit a copy of it to the parolee.

(B) In the event of a retention on parole, the parolee shall be
entitled to a review by the board each year thereafter.

(C) There shall be a board hearing consistent with the procedures
set forth in Sections 3041.5 and 3041.7 within 12 months of the
date of any revocation of parole to consider the release of the
inmate on parole, and notwithstanding the provisions of paragraph
(3) of subdivision (b) of Section 3041.5, there shall be annual
parole consideration hearings thereafter, unless the person is
released or otherwise ineligible for parole release. The panel or
board shall release the person within one year of the date of the
revocation unless it determines that the circumstances and gravity
of the parole violation are such that consideration of the public
safety requires a more lengthy period of incarceration or unless
there is a new prison commitment following a conviction.

(D) The provisions of Section 3042 shall not apply to any
hearing held pursuant to this subdivision.

(5) (A) The Board of Parole Hearings shall consider the request
of any inmate whose commitment offense occurred prior to July
1, 2013, regarding the length of his or her parole and the conditions
thereof.

(B) For an inmate whose commitment offense occurred on or
after July 1, 2013, except for those inmates described in Section
3000.1, the department shall consider the request of the inmate
regarding the length of his or her parole and the conditions thereof.
For those inmates described in Section 3000.1, the Board of Parole
Hearings shall consider the request of the inmate regarding the
length of his or her parole and the conditions thereof.

(6) Upon successful completion of parole, or at the end of the
maximum statutory period of parole specified for the inmate under
paragraph (1), (2), (3), or (4), as the case may be, whichever is
earlier, the inmate shall be discharged from custody. The date of
the maximum statutory period of parole under this subdivision and
paragraphs (1), (2), (3), and (4) shall be computed from the date
of initial parole and shall be a period chronologically determined.
Time during which parole is suspended because the prisoner has
absconded or has been returned to custody as a parole violator
shall not be credited toward any period of parole unless the prisoner
is found not guilty of the parole violation. However, the period of
parole is subject to the following:

(A) Except as provided in Section 3064, in no case may a
prisoner subject to three years on parole be retained under parole
supervision or in custody for a period longer than four years from
the date of his or her initial parole.

(B) Except as provided in Section 3064, in no case may a
prisoner subject to five years on parole be retained under parole
supervision or in custody for a period longer than seven years from
the date of his or her initial parole.

(C) Except as provided in Section 3064, in no case may a
prisoner subject to 10 years on parole be retained under parole
supervision or in custody for a period longer than 15 years from
the date of his or her initial parole.

(7) The Department of Corrections and Rehabilitation shall meet
with each inmate at least 30 days prior to his or her good time
release date and shall provide, under guidelines specified by the
parole authority or the department, whichever is applicable, the
conditions of parole and the length of parole up to the maximum
period of time provided by law. The inmate has the right to
reconsideration of the length of parole and conditions thereof by
the department or the parole authority, whichever is applicable.
The Department of Corrections and Rehabilitation or the board
may impose as a condition of parole that a prisoner make payments
on the prisoner’s outstanding restitution fines or orders imposed
pursuant to subdivision (a) or (c) of Section 13967 of the
Government Code, as operative prior to September 28, 1994, or
subdivision (b) or (f) of Section 1202.4.

(8) For purposes of this chapter, and except as otherwise
described in this section, the board shall be considered the parole
authority.

(9) (A)  On and after July 1, 2013, the sole authority to issue
warrants for the return to actual custody of any state prisoner
released on parole rests with the court pursuant to Section 1203.2,
except for any escaped state prisoner or any state prisoner released
prior to his or her scheduled release date who should be returned
to custody, and Section 5054.1 shall apply.

(B) Notwithstanding subparagraph (A), any warrant issued by
the Board of Parole Hearings prior to July 1, 2013, shall remain
in full force and effect until the warrant is served or it is recalled
by the board. All prisoners on parole arrested pursuant to a warrant
issued by the board shall be subject to a review by the board prior
to the department filing a petition with the court to revoke the
parole of the petitioner.

(10) It is the intent of the Legislature that efforts be made with
respect to persons who are subject to Section 290.011 who are on
parole to engage them in treatment.

begin delete SEC. 11. end delete
begin insert SEC. 12. end insert   

Section 2356 of the Probate Code is amended to read:

2356.  

(a) No ward or conservatee may be placed in a mental
health treatment facility under this division against the will of the
ward or conservatee. Involuntary civil placement of a ward or
conservatee in a mental health treatment facility may be obtained
only pursuant to Chapter 2 (commencing with Section 5150) or
Chapter 3 (commencing with Section 5350) of Part 1 of Division
5 of the Welfare and Institutions Code. Nothing in this subdivision
precludes the placing of a ward in a state hospital under Section
6000 of the Welfare and Institutions Code upon application of the
guardian as provided in that section. The Director of State Hospitals
shall adopt and issue regulations defining “mental health treatment
facility” for the purposes of this subdivision.

(b) No experimental drug as defined in Section 111515 of the
Health and Safety Code may be prescribed for or administered to
a ward or conservatee under this division. Such an experimental
drug may be prescribed for or administered to a ward or
conservatee only as provided in Article 4 (commencing with
Section 111515) of Chapter 6 of Part 5 of Division 104 of the
Health and Safety Code.

(c) No convulsive treatment as defined in Section 5325 of the
Welfare and Institutions Code may be performed on a ward or
conservatee under this division. Convulsive treatment may be
performed on a ward or conservatee only as provided in Article 7
(commencing with Section 5325) of Chapter 2 of Part 1 of Division
5 of the Welfare and Institutions Code.

(d) No minor may be sterilized under this division.

(e) This chapter is subject to a valid and effective advance health
care directive under the Health Care Decisions Law (Division 4.7
(commencing with Section 4600)).

begin delete SEC. 12. end delete
begin insert SEC. 13. end insert   

Section 736 of the Welfare and Institutions Code is
amended to read:

736.  

(a) Except as provided in Section 733, the Department
of Corrections and Rehabilitation, Division of Juvenile Facilities,
shall accept a ward committed to it pursuant to this article if the
Director of the Division of Juvenile Justice believes that the ward
can be materially benefited by the division’s reformatory and
educational discipline, and if the division has adequate facilities,
staff, and programs to provide that care. A ward subject to this
section shall not be transported to any facility under the jurisdiction
of the division until the superintendent of the facility has notified
the committing court of the place to which that ward is to be
transported and the time at which he or she can be received.

(b) To determine who is best served by the Division of Juvenile
Facilities, and who would be better served by the State Department
of State Hospitals, the Director of the Division of Juvenile Justice
and the Director of State Hospitals shall, at least annually, confer
and establish policy with respect to the types of cases that should
be the responsibility of each department.

begin delete SEC. 13. end delete
begin insert SEC. 14. end insert   

Section 5328.15 of the Welfare and Institutions Code
is amended to read:

5328.15.  

All information and records obtained in the course
of providing services under Division 5 (commencing with Section
5000), Division 6 (commencing with Section 6000), or Division
7 (commencing with Section 7000), to either voluntary or
involuntary recipients of services shall be confidential. Information
and records may be disclosed, however, notwithstanding any other
provision of law, as follows:

(a) To authorized licensing personnel who are employed by, or
who are authorized representatives of, the State Department of
Public Health, and who are licensed or registered health
professionals, and to authorized legal staff or special investigators
who are peace officers who are employed by, or who are authorized
representatives of the State Department of Social Services, as
necessary to the performance of their duties to inspect, license,
and investigate health facilities and community care facilities and
to ensure that the standards of care and services provided in such
facilities are adequate and appropriate and to ascertain compliance
with the rules and regulations to which the facility is subject. The
confidential information shall remain confidential except for
purposes of inspection, licensing, or investigation pursuant to
Chapter 2 (commencing with Section 1250) of, and Chapter 3
(commencing with Section 1500) of, Division 2 of the Health and
Safety Code, or a criminal, civil, or administrative proceeding in
relation thereto. The confidential information may be used by the
State Department of Public Health or the State Department of
Social Services in a criminal, civil, or administrative proceeding.
The confidential information shall be available only to the judge
or hearing officer and to the parties to the case. Names which are
confidential shall be listed in attachments separate to the general
pleadings. The confidential information shall be sealed after the
conclusion of the criminal, civil, or administrative hearings, and
shall not subsequently be released except in accordance with this
subdivision. If the confidential information does not result in a
criminal, civil, or administrative proceeding, it shall be sealed after
the State Department of Public Health or the State Department of
Social Services decides that no further action will be taken in the
matter of suspected licensing violations. Except as otherwise
provided in this subdivision, confidential information in the
possession of the State Department of Public Health or the State
Department of Social Services shall not contain the name of the
patient.

(b) To any board which licenses and certifies professionals in
the fields of mental health pursuant to state law, when the Director
of State Hospitals has reasonable cause to believe that there has
occurred a violation of any provision of law subject to the
jurisdiction of that board and the records are relevant to the
violation. This information shall be sealed after a decision is
reached in the matter of the suspected violation, and shall not
subsequently be released except in accordance with this
subdivision. Confidential information in the possession of the
board shall not contain the name of the patient.

(c) To a protection and advocacy agency established pursuant
to Section 4901, to the extent that the information is incorporated
within any of the following:

(1) An unredacted facility evaluation report form or an
unredacted complaint investigation report form of the State
Department of Social Services. This information shall remain
confidential and subject to the confidentiality requirements of
subdivision (f) of Section 4903.

(2) An unredacted citation report, unredacted licensing report,
unredacted survey report, unredacted plan of correction, or
unredacted statement of deficiency of the State Department of
Public Health, prepared by authorized licensing personnel or
authorized representatives described in subdivision (n). This
information shall remain confidential and subject to the
confidentiality requirements of subdivision (f) of Section 4903.

begin delete SEC. 14. end delete
begin insert SEC. 15. end insert   

Section 6000 of the Welfare and Institutions Code is
amended to read:

6000.  

(a) Pursuant to applicable rules and regulations
established by the State Department of State Hospitals or the State
Department of Developmental Services, the medical director of a
state hospital for the mentally disordered or developmentally
disabled may receive in such hospital, as a boarder and patient,
any person who is a suitable person for care and treatment in such
hospital, upon receipt of a written application for the admission
of the person into the hospital for care and treatment made in
accordance with the following requirements:

(1) In the case of an adult person, the application shall be made
voluntarily by the person, at a time when he begin insert or she end insert is in such
condition of mind as to render him begin insert or her end insert competent to make it
or, if he begin insert or she end insert is a conservatee with a conservator of the person
or person and estate who was appointed under Chapter 3
(commencing with Section 5350) of Part 1 of Division 5 with the
right as specified by court order under Section 5358 to place his
begin insert or her end insert conservatee in a state hospital, by his begin insert or her end insert conservator.

(2) (A) In the case of a minor person, the application shall be
made by his begin insert or her end insert parents, or by the parent, guardian, conservator,
or other person entitled to his begin insert or her end insert custody to any of such mental
hospitals as may be designated by the Director of State Hospitals
or the Director of Developmental Services to admit minors on
voluntary applications. If the minor has a conservator of the person,
or the person and the estate, appointed under Chapter 3
(commencing with Section 5350) of Part 1 of Division 5, with the
right as specified by court order under Section 5358 to place the
conservatee in a state hospital the application for the minor shall
be made by his begin insert or her end insert conservator.

(B) Any person received in a state hospital shall be deemed a
voluntary patient.

(C) Upon the admission of a voluntary patient to a state hospital
the medical director shall immediately forward to the office of the
State Department of State Hospitals or the State Department of
Developmental Services the record of such voluntary patient,
showing the name, residence, age, sex, place of birth, occupation,
civil condition, date of admission of such patient to such hospital,
and such other information as is required by the rules and
regulations of the department.

(D) The charges for the care and keeping of a mentally
disordered person in a state hospital shall be governed by the
provisions of Article 4 (commencing with Section 7275) of Chapter
3 of Division 7 relating to the charges for the care and keeping of
mentally disordered persons in state hospitals.

(E) A voluntary adult patient may leave the hospital or institution
at any time by giving notice of his begin insert or her end insert desire to leave to any
member of the hospital staff and completing normal hospitalization
departure procedures. A conservatee may leave in a like manner
if notice is given by his begin insert or her end insert conservator.

(F) A minor person who is a voluntary patient may leave the
hospital or institution after completing normal hospitalization
departure procedures after notice is given to the superintendent or
person in charge by the parents, or the parent, guardian,
conservator, or other person entitled to the custody of the minor,
of their desire to remove him begin insert or her end insert from the hospital.

(G) No person received into a state hospital, private mental
institution, or county psychiatric hospital as a voluntary patient
during his begin insert or her end insert minority shall be detained therein after he begin insert or she end insert
reaches the age of majority, but any such person, after attaining
the age of majority, may apply for admission into the hospital or
institution for care and treatment in the manner prescribed in this
section for applications by adult persons.

(b) The State Department of State Hospitals or the State
Department of Developmental Services shall establish such rules
and regulations as are necessary to carry out properly the provisions
of this section.

(c) Commencing July 1, 2012, the department shall not admit
any person to a developmental center pursuant to this section.

begin delete SEC. 15. end delete
begin insert SEC. 16. end insert   

Section 6002 of the Welfare and Institutions Code is
amended to read:

6002.  

(a) The person in charge of any private institution,
hospital, clinic, or sanitarium which is conducted for, or includes
a department or ward conducted for, the care and treatment of
persons who are mentally disordered may receive therein as a
voluntary patient any person suffering from a mental disorder who
is a suitable person for care and treatment in the institution,
hospital, clinic, or sanitarium who voluntarily makes a written
application to the person in charge for admission into the
institution, hospital, clinic, or sanitarium, and who is at the time
of making the application mentally competent to make the
application. A conservatee, with a conservator of the person, or
person and estate, appointed under Chapter 3 (commencing with
Section 5350) of Part 1 of Division 5, with the right as specified
by court order under Section 5358 to place his begin insert or her end insert conservatee,
may be admitted upon written application by his begin insert or her end insert conservator.

(b) After the admission of a voluntary patient to a private
institution, hospital, clinic, or sanitarium the person in charge shall
forward to the office of the State Department of State Hospitals a
record of the voluntary patient showing such information as may
be required by rule by the department.

(c) A voluntary adult patient may leave the hospital, clinic, or
institution at any time by giving notice of his begin insert or her end insert desire to leave
to any member of the hospital staff and completing normal
hospitalization departure procedures. A conservatee may leave in
a like manner if notice is given by his begin insert or her end insert conservator.

begin delete SEC. 16. end delete
begin insert SEC. 17. end insert   

Section 6600 of the Welfare and Institutions Code is
amended to read:

6600.  

As used in this article, the following terms have the
following meanings:

(a) (1) “Sexually violent predator” means a person who has
been convicted of a sexually violent offense against one or more
victims and who has a diagnosed mental disorder that makes the
person a danger to the health and safety of others in that it is likely
that he or she will engage in sexually violent criminal behavior.

(2) For purposes of this subdivision any of the following shall
be considered a conviction for a sexually violent offense:

(A) A prior or current conviction that resulted in a determinate
prison sentence for an offense described in subdivision (b).

(B) A conviction for an offense described in subdivision (b)
that was committed prior to July 1, 1977, and that resulted in an
indeterminate prison sentence.

(C) A prior conviction in another jurisdiction for an offense that
includes all of the elements of an offense described in subdivision
(b).

(D) A conviction for an offense under a predecessor statute that
includes all of the elements of an offense described in subdivision
(b).

(E) A prior conviction for which the inmate received a grant of
probation for an offense described in subdivision (b).

(F) A prior finding of not guilty by reason of insanity for an
offense described in subdivision (b).

(G) A conviction resulting in a finding that the person was a
mentally disordered sex offender.

(H) A prior conviction for an offense described in subdivision
(b) for which the person was committed to the Division of Juvenile
Facilities, Department of Corrections and Rehabilitation pursuant
to Section 1731.5.

(I) A prior conviction for an offense described in subdivision
(b) that resulted in an indeterminate prison sentence.

(3) Conviction of one or more of the crimes enumerated in this
section shall constitute evidence that may support a court or jury
determination that a person is a sexually violent predator, but shall
not be the sole basis for the determination. The existence of any
prior convictions may be shown with documentary evidence. The
details underlying the commission of an offense that led to a prior
conviction, including a predatory relationship with the victim, may
be shown by documentary evidence, including, but not limited to,
preliminary hearing transcripts, trial transcripts, probation and
sentencing reports, and evaluations by the State Department of
State Hospitals. Jurors shall be admonished that they may not find
a person a sexually violent predator based on prior offenses absent
relevant evidence of a currently diagnosed mental disorder that
makes the person a danger to the health and safety of others in that
it is likely that he or she will engage in sexually violent criminal
behavior.

(4) The provisions of this section shall apply to any person
against whom proceedings were initiated for commitment as a
sexually violent predator on or after January 1, 1996.

(b) “Sexually violent offense” means the following acts when
committed by force, violence, duress, menace, fear of immediate
and unlawful bodily injury on the victim or another person, or
threatening to retaliate in the future against the victim or any other
person, and that are committed on, before, or after the effective
date of this article and result in a conviction or a finding of not
guilty by reason of insanity, as defined in subdivision (a): a felony
violation of Section 261, 262, 264.1, 269, 286, 288, 288a, 288.5,
or 289 of the Penal Code, or any felony violation of Section 207,
209, or 220 of the Penal Code, committed with the intent to commit
a violation of Section 261, 262, 264.1, 286, 288, 288a, or 289 of
the Penal Code.

(c) “Diagnosed mental disorder” includes a congenital or
acquired condition affecting the emotional or volitional capacity
that predisposes the person to the commission of criminal sexual
acts in a degree constituting the person a menace to the health and
safety of others.

(d) “Danger to the health and safety of others” does not require
proof of a recent overt act while the offender is in custody.

(e) “Predatory” means an act is directed toward a stranger, a
person of casual acquaintance with whom no substantial
relationship exists, or an individual with whom a relationship has
been established or promoted for the primary purpose of
victimization.

(f) “Recent overt act” means any criminal act that manifests a
likelihood that the actor may engage in sexually violent predatory
criminal behavior.

(g) Notwithstanding any other provision of law and for purposes
of this section, a prior juvenile adjudication of a sexually violent
offense may constitute a prior conviction for which the person
received a determinate term if all of the following apply:

(1) The juvenile was 16 years of age or older at the time he or
she committed the prior offense.

(2) The prior offense is a sexually violent offense as specified
in subdivision (b).

(3) The juvenile was adjudged a ward of the juvenile court
within the meaning of Section 602 because of the person’s
commission of the offense giving rise to the juvenile court
adjudication.

(4) The juvenile was committed to the Division of Juvenile
Facilities, Department of Corrections and Rehabilitation for the
sexually violent offense.

(h) A minor adjudged a ward of the court for commission of an
offense that is defined as a sexually violent offense shall be entitled
to specific treatment as a sexual offender. The failure of a minor
to receive that treatment shall not constitute a defense or bar to a
determination that any person is a sexually violent predator within
the meaning of this article.

begin delete SEC. 17. end delete
begin insert SEC. 18. end insert   

Section 6601 of the Welfare and Institutions Code is
amended to read:

6601.  

(a) (1) Whenever the Secretary of the Department of
Corrections and Rehabilitation determines that an individual who
is in custody under the jurisdiction of the Department of
Corrections and Rehabilitation, and who is either serving a
determinate prison sentence or whose parole has been revoked,
may be a sexually violent predator, the secretary shall, at least six
months prior to that individual’s scheduled date for release from
prison, refer the person for evaluation in accordance with this
section. However, if the inmate was received by the department
with less than nine months of his or her sentence to serve, or if the
inmate’s release date is modified by judicial or administrative
action, the secretary may refer the person for evaluation in
accordance with this section at a date that is less than six months
prior to the inmate’s scheduled release date.

(2) A petition may be filed under this section if the individual
was in custody pursuant to his or her determinate prison term,
parole revocation term, or a hold placed pursuant to Section 6601.3,
at the time the petition is filed. A petition shall not be dismissed
on the basis of a later judicial or administrative determination that
the individual’s custody was unlawful, if the unlawful custody was
the result of a good faith mistake of fact or law. This paragraph
shall apply to any petition filed on or after January 1, 1996.

(b) The person shall be screened by the Department of
Corrections and Rehabilitation and the Board of Parole Hearings
based on whether the person has committed a sexually violent
predatory offense and on a review of the person’s social, criminal,
and institutional history. This screening shall be conducted in
accordance with a structured screening instrument developed and
updated by the State Department of State Hospitals in consultation
with the Department of Corrections and Rehabilitation. If as a
result of this screening it is determined that the person is likely to
be a sexually violent predator, the Department of Corrections and
Rehabilitation shall refer the person to the State Department of
State Hospitals for a full evaluation of whether the person meets
the criteria in Section 6600.

(c) The State Department of State Hospitals shall evaluate the
person in accordance with a standardized assessment protocol,
developed and updated by the State Department of State Hospitals,
to determine whether the person is a sexually violent predator as
defined in this article. The standardized assessment protocol shall
require assessment of diagnosable mental disorders, as well as
various factors known to be associated with the risk of reoffense
among sex offenders. Risk factors to be considered shall include
criminal and psychosexual history, type, degree, and duration of
sexual deviance, and severity of mental disorder.

(d) Pursuant to subdivision (c), the person shall be evaluated
by two practicing psychiatrists or psychologists, or one practicing
psychiatrist and one practicing psychologist, designated by the
Director of State Hospitals. If both evaluators concur that the
person has a diagnosed mental disorder so that he or she is likely
to engage in acts of sexual violence without appropriate treatment
and custody, the Director of State Hospitals shall forward a request
for a petition for commitment under Section 6602 to the county
designated in subdivision (i). Copies of the evaluation reports and
any other supporting documents shall be made available to the
attorney designated by the county pursuant to subdivision (i) who
may file a petition for commitment.

(e) If one of the professionals performing the evaluation pursuant
to subdivision (d) does not concur that the person meets the criteria
specified in subdivision (d), but the other professional concludes
that the person meets those criteria, the Director of State Hospitals
shall arrange for further examination of the person by two
independent professionals selected in accordance with subdivision
(g).

(f) If an examination by independent professionals pursuant to
subdivision (e) is conducted, a petition to request commitment
under this article shall only be filed if both independent
professionals who evaluate the person pursuant to subdivision (e)
concur that the person meets the criteria for commitment specified
in subdivision (d). The professionals selected to evaluate the person
pursuant to subdivision (g) shall inform the person that the purpose
of their examination is not treatment but to determine if the person
meets certain criteria to be involuntarily committed pursuant to
this article. It is not required that the person appreciate or
understand that information.

(g) Any independent professional who is designated by the
Secretary of the Department of Corrections and Rehabilitation or
the Director of State Hospitals for purposes of this section shall
not be a state government employee, shall have at least five years
of experience in the diagnosis and treatment of mental disorders,
and shall include psychiatrists and licensed psychologists who
have a doctoral degree in psychology. The requirements set forth
in this section also shall apply to any professionals appointed by
the court to evaluate the person for purposes of any other
proceedings under this article.

(h) If the State Department of State Hospitals determines that
the person is a sexually violent predator as defined in this article,
the Director of State Hospitals shall forward a request for a petition
to be filed for commitment under this article to the county
designated in subdivision (i). Copies of the evaluation reports and
any other supporting documents shall be made available to the
attorney designated by the county pursuant to subdivision (i) who
may file a petition for commitment in the superior court.

(i) If the county’s designated counsel concurs with the
recommendation, a petition for commitment shall be filed in the
superior court of the county in which the person was convicted of
the offense for which he or she was committed to the jurisdiction
of the Department of Corrections and Rehabilitation. The petition
shall be filed, and the proceedings shall be handled, by either the
district attorney or the county counsel of that county. The county
board of supervisors shall designate either the district attorney or
the county counsel to assume responsibility for proceedings under
this article.

(j) The time limits set forth in this section shall not apply during
the first year that this article is operative.

(k) An order issued by a judge pursuant to Section 6601.5,
finding that the petition, on its face, supports a finding of probable
cause to believe that the individual named in the petition is likely
to engage in sexually violent predatory criminal behavior upon his
or her release, shall toll that person’s parole pursuant to paragraph
(4) of subdivision (a) of Section 3000 of the Penal Code, if that
individual is determined to be a sexually violent predator.

(l) Pursuant to subdivision (d), the attorney designated by the
county pursuant to subdivision (i) shall notify the State Department
of State Hospitals of its decision regarding the filing of a petition
for commitment within 15 days of making that decision.

(m) This section shall become operative on the date that the
director executes a declaration, which shall be provided to the
fiscal and policy committees of the Legislature, including the
Chairperson of the Joint Legislative Budget Committee, and the
Department of Finance, specifying that sufficient qualified state
employees have been hired to conduct the evaluations required
pursuant to subdivision (d), or January 1, 2013, whichever occurs
first.

begin delete SEC. 18. end delete
begin insert SEC. 19. end insert   

Section 6608.7 of the Welfare and Institutions Code
is amended to read:

6608.7.  

The State Department of State Hospitals may enter
into an interagency agreement or contract with the Department of
Corrections and Rehabilitation or with local law enforcement
agencies for services related to supervision or monitoring of
sexually violent predators who have been conditionally released
into the community under the forensic conditional release program
pursuant to this article.

begin delete SEC. 19. end delete
begin insert SEC. 20. end insert   

Section 6609 of the Welfare and Institutions Code is
amended to read:

6609.  

Within 10 days of a request made by the chief of police
of a city or the sheriff of a county, the State Department of State
Hospitals shall provide the following information concerning each
person committed as a sexually violent predator who is receiving
outpatient care in a conditional release program in that city or
county: name, address, date of commitment, county from which
committed, date of placement in the conditional release program,
fingerprints, and a glossy photograph no smaller than 31⁄8 × 31⁄8
inches in size, or clear copies of the fingerprints and photograph.

begin delete SEC. 20. end delete
begin insert SEC. 21. end insert   

Section 9717 of the Welfare and Institutions Code is
amended to read:

9717.  

(a) All advocacy programs and any programs similar in
nature to the Long-Term Care Ombudsman Program that receive
funding or official designation from the state shall cooperate with
the office, where appropriate. These programs include, but are not
limited to, the Office of Human Rights within the State Department
of State Hospitals, the Office of Patients’ Rights, Disability Rights
California, and the Department of Rehabilitation’s Client
Assistance Program.

(b) The office shall maintain a close working relationship with
the Legal Services Development Program for the Elderly within
the department.

(c) In order to ensure the provision of counsel for patients and
residents of long-term care facilities, the office shall seek to
establish effective coordination with programs that provide legal
services for the elderly, including, but not limited to, programs
that are funded by the federal Legal Services Corporation or under
the federal Older Americans Act (42 U.S.C. Sec. 3001 et seq.), as
amended.

(d) The department and other state departments and programs
that have roles in funding, regulating, monitoring, or serving
long-term care facility residents, including law enforcement
agencies, shall cooperate with and meet with the office periodically
and as needed to address concerns or questions involving the care,
quality of life, safety, rights, health, and well-being of long-term
care facility residents.

begin delete SEC. 21. end delete
begin insert SEC. 22. end insert   

Section 10600.1 of the Welfare and Institutions Code
is amended to read:

10600.1.  

(a) The State Department of Social Services succeeds
to and is vested with the duties, purposes, responsibilities, and
jurisdiction exercised by the State Department of Health or the
State Department of Benefit Payments pursuant to the provisions
of this division, except those contained in Chapter 7 (commencing
with Section 14000), Chapter 8 (commencing with Section 14200),
Chapter 8.5 (commencing with Section 14500), and Chapter 8.7
(commencing with Section 14520) of Part 3, on the date
immediately prior to the date this section becomes operative.

(b) The State Department of Social Services also succeeds to
and is vested with the duties, purposes, responsibilities, and
jurisdiction heretofore exercised by the State Department of Health
with respect to its disability determination function performed
pursuant to Titles II and XVI of the federal Social Security Act;
provided, however, that this paragraph shall not vest in the State
Department of Social Services any power or authority over
programs for aid or rehabilitation of mentally disordered or
developmentally disabled persons administered by the State
Department of State Hospitals or the State Department of
Developmental Services.

begin insert

begin insert SEC. 23. end insert   

end insert

begin insert Section 10725 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

10725.  

The director may adopt regulations, orders, or standards
of general application to implement, interpret, or make specific
the law enforced by the department, and begin delete such end delete begin insert those end insert regulations,
orders, and standards shall be adopted, amended, or repealed by
the director only in accordance with begin delete the provisions of end delete Chapter begin delete 4.5 end delete
begin insert 3.5 end insert (commencing with Section begin delete 11371), end delete begin insert 11340) of end insert Part 1 begin delete , end delete begin insert of end insert
Division 3 begin delete , end delete begin insert of end insert Title 2 of the Government begin delete Code, provided that
regulations end delete begin insert Code. Regulations end insert relating to services need not be
printed in the begin delete California Administrative Code end delete begin insert California Code of
Regulations end insert or begin delete California Administrative Register end delete begin insert the California
Regulatory Notice Register end insert if they are included in the publications
of the department. begin delete Such end delete begin insert This end insert authority also may be exercised by
the director’s designee.

In adopting regulations the director shall strive for clarity of
language begin delete which end delete begin insert that end insert may be readily understood by those
administering services or subject to begin delete such end delete begin insert those end insert regulations.

The rules of the department need not specify or include the detail
of forms, reports begin insert , end insert or records, but shall include the essential
authority by which any person, agency, organization, association begin insert , end insert
or institution subject to the supervision or investigation of the
department is required to use, submit begin insert , end insert or maintain begin delete such end delete begin insert those end insert forms,
reports begin insert , end insert or records.

begin delete SEC. 22. end delete
begin insert SEC. 24. end insert   

Section 14043.26 of the Welfare and Institutions
Code is amended to read:

14043.26.  

(a) (1) On and after January 1, 2004, an applicant
that currently is not enrolled in the Medi-Cal program, or a provider
applying for continued enrollment, upon written notification from
the department that enrollment for continued participation of all
providers in a specific provider of service category or subgroup
of that category to which the provider belongs will occur, or, except
as provided in subdivisions (b) and (e), a provider not currently
enrolled at a location where the provider intends to provide
services, goods, supplies, or merchandise to a Medi-Cal
beneficiary, shall submit a complete application package for
enrollment, continuing enrollment, or enrollment at a new location
or a change in location.

(2) Clinics licensed by the department pursuant to Chapter 1
(commencing with Section 1200) of Division 2 of the Health and
Safety Code and certified by the department to participate in the
Medi-Cal program shall not be subject to this section.

(3) Health facilities licensed by the department pursuant to
Chapter 2 (commencing with Section 1250) of Division 2 of the
Health and Safety Code and certified by the department to
participate in the Medi-Cal program shall not be subject to this
section.

(4) Adult day health care providers licensed pursuant to Chapter
3.3 (commencing with Section 1570) of Division 2 of the Health
and Safety Code and certified by the department to participate in
the Medi-Cal program shall not be subject to this section.

(5) Home health agencies licensed pursuant to Chapter 8
(commencing with Section 1725) of Division 2 of the Health and
Safety Code and certified by the department to participate in the
Medi-Cal program shall not be subject to this section.

(6) Hospices licensed pursuant to Chapter 8.5 (commencing
with Section 1745) of Division 2 of the Health and Safety Code
and certified by the department to participate in the Medi-Cal
program shall not be subject to this section.

(b) A physician and surgeon licensed by the Medical Board of
California or the Osteopathic Medical Board of California, or a
dentist licensed by the Dental Board of California, practicing as
an individual physician practice or as an individual dentist practice,
as defined in Section 14043.1, who is enrolled and in good standing
in the Medi-Cal program, and who is changing locations of that
individual physician practice or individual dentist practice within
the same county, shall be eligible to continue enrollment at the
new location by filing a change of location form to be developed
by the department. The form shall comply with all minimum
federal requirements related to Medicaid provider enrollment.
Filing this form shall be in lieu of submitting a complete
application package pursuant to subdivision (a).

(c) (1) Except as provided in paragraph (2), within 30 days
after receiving an application package submitted pursuant to
subdivision (a), the department shall provide written notice that
the application package has been received and, if applicable, that
there is a moratorium on the enrollment of providers in the specific
provider of service category or subgroup of the category to which
the applicant or provider belongs. This moratorium shall bar further
processing of the application package.

(2) Within 15 days after receiving an application package from
a physician, or a group of physicians, licensed by the Medical
Board of California or the Osteopathic Medical Board of California,
or a change of location form pursuant to subdivision (b), the
department shall provide written notice that the application package
or the change of location form has been received.

(d) (1) If the application package submitted pursuant to
subdivision (a) is from an applicant or provider who meets the
criteria listed in paragraph (2), the applicant or provider shall be
considered a preferred provider and shall be granted preferred
provisional provider status pursuant to this section and for a period
of no longer than 18 months, effective from the date on the notice
from the department. The ability to request consideration as a
preferred provider and the criteria necessary for the consideration
shall be publicized to all applicants and providers. An applicant
or provider who desires consideration as a preferred provider
pursuant to this subdivision shall request consideration from the
department by making a notation to that effect on the application
package, by cover letter, or by other means identified by the
department in a provider bulletin. Request for consideration as a
preferred provider shall be made with each application package
submitted in order for the department to grant the consideration.
An applicant or provider who requests consideration as a preferred
provider shall be notified within 60 days whether the applicant or
provider meets or does not meet the criteria listed in paragraph
(2). If an applicant or provider is notified that the applicant or
provider does not meet the criteria for a preferred provider, the
application package submitted shall be processed in accordance
with the remainder of this section.

(2) To be considered a preferred provider, the applicant or
provider shall meet all of the following criteria:

(A) Hold a current license as a physician and surgeon issued by
the Medical Board of California or the Osteopathic Medical Board
of California, which license shall not have been revoked, whether
stayed or not, suspended, placed on probation, or subject to other
limitation.

(B) Be a current faculty member of a teaching hospital or a
children’s hospital, as defined in Section 10727, accredited by the
Joint Commission or the American Osteopathic Association, or
be credentialed by a health care service plan that is licensed under
the Knox-Keene Health Care Service Plan Act of 1975 (Chapter
2.2 (commencing with Section 1340) of Division 2 of the Health
and Safety Code) or county organized health system, or be a current
member in good standing of a group that is credentialed by a health
care service plan that is licensed under the Knox-Keene Act.

(C) Have full, current, unrevoked, and unsuspended privileges
at a Joint Commission or American Osteopathic Association
accredited general acute care hospital.

(D) Not have any adverse entries in the federal Healthcare
Integrity and Protection Data Bank.

(3) The department may recognize other providers as qualifying
as preferred providers if criteria similar to those set forth in
paragraph (2) are identified for the other providers. The department
shall consult with interested parties and appropriate stakeholders
to identify similar criteria for other providers so that they may be
considered as preferred providers.

(e) (1) If a Medi-Cal applicant meets the criteria listed in
paragraph (2), the applicant shall be enrolled in the Medi-Cal
program after submission and review of a short form application
to be developed by the department. The form shall comply with
all minimum federal requirements related to Medicaid provider
enrollment. The department shall notify the applicant that the
department has received the application within 15 days of receipt
of the application. The department shall enroll the applicant or
notify the applicant that the applicant does not meet the criteria
listed in paragraph (2) within 90 days of receipt of the application.

(2) Notwithstanding any other provision of law, an applicant or
provider who meets all of the following criteria shall be eligible
for enrollment in the Medi-Cal program pursuant to this
subdivision, after submission and review of a short form
application:

(A) The applicant’s or provider’s practice is based in one or
more of the following: a general acute care hospital, a rural general
acute care hospital, or an acute psychiatric hospital, as defined in
subdivisions (a) and (b) of Section 1250 of the Health and Safety
Code.

(B) The applicant or provider holds a current, unrevoked, or
unsuspended license as a physician and surgeon issued by the
Medical Board of California or the Osteopathic Medical Board of
California. An applicant or provider shall not be in compliance
with this subparagraph if a license revocation has been stayed, the
licensee has been placed on probation, or the license is subject to
any other limitation.

(C) The applicant or provider does not have an adverse entry
in the federal Healthcare Integrity and Protection Data Bank.

(3) An applicant shall be granted provisional provider status
under this subdivision for a period of 12 months.

(f) Except as provided in subdivision (g), within 180 days after
receiving an application package submitted pursuant to subdivision
(a), or from the date of the notice to an applicant or provider that
the applicant or provider does not qualify as a preferred provider
under subdivision (d), the department shall give written notice to
the applicant or provider that any of the following applies, or shall
on the 181st day grant the applicant or provider provisional
provider status pursuant to this section for a period no longer than
12 months, effective from the 181st day:

(1) The applicant or provider is being granted provisional
provider status for a period of 12 months, effective from the date
on the notice.

(2) The application package is incomplete. The notice shall
identify additional information or documentation that is needed to
complete the application package.

(3) The department is exercising its authority under Section
14043.37, 14043.4, or 14043.7, and is conducting background
checks, preenrollment inspections, or unannounced visits.

(4) The application package is denied for any of the following
reasons:

(A) Pursuant to Section 14043.2 or 14043.36.

(B) For lack of a license necessary to perform the health care
services or to provide the goods, supplies, or merchandise directly
or indirectly to a Medi-Cal beneficiary, within the applicable
provider of service category or subgroup of that category.

(C) The period of time during which an applicant or provider
has been barred from reapplying has not passed.

(D) For other stated reasons authorized by law.

(E) For failing to submit fingerprints as required by federal
Medicaid regulations.

(F) For failing to pay an application fee as required by federal
Medicaid regulations.

(5) The application package is withdrawn by request of the
applicant or provider and the department’s review is canceled
begin insert pursuant to subdivision (n) end insert .

(g) Notwithstanding subdivision (f), within 90 days after
receiving an application package submitted pursuant to subdivision
(a) from a physician or physician group licensed by the Medical
Board of California or the Osteopathic Medical Board of California,
or from the date of the notice to that physician or physician group
that does not qualify as a preferred provider under subdivision (d),
or within 90 days after receiving a change of location form
submitted pursuant to subdivision (b), the department shall give
written notice to the applicant or provider that either paragraph
(1), (2), (3), (4), or (5) of subdivision (f) applies, or shall on the
91st day grant the applicant or provider provisional provider status
pursuant to this section for a period no longer than 12 months,
effective from the 91st day.

(h) (1) If the application package that was noticed as incomplete
under paragraph (2) of subdivision (f) is resubmitted with all
requested information and documentation, and received by the
department within 60 days of the date on the notice, the department
shall, within 60 days of the resubmission, send a notice that any
of the following applies:

(A) The applicant or provider is being granted provisional
provider status for a period of 12 months, effective from the date
on the notice.

(B) The application package is denied for any other reasons
provided for in paragraph (4) of subdivision (f).

(C) The department is exercising its authority under Section
14043.37, 14043.4, or 14043.7 to conduct background checks,
preenrollment inspections, or unannounced visits.

(2) (A) If the application package that was noticed as
incomplete under paragraph (2) of subdivision (f) is not resubmitted
with all requested information and documentation and received
by the department within 60 days of the date on the notice, the
application package shall be denied by operation of law. The
applicant or provider may reapply by submitting a new application
package that shall be reviewed de novo.

(B) If the failure to resubmit is by a currently enrolled provider
as defined in Section 14043.1, including providers applying for
continued enrollment, the failure may make the provider also
subject to deactivation of the provider’s number and all of the
business addresses used by the provider to provide services, goods,
supplies, or merchandise to Medi-Cal beneficiaries.

(C) Notwithstanding subparagraph (A), if the notice of an
incomplete application package included a request for information
or documentation related to grounds for denial under Section
14043.2 or 14043.36, the applicant or provider shall not reapply
for enrollment or continued enrollment in the Medi-Cal program
or for participation in any health care program administered by
the department or its agents or contractors for a period of three
years.

(i) (1) If the department exercises its authority under Section
14043.37, 14043.4, or 14043.7 to conduct background checks,
preenrollment inspections, or unannounced visits, the applicant or
provider shall receive notice, from the department, after the
conclusion of the background check, preenrollment inspection, or
unannounced visit of either of the following:

(A) The applicant or provider is granted provisional provider
status for a period of 12 months, effective from the date on the
notice.

(B) Discrepancies or failure to meet program requirements, as
prescribed by the department, have been found to exist during the
preenrollment period.

(2) (A) The notice shall identify the discrepancies or failures,
and whether remediation can be made or not, and if so, the time
period within which remediation must be accomplished. Failure
to remediate discrepancies and failures as prescribed by the
department, or notification that remediation is not available, shall
result in denial of the application by operation of law. The applicant
or provider may reapply by submitting a new application package
that shall be reviewed de novo.

(B) If the failure to remediate is by a currently enrolled provider
as defined in Section 14043.1, including providers applying for
continued enrollment, the failure may make the provider also
subject to deactivation of the provider’s number and all of the
business addresses used by the provider to provide services, goods,
supplies, or merchandise to Medi-Cal beneficiaries.

(C) Notwithstanding subparagraph (A), if the discrepancies or
failure to meet program requirements, as prescribed by the director,
included in the notice were related to grounds for denial under
Section 14043.2 or 14043.36, the applicant or provider shall not
reapply for three years.

(j) If provisional provider status or preferred provisional provider
status is granted pursuant to this section, a provider number shall
be used by the provider for each business address for which an
application package has been approved. This provider number
shall be used exclusively for the locations for which it was
approved, unless the practice of the provider’s profession or
delivery of services, goods, supplies, or merchandise is such that
services, goods, supplies, or merchandise are rendered or delivered
at locations other than the provider’s business address and this
practice or delivery of services, goods, supplies, or merchandise
has been disclosed in the application package approved by the
department when the provisional provider status or preferred
provisional provider status was granted.

(k) Except for providers subject to subdivision (c) of Section
14043.47, a provider currently enrolled in the Medi-Cal program
at one or more locations who has submitted an application package
for enrollment at a new location or a change in location pursuant
to subdivision (a), or filed a change of location form pursuant to
subdivision (b), may submit claims for services, goods, supplies,
or merchandise rendered at the new location until the application
package or change of location form is approved or denied under
this section, and shall not be subject, during that period, to
deactivation, or be subject to any delay or nonpayment of claims
as a result of billing for services rendered at the new location as
herein authorized. However, the provider shall be considered during
that period to have been granted provisional provider status or
preferred provisional provider status and be subject to termination
of that status pursuant to Section 14043.27. A provider that is
subject to subdivision (c) of Section 14043.47 may come within
the scope of this subdivision upon submitting documentation in
the application package that identifies the physician providing
supervision for every three locations. If a provider submits claims
for services rendered at a new location before the application for
that location is received by the department, the department may
deny the claim.

(l) An applicant or a provider whose application for enrollment,
continued enrollment, or a new location or change in location has
been denied pursuant to this section, may appeal the denial in
accordance with Section 14043.65.

(m) (1) Upon receipt of a complete and accurate claim for an
individual nurse provider, the department shall adjudicate the claim
within an average of 30 days.

(2) During the budget proceedings of the 2006-07 fiscal year,
and each fiscal year thereafter, the department shall provide data
to the Legislature specifying the timeframe under which it has
processed and approved the provider applications submitted by
individual nurse providers.

(3) For purposes of this subdivision, “individual nurse providers”
are providers authorized under certain home- and community-based
waivers and under the state plan to provide nursing services to
Medi-Cal recipients in the recipients’ own homes rather than in
institutional settings.

begin delete

(n)  The amendments to subdivision (b), which implement a
change of location form, and the addition of paragraph (2) to
subdivision (c), the amendments to subdivision (e), and the addition
of subdivision (g), which prescribe different processing timeframes
for physicians and physician groups, as contained in Chapter 693
of the Statutes of 2007, shall become operative on July 1, 2008.

(o) (1) This section shall become operative on the effective
date of the state plan amendment necessary to implement this
section, as stated in the declaration executed by the director
pursuant to paragraph (2).

(2) Upon approval of the state plan amendment necessary to
implement this section under Sections 455.434 and 455.450 of
Title 42 of the Code of Federal Regulations, the director shall
execute a declaration, to be retained by the director, that states that
this approval has been obtained and the effective date of the state
plan amendment. The department shall post the declaration on its
Internet Web site and transmit a copy of the declaration to the
Legislature.

end delete begin insert

(n) (1) Except as provided in paragraph (2), an applicant or
provider may request to withdraw an application package
submitted pursuant to this section at any time, at which point the
department’s review shall be canceled.

end insert begin insert

(2) The department’s review shall not be canceled if, at the time
the applicant or provider requests to withdraw his or her
application package, the department has already initiated review
under Section 14043.37, 14043.4, or 14043.7.

end insert

begin insert

begin insert SEC. 25. end insert   

end insert

begin insert Section 14087.36 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14087.36.  

(a) The following definitions shall apply for
purposes of this section:

(1) “County” means the City and County of San Francisco.

(2) “Board” means the Board of Supervisors of the City and
County of San Francisco.

(3) “Department” means the State Department of Health begin insert Care end insert
Services.

(4) “Governing body” means the governing body of the health
authority.

(5) “Health authority” means the separate public agency
established by the board of supervisors to operate a health care
system in the county and to engage in the other activities authorized
by this section.

(b) The Legislature finds and declares that it is necessary that
a health authority be established in the county to arrange for the
provision of health care services in order to meet the problems of
the delivery of publicly assisted medical care in the county, to
enter into a contract with the department under Article 2.97
(commencing with Section 14093), or to contract with a health
care service plan on terms and conditions acceptable to the
department, and to demonstrate ways of promoting quality care
and cost efficiency.

(c) The county may, by resolution or ordinance, establish a
health authority to act as and be the local initiative component of
the Medi-Cal state plan pursuant to regulations adopted by the
department. If the board elects to establish a health authority, all
rights, powers, duties, privileges, and immunities vested in a county
under Article 2.8 (commencing with Section 14087.5) and Article
2.97 (commencing with Section 14093) shall be vested in the health
authority. The health authority shall have all power necessary and
appropriate to operate programs involving health care services,
including, but not limited to, the power to acquire, possess, and
dispose of real or personal property, to employ personnel and
contract for services required to meet its obligations, to sue or be
sued, to take all actions and engage in all public and private
business activities, subject to any applicable licensure, as permitted
a health care service plan pursuant to Chapter 2.2 (commencing
with Section 1340) of Division 2 of the Health and Safety Code,
and to enter into agreements under Chapter 5 (commencing with
Section 6500) of Division 7 of Title 1 of the Government Code.

(d) (1) (A) The health authority shall be considered a public
entity for purposes of Division 3.6 (commencing with Section 810)
of Title 1 of the Government Code, separate and distinct from the
county, and shall file the statement required by Section 53051 of
the Government Code. The health authority shall have primary
responsibility to provide the defense and indemnification required
under Division 3.6 (commencing with Section 810) of Title 1 of
the Government Code for employees of the health authority who
are employees of the county. The health authority shall provide
insurance under terms and conditions required by the county in
order to satisfy its obligations under this section.

(B) For purposes of this paragraph, “employee” shall have the
same meaning as set forth in Section 810.2 of the Government
Code.

(2) The health authority shall not be considered to be an agency,
division, department, or instrumentality of the county and shall
not be subject to the personnel, procurement, or other operational
rules of the county.

(3) Notwithstanding any other provision of law, any obligations
of the health authority, statutory, contractual, or otherwise, shall
be the obligations solely of the health authority and shall not be
the obligations of the county, unless expressly provided for in a
contract between the authority and the county, nor of the state.

(4) Except as agreed to by contract with the county, no liability
of the health authority shall become an obligation of the county
upon either termination of the health authority or the liquidation
or disposition of the health authority’s remaining assets.

(e) (1) To the full extent permitted by federal law, the
department and the health authority may enter into contracts to
provide or arrange for health care services for any or all persons
who are eligible to receive benefits under the Medi-Cal program.
The contracts may be on an exclusive or nonexclusive basis, and
shall include payment provisions on any basis negotiated between
the department and the health authority. The health authority may
also enter into contracts for the provision of health care services
to individuals including, but not limited to, those covered under
Subchapter XVIII (commencing with Section 1395) of Chapter 7
of Title 42 of the United States Code, individuals employed by
public agencies and private businesses, and uninsured or indigent
individuals.

(2) Notwithstanding paragraph (1), or subdivision (f), the health
authority may not operate health plans or programs for individuals
covered under Subchapter XVIII (commencing with Section 1395)
of Chapter 7 of Title 42 of the United States Code, or for private
businesses, until the health authority is in full compliance with all
of the requirements of the Knox-Keene Health Care Service Plan
Act of 1975 under Chapter 2.2 (commencing with Section 1340)
of Division 2 of the Health and Safety Code, including tangible
net equity requirements applicable to a licensed health care service
plan. This limitation shall not preclude the health authority from
enrolling persons pursuant to the county’s obligations under Section
17000, or from enrolling county employees.

(f) The board of supervisors may transfer responsibility for
administration of county-provided health care services to the health
authority for the purpose of service of populations including
uninsured and indigent persons, subject to the provisions of any
ordinances or resolutions passed by the county board of
supervisors. The transfer of administrative responsibility for those
health care services shall not relieve the county of its responsibility
for indigent care pursuant to Section 17000. The health authority
may also enter into contracts for the provision of health care
services to individuals including, but not limited to, those covered
under Subchapter XVIII (commencing with Section 1395) of
Chapter 7 of Title 42 of the United States Code, and individuals
employed by public agencies and private businesses.

(g) Upon creation, the health authority may borrow from the
county and the county may lend the authority funds, or issue
revenue anticipation notes to obtain those funds necessary to
commence operations or perform the activities of the health
authority. Notwithstanding any other provision of law, both the
county and the health authority shall be eligible to receive funding
under subdivision (p) of Section 14163.

(h) The county may terminate the health authority, but only by
an ordinance approved by a two-thirds affirmative vote of the full
board.

(i) Prior to the termination of the health authority, the county
shall notify the department of its intent to terminate the health
authority. The department shall conduct an audit of the health
authority’s records within 30 days of notification to determine the
liabilities and assets of the health authority. The department shall
report its findings to the county and to the Department of Managed
Health Care within 10 days of completion of the audit. The county
shall prepare a plan to liquidate or otherwise dispose of the assets
of the health authority and to pay the liabilities of the health
authority to the extent of the health authority’s assets, and present
the plan to the department and the Department of Managed Health
Care within 30 days upon receipt of these findings.

(j) Any assets of the health authority derived from the contract
entered into between the state and the authority pursuant to Article
2.97 (commencing with Section 14093), after payment of the
liabilities of the health authority, shall be disposed of pursuant to
the contract.

(k) (1) The governing body shall consist of 18 voting members,
14 of whom shall be appointed by resolution or ordinance of the
board as follows:

(A) One member shall be a member of the board or any other
person designated by the board.

(B) One member shall be a person who is employed in the senior
management of a hospital not operated by the county or the
University of California and who is nominated by the San Francisco
Section of the Westbay Hospital Conference or any successor
organization, or if there is no successor organization, a person who
shall be nominated by the Hospital Council of Northern and Central
California.

(C) Two members, one of whom shall be a person employed in
the senior management of San Francisco General Hospital and one
of whom shall be a person employed in the senior management of
St. Luke’s Hospital (San Francisco). If San Francisco General
Hospital or St. Luke’s Hospital, at the end of the term of the person
appointed from its senior management, is not designated as a
disproportionate share hospital, and if the governing body, after
providing an opportunity for comment by the Westbay Hospital
Conference, or any successor organization, determines that the
hospital no longer serves an equivalent patient population, the
governing body may, by a two-thirds vote of the full governing
body, select an alternative hospital to nominate a person employed
in its senior management to serve on the governing body.
Alternatively, the governing body may approve a reduction in the
number of positions on the governing body as set forth in
subdivision (p).

(D) Two members shall be employees in the senior management
of either private nonprofit community clinics or a community clinic
consortium, nominated by the San Francisco Community Clinic
Consortium, or any successor organization.

(E) Two members shall be physicians, nominated by the San
Francisco Medical Society, or any successor organization.

(F) One member shall be nominated by the San Francisco Labor
Council, or any successor organization.

(G) Two members shall be persons nominated by the begin delete beneficiary end delete
begin insert member advisory end insert committee of the health begin delete authority, at least one
of whom shall, at the time of appointment and during the person’s
term, be a Medi-Cal beneficiary end delete begin insert authority. Nominees of the member
advisory committee shall be enrolled in any of the health insurance
or health care coverage programs operated by the health authority
or be the parent or legal guardian of an enrollee in any of the
health insurance or health care coverage programs operated by
the health authority end insert .

(H) Two members shall be persons knowledgeable in matters
relating to either traditional safety net providers, health care
organizations, the Medi-Cal program, or the activities of the health
authority, nominated by the program committee of the health
authority.

(I) One member shall be a person nominated by the San
Francisco Pharmacy Leadership Group, or any successor
organization.

(2) One member, selected to fulfill the appointments specified
in subparagraph (A), (G), or (H) shall, in addition to representing
his or her specified organization or employer, represent the
discipline of nursing, and shall possess or be qualified to possess
a registered nursing license.

(3) The initial members appointed by the board under the
subdivision shall be, to the extent those individuals meet the
qualifications set forth in this subdivision and are willing to serve,
those persons who are members of the steering committee created
by the county to develop the local initiative component of the
Medi-Cal state plan in San Francisco. Following the initial
staggering of terms, each of those members shall be appointed to
a term of three years, except the member appointed pursuant to
subparagraph (A) of paragraph (1), who shall serve at the pleasure
of the board. At the first meeting of the governing body, the
members appointed pursuant to this subdivision shall draw lots to
determine seven members whose initial terms shall be for two
years. Each member shall remain in office at the conclusion of
that member’s term until a successor member has been nominated
and appointed.

(l) In addition to the requirements of subdivision (k), one
member of the governing body shall be appointed by the Mayor
of the City of San Francisco to serve at the pleasure of the mayor,
one member shall be the county’s director of public health or
designee, who shall serve at the pleasure of that director, one
member shall be the Chancellor of the University of California at
San Francisco or his or her designee, who shall serve at the pleasure
of the chancellor, and one member shall be the county director of
mental health or his or her designee, who shall serve at the pleasure
of that director.

(m) There shall be one nonvoting member of the governing
body who shall be appointed by, and serve at the pleasure of, the
health commission of the county.

(n) Each person appointed to the governing body shall,
throughout the member’s term, either be a resident of the county
or be employed within the geographic boundaries of the county.

(o) (1) The composition of the governing body and nomination
process for appointment of its members shall be subject to
alteration upon a two-thirds vote of the full membership of the
governing body. This action shall be concurred in by a resolution
or ordinance of the county.

(2) Notwithstanding paragraph (1), no alteration described in
that paragraph shall cause the removal of a member prior to the
expiration of that member’s term.

(p) A majority of the members of the governing body shall
constitute a quorum for the transaction of business, and all official
acts of the governing body shall require the affirmative vote of a
majority of the members present and voting. However, no official
shall be approved with less than the affirmative vote of six
members of the governing body, unless the number of members
prohibited from voting because of conflicts of interest precludes
adequate participation in the vote. The governing body may, by a
two-thirds vote adopt, amend, or repeal rules and procedures for
the governing body. Those rules and procedures may require that
certain decisions be made by a vote that is greater than a majority
vote.

(q) For purposes of Section 87103 of the Government Code,
members appointed pursuant to subparagraphs (B) to (E), inclusive,
of paragraph (1) of subdivision (k) represent, and are appointed
to represent, respectively, the hospitals, private nonprofit
community clinics, and physicians that contract with the health
authority, or the health care service plan with which the health
authority contracts, to provide health care services to the enrollees
of the health authority or the health care service plan. Members
appointed pursuant to subparagraphs (F) and (G) of paragraph (1)
of subdivision (k) represent, and are appointed to represent,
respectively, the health care workers and enrollees served by the
health authority or its contracted health care service plan, and
traditional safety net and ancillary providers and other
organizations concerned with the activities of the health authority.

(r) A member of the governing body may be removed from
office by the board by resolution or ordinance, only upon the
recommendation of the health authority, and for any of the
following reasons:

(1) Failure to retain the qualifications for appointment specified
in subdivisions (k) and (n).

(2) Death or a disability that substantially interferes with the
member’s ability to carry out the duties of office.

(3) Conviction of any felony or a crime involving corruption.

(4) Failure of the member to discharge legal obligations as a
member of a public agency.

(5) Substantial failure to perform the duties of office, including,
but not limited to, unreasonable absence from meetings. The failure
to attend three meetings in a row of the governing body, or a
majority of the meetings in the most recent calendar year, may be
deemed to be unreasonable absence.

(s) Any vacancy on the governing body, however created, shall
be filled for the unexpired term by the board by resolution or
ordinance. Each vacancy shall be filled by an individual having
the qualifications of his or her predecessor, nominated as set forth
in subdivision (k).

(t) The chair of the authority shall be selected by, and serve at
the pleasure of, the governing body.

(u) The health authority shall establish all of the following:

(1) A begin delete beneficiary end delete begin insert member advisory end insert committee to advise the
health authority on issues of concern to the recipients of services.

(2) A program committee to advise the health authority on
matters relating to traditional safety net providers, ancillary
providers, and other organizations concerned with the activities
of the health authority.

(3) Any other committees determined to be advisable by the
health authority.

(v) (1) Notwithstanding any provision of state or local law,
including, but not limited to, the county charter, a member of the
health authority shall not be deemed to be interested in a contract
entered into by the authority within the meaning of Article 4
(commencing with Section 1090) of Chapter 1 of Division 4 of
Title 1 of the Government Code, or within the meaning of
conflict-of-interest restrictions in the county charter, if all of the
following apply:

(A) The member does not influence or attempt to influence the
health authority or another member of the health authority to enter
into the contract in which the member is interested.

(B) The member discloses the interest to the health authority
and abstains from voting on the contract.

(C) The health authority notes the member’s disclosure and
abstention in its official records and authorizes the contract in good
faith by a vote of its membership sufficient for the purpose without
counting the vote of the interested member.

(D) The member has an interest in or was appointed to represent
the interests of physicians, health care practitioners, hospitals,
pharmacies, or other health care organizations.

(E) The contract authorizes the member or the organization the
member has an interest in or represents to provide services to
beneficiaries under the authority’s program or administrative
services to the authority.

(2) In addition, no person serving as a member of the governing
body shall, by virtue of that membership, be deemed to be engaged
in activities that are inconsistent, incompatible, or in conflict with
their duties as an officer or employee of the county or the
University of California, or as an officer or an employee of any
private hospital, clinic, or other health care organization. The
membership shall not be deemed to be in violation of Section 1126
of the Government Code.

(w) Notwithstanding any other provision of law, those records
of the health authority and of the county that reveal the authority’s
rates of payment for health care services or the health authority’s
deliberative processes, discussions, communications, or any other
portion of the negotiations with providers of health care services
for rates of payment, or the health authority’s peer review
proceedings shall not be required to be disclosed pursuant to the
California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code),
or any similar local law requiring the disclosure of public records.
However, three years after a contract or amendment to a contract
is fully executed, the portion of the contract or amendment
containing the rates of payment shall be open to inspection.

(x) Notwithstanding any other provision of law, the health
authority may meet in closed session to consider and take action
on peer review proceedings and on matters pertaining to contracts
and contract negotiations by the health authority’s staff with
providers of health care services concerning all matters relating
to rates of payment. However, a decision as to whether to enter
into, amend the services provisions of, or terminate, other than for
reasons based upon peer review, a contract with a provider of
health care services, shall be made in open session.

(y) (1) (A) Notwithstanding the Ralph M. Brown Act (Chapter
9 (commencing with Section 54950) of Part 1 of Division 2 of
Title 5 of the Government Code), the governing board of the health
authority may meet in closed session for the purpose of discussion
of, or taking action on matters involving, health authority trade
secrets.

(B) The requirement that the authority make a public report of
actions taken in closed session and the vote or abstention of every
member present may be limited to a brief general description of
the action taken and the vote so as to prevent the disclosure of a
trade secret.

(C) For purposes of this subdivision, “health authority trade
secret” means a trade secret, as defined in subdivision (d) of
Section 3426.1 of the Civil Code, that also meets both of the
following criteria:

(i) The secrecy of the information is necessary for the health
authority to initiate a new service, program, marketing strategy,
business plan, or technology, or to add a benefit or product.

(ii) Premature disclosure of the trade secret would create a
substantial probability of depriving the health authority of a
substantial economic benefit or opportunity.

(2) Those records of the health authority that reveal the health
authority’s trade secrets are exempt from disclosure pursuant to
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code),
or any similar local law requiring the disclosure of public records.
This exemption shall apply for a period of two years after the
service, program, marketing strategy, business plan, technology,
benefit, or product that is the subject of the trade secret is formally
adopted by the governing body of the health authority, provided
that the service, program, marketing strategy, business plan,
technology, benefit, or product continues to be a trade secret. The
governing board may delete the portion or portions containing
trade secrets from any documents that were finally approved in
the closed session held pursuant to this subdivision that are
provided to persons who have made the timely or standing request.

(z) The health authority shall be deemed to be a public agency
for purposes of all grant programs and other funding and loan
guarantee programs.

(aa) Contracts under this article between the State Department
of Health Services and the health authority shall be on a nonbid
basis and shall be exempt from Chapter 2 (commencing with
Section 10290) of Part 2 of Division 2 of the Public Contract Code.

(ab) (1) The county controller or his or her designee, at intervals
the county controller deems appropriate, shall conduct a review
of the fiscal condition of the health authority, shall report the
findings to the health authority and the board, and shall provide a
copy of the findings to any public agency upon request.

(2) Upon the written request of the county controller, the health
authority shall provide full access to the county controller all health
authority records and documents as necessary to allow the county
controller or designee to perform the activities authorized by this
subdivision.

(ac) A Medi-Cal recipient receiving services through the health
authority shall be deemed to be a subscriber or enrollee for
purposes of Section 1379 of the Health and Safety Code.

begin delete SEC. 23. end delete
begin insert SEC. 26. end insert   

Section 14105.192 of the Welfare and Institutions
Code is amended to read:

14105.192.  

(a) The Legislature finds and declares the
following:

(1) Costs within the Medi-Cal program continue to grow due
to the rising cost of providing health care throughout the state and
also due to increases in enrollment, which are more pronounced
during difficult economic times.

(2) In order to minimize the need for drastically cutting
enrollment standards or benefits during times of economic crisis,
it is crucial to find areas within the program where reimbursement
levels are higher than required under the standard provided in
Section 1902(a)(30)(A) of the federal Social Security Act and can
be reduced in accordance with federal law.

(3) The Medi-Cal program delivers its services and benefits to
Medi-Cal beneficiaries through a wide variety of health care
providers, some of which deliver care via managed care or other
contract models while others do so through fee-for-service
arrangements.

(4) The setting of rates within the Medi-Cal program is complex
and is subject to close supervision by the United States Department
of Health and Human Services.

(5) As the single state agency for Medicaid in California, the
department has unique expertise that can inform decisions that set
or adjust reimbursement methodologies and levels consistent with
the requirements of federal law.

(b) Therefore, it is the intent of the Legislature for the
department to analyze and identify where reimbursement levels
can be reduced consistent with the standard provided in Section
1902(a)(30)(A) of the federal Social Security Act and consistent
with federal and state law and policies, including any exemptions
contained in the provisions of the act that added this section,
provided that the reductions in reimbursement shall not exceed 10
percent on an aggregate basis for all providers, services and
products.

(c) Notwithstanding any other provision of law, the director
shall adjust provider payments, as specified in this section.

(d) (1) Except as otherwise provided in this section, payments
shall be reduced by 10 percent for Medi-Cal fee-for-service benefits
for dates of service on and after June 1, 2011.

(2) For managed health care plans that contract with the
department pursuant to this chapter or Chapter 8 (commencing
with Section 14200), except contracts with Senior Care Action
Network and AIDS Healthcare Foundation, payments shall be
reduced by the actuarial equivalent amount of the payment
reductions specified in this section pursuant to contract
amendments or change orders effective on July 1, 2011, or
thereafter.

(3) Payments shall be reduced by 10 percent for non-Medi-Cal
programs described in Article 6 (commencing with Section 124025)
of Chapter 3 of Part 2 of Division 106 of the Health and Safety
Code, and Section 14105.18, for dates of service on and after June
1, 2011. This paragraph shall not apply to inpatient hospital
services provided in a hospital that is paid under contract pursuant
to Article 2.6 (commencing with Section 14081).

(4) (A) Notwithstanding any other provision of law, the director
may adjust the payments specified in paragraphs (1) and (3) of
this subdivision with respect to one or more categories of Medi-Cal
providers, or for one or more products or services rendered, or any
combination thereof, so long as the resulting reductions to any
category of Medi-Cal providers, in the aggregate, total no more
than 10 percent.

(B) The adjustments authorized in subparagraph (A) shall be
implemented only if the director determines that, for each affected
product, service begin insert , end insert or provider category, the payments resulting from
the adjustment comply with subdivision (m).

(e) Notwithstanding any other provision of this section,
payments to hospitals that are not under contract with the State
Department of Health Care Services pursuant to Article 2.6
(commencing with Section 14081) for inpatient hospital services
provided to Medi-Cal beneficiaries and that are subject to Section
14166.245 shall be governed by that section.

(f) Notwithstanding any other provision of this section, the
following shall apply:

(1) Payments to providers that are paid pursuant to Article 3.8
(commencing with Section 14126) shall be governed by that article.

(2) (A) Subject to subparagraph (B), for dates of service on and
after June 1, 2011, Medi-Cal reimbursement rates for intermediate
care facilities for the developmentally disabled licensed pursuant
to subdivision (e), (g), or (h) of Section 1250 of the Health and
Safety Code, and facilities providing continuous skilled nursing
care to developmentally disabled individuals pursuant to the pilot
project established by Section 14132.20, as determined by the
applicable methodology for setting reimbursement rates for these
facilities, shall not exceed the reimbursement rates that were
applicable to providers in the 2008-09 rate year.

(B) (i) If Section 14105.07 is added to the Welfare and
Institutions Code during the 2011-12 Regular Session of the
Legislature, subparagraph (A) shall become inoperative.

(ii) If Section 14105.07 is added to the Welfare and Institutions
Code during the 2011-12 Regular Session of the Legislature, then
for dates of service on and after June 1, 2011, payments to
intermediate care facilities for the developmentally disabled
licensed pursuant to subdivision (e), (g), or (h) of Section 1250 of
the Health and Safety Code, and facilities providing continuous
skilled nursing care to developmentally disabled individuals
pursuant to the pilot project established by Section 14132.20, shall
be governed by the applicable methodology for setting
reimbursement rates for these facilities and by Section 14105.07.

(g) The department may enter into contracts with a vendor for
the purposes of implementing this section on a bid or nonbid basis.
In order to achieve maximum cost savings, the Legislature declares
that an expedited process for contracts under this subdivision is
necessary. Therefore, contracts entered into to implement this
section and all contract amendments and change orders shall be
exempt from Chapter 2 (commencing with Section 10290) of Part
2 Division 2 of the Public Contract Code.

(h) To the extent applicable, the services, facilities, and
payments listed in this subdivision shall be exempt from the
payment reductions specified in subdivision (d) as follows:

(1) Acute hospital inpatient services that are paid under contracts
pursuant to Article 2.6 (commencing with Section 14081).

(2) Federally qualified health center services, including those
facilities deemed to have federally qualified health center status
pursuant to a waiver pursuant to subsection (a) of Section 1115 of
the federal Social Security Act (42 U.S.C. Sec. 1315(a)).

(3) Rural health clinic services.

(4) Payments to facilities owned or operated by the State
Department of State Hospitals or the State Department of
Developmental Services.

(5) Hospice services.

(6) Contract services, as designated by the director pursuant to
subdivision (k).

(7) Payments to providers to the extent that the payments are
funded by means of a certified public expenditure or an
intergovernmental transfer pursuant to Section 433.51 of Title 42
of the Code of Federal Regulations. This paragraph shall apply to
payments described in paragraph (3) of subdivision (d) only to the
extent that they are also exempt from reduction pursuant to
subdivision (l).

(8) Services pursuant to local assistance contracts and
interagency agreements to the extent the funding is not included
in the funds appropriated to the department in the annual Budget
Act.

(9) Breast and cervical cancer treatment provided pursuant to
Section 14007.71 and as described in paragraph (3) of subdivision
(a) of Section 14105.18 or Article 1.5 (commencing with Section
104160) of Chapter 2 of Part 1 of Division 103 of the Health and
Safety Code.

(10) The Family Planning, Access, Care, and Treatment (Family
PACT) Program pursuant to subdivision (aa) of Section 14132.

(i) Subject to the exception for services listed in subdivision
(h), the payment reductions required by subdivision (d) shall apply
to the benefits rendered by any provider who may be authorized
to bill for the service, including, but not limited to, physicians,
podiatrists, nurse practitioners, certified nurse-midwives, nurse
anesthetists, and organized outpatient clinics.

(j) Notwithstanding any other provision of law, for dates of
service on and after June 1, 2011, Medi-Cal reimbursement rates
applicable to the following classes of providers shall not exceed
the reimbursement rates that were applicable to those classes of
providers in the 2008-09 rate year, as described in subdivision (f)
of Section 14105.191, reduced by 10 percent:

(1) Intermediate care facilities, excluding those facilities
identified in paragraph (2) of subdivision (f). For purposes of this
section, “intermediate care facility” has the same meaning as
defined in Section 51118 of Title 22 of the California Code of
Regulations.

(2) Skilled nursing facilities that are distinct parts of general
acute care hospitals. For purposes of this section, “distinct part”
has the same meaning as defined in Section 72041 of Title 22 of
the California Code of Regulations.

(3) Rural swing-bed facilities.

(4) Subacute care units that are, or are parts of, distinct parts of
general acute care hospitals. For purposes of this subparagraph,
“subacute care unit” has the same meaning as defined in Section
51215.5 of Title 22 of the California Code of Regulations.

(5) Pediatric subacute care units that are, or are parts of, distinct
parts of general acute care hospitals. For purposes of this
subparagraph, “pediatric subacute care unit” has the same meaning
as defined in Section 51215.8 of Title 22 of the California Code
of Regulations.

(6) Adult day health care centers.

(7) Freestanding pediatric subacute care units, as defined in
Section 51215.8 of Title 22 of the California Code of Regulations.

(k) 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 and administer this section by
means of provider bulletins or similar instructions, without taking
regulatory action.

(l) The reductions described in this section shall apply only to
payments for services when the General Fund share of the payment
is paid with funds directly appropriated to the department in the
annual Budget Act and shall not apply to payments for services
paid with funds appropriated to other departments or agencies.

(m) Notwithstanding any other provision of this section, the
payment reductions and adjustments provided for in subdivision
(d) shall be implemented only if the director determines that the
payments that result from the application of this section will
comply with applicable federal Medicaid requirements and that
federal financial participation will be available.

(1) In determining whether federal financial participation is
available, the director shall determine whether the payments
comply with applicable federal Medicaid requirements, including
those set forth in Section 1396a(a)(30)(A) of Title 42 of the United
States Code.

(2) To the extent that the director determines that the payments
do not comply with the federal Medicaid requirements or that
federal financial participation is not available with respect to any
payment that is reduced pursuant to this section, the director retains
the discretion to not implement the particular payment reduction
or adjustment and may adjust the payment as necessary to comply
with federal Medicaid requirements.

(n) The department shall seek any necessary federal approvals
for the implementation of this section.

(o) (1) The payment reductions and adjustments set forth in
this section shall not be implemented until federal approval is
obtained.

(2) To the extent that federal approval is obtained for one or
more of the payment reductions and adjustments in this section
and Section 14105.07, the payment reductions and adjustments
set forth in Section 14105.191 shall cease to be implemented for
the same services provided by the same class of providers. In the
event of a conflict between this section and Section 14105.191,
other than the provisions setting forth a payment reduction or
adjustment, this section shall govern.

(3) When federal approval is obtained, the payments resulting
from the application of this section shall be implemented
retroactively to June 1, 2011, or on any other date or dates as may
be applicable.

(4) The director may clarify the application of this subdivision
by means of provider bulletins or similar instructions, pursuant to
subdivision (k).

(p) Adjustments to pharmacy drug product payment pursuant
to this section shall no longer apply when the department
determines that the average acquisition cost methodology pursuant
to Section 14105.45 has been fully implemented and the
department’s pharmacy budget reduction targets, consistent with
payment reduction levels pursuant to this section, have been met.

begin insert

begin insert SEC. 27. end insert   

end insert

begin insert Section 14124.5 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14124.5.  

(a) The director may, in accordance with begin delete the
provisions of end delete Section 10725, adopt, amend begin insert , end insert or repeal, in accordance
with Chapter begin delete 4.5 end delete begin insert 3.5 end insert (commencing with Section begin delete 11371) end delete begin insert 11340) end insert
of Part 1 begin delete , end delete begin insert of end insert Division 3 begin delete , end delete begin insert of end insert Title 2 of the Government Code, begin delete such end delete
reasonable rules and regulations as may be necessary or proper to
carry out the purposes and intent of this chapter begin insert , end insert and to enable begin delete it end delete
begin insert the department end insert to exercise the powers and perform the duties
conferred upon it by this chapter, not inconsistent with any begin delete of the
provisions of any end delete statute of this state.

(b) All regulations begin delete heretofore end delete begin insert previously end insert adopted by the State
Department of Health begin insert Care Services end insert or any predecessor department
pursuant to this chapter and in effect immediately preceding the
operative date of this section, shall remain in effect and shall be
fully enforceable unless and until readopted, amended, or repealed
by the director in accordance with begin delete the provisions of end delete Section 10725.

begin delete SEC. 24. end delete
begin insert SEC. 28. end insert   

Section 14169.51 of the Welfare and Institutions
Code is amended to read:

14169.51.  

For purposes of this article, the following definitions
shall apply:

(a) “Acute psychiatric days” means the total number of Medi-Cal
specialty mental health service administrative days, Medi-Cal
specialty mental health service acute care days, acute psychiatric
administrative days, and acute psychiatric acute days identified in
the Final Medi-Cal Utilization Statistics for the state fiscal year
preceding the rebase calculation year as calculated by the
department as of the retrieval date.

(b) “Acute psychiatric per diem supplemental rate” means a
fixed per diem supplemental payment for acute psychiatric days.

(c) “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.

(d) “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.

(e) “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.

(f) “Base calendar year” means a calendar year that ends before
a subject fiscal year begins, but no more than six years before a
subject fiscal year begins. Beginning with the third program period,
the department shall establish the base calendar year during the
rebase calculation year as the calendar year for which the most
recent data is available that the department determines is reliable.

(g) “Converted hospital” means a private hospital that becomes
a designated public hospital or a nondesignated public hospital on
or after the first day of a program period.

(h) “Days data source” means either: (1) if a hospital’s Annual
Financial Disclosure Report for its fiscal year ending in the base
calendar year includes data for a full fiscal year of operation, the
hospital’s Annual Financial Disclosure Report retrieved from the
Office of Statewide Health Planning and Development as retrieved
by the department on the retrieval date pursuant to Section
14169.59, for its fiscal year ending in the base calendar year; or
(2) if a hospital’s Annual Financial Disclosure Report for its fiscal
year ending in the base calendar year includes data for more than
one day, but less than a full year of operation, the department’s
best and reasonable estimates of the hospital’s Annual Financial
Disclosure Report if the hospital had operated for a full year.

(i) “Department” means the State Department of Health Care
Services.

(j) “Designated public hospital” shall have the meaning given
in subdivision (d) of Section 14166.1.

(k) “Director” means the Director of Health Care Services.

(l) “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 designated as a specialty hospital in the hospital’s most recently
filed Office of Statewide Health Planning and Development
Hospital Annual Financial Disclosure Report, as of the first day
of a program period.

(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
most recently filed Office of Statewide Health Planning and
Development Hospital Annual Financial Disclosure Report, as of
the first day of a program period.

(m) “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 pursuant to this article.

(n) “Fee-for-service per diem quality assurance fee rate” means
a fixed fee on fee-for-service days.

(o) “Fee-for-service days” means inpatient hospital days as
reported on the days data source where the service type is reported
as “acute care,” “psychiatric care,” or “rehabilitation care,” and
the payer category is reported as “Medicare traditional,” “county
indigent programs-traditional,” “other third parties-traditional,”
“other indigent,” or “other payers,” for purposes of the Annual
Financial Disclosure Report submitted by hospitals to the Office
of Statewide Health Planning and Development.

(p) “Fund” means the Hospital Quality Assurance Revenue
Fund established by Section 14167.35.

(q) “General acute care days” means the total number of
Medi-Cal general acute care days, including well baby days, less
any acute psychiatric inpatient days, paid by the department to a
hospital for services in the base calendar year, as reflected in the
state paid claims file on the retrieval date.

(r) “General acute care hospital” means any hospital licensed
pursuant to subdivision (a) of Section 1250 of the Health and Safety
Code.

(s) “General acute care per diem supplemental rate” means a
fixed per diem supplemental payment for general acute care days.

(t) “High acuity days” means Medi-Cal coronary care unit days,
pediatric intensive care unit days, intensive care unit days, neonatal
intensive care unit days, and burn unit days paid by the department
to a hospital for services in the base calendar year, as reflected in
the state paid claims file prepared by the department on the retrieval
date.

(u) “High acuity per diem supplemental rate” means a fixed per
diem supplemental payment for high acuity days for specified
hospitals in Section 14169.55.

(v) “High acuity trauma per diem supplemental rate” means a
fixed per diem supplemental payment for high acuity days for
specified hospitals in Section 14169.55 that have been designated
as specified types of trauma hospitals.

(w) “Hospital community” includes, but is not limited to, the
statewide hospital industry organization and systems representing
general acute care hospitals.

(x) “Hospital inpatient services” means all services covered
under Medi-Cal and furnished by hospitals to patients who are
admitted as hospital inpatients and reimbursed on a fee-for-service
basis by the department directly or through its fiscal intermediary.
Hospital inpatient services include outpatient services furnished
by a hospital to a patient who is admitted to that hospital within
24 hours of the provision of the outpatient services that are related
to the condition for which the patient is admitted. Hospital inpatient
services do not include services for which a managed health care
plan is financially responsible.

(y) “Hospital outpatient services” means all services covered
under Medi-Cal furnished by hospitals to patients who are
registered as hospital outpatients and reimbursed by the department
on a fee-for-service basis directly or through its fiscal intermediary.
Hospital outpatient services do not include services for which a
managed health care plan is financially responsible, or services
rendered by a hospital-based federally qualified health center for
which reimbursement is received pursuant to Section 14132.100.

(z) “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,” or “rehabilitation care,” and
the payer category is reported as “Medicare managed care,”
“county indigent programs-managed care,” or “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.

(aa) “Managed care per diem quality assurance fee rate” means
a fixed fee on managed care days.

(ab) (1) “Managed health care plan” means a health care
delivery system that manages the provision of health care and
receives prepaid capitated payments from the state in return for
providing services to Medi-Cal beneficiaries.

(2) (A) Managed health care plans include county organized
health systems and entities contracting with the department to
provide or arrange services for Medi-Cal beneficiaries pursuant
to the two-plan model, geographic managed care, or regional
managed care for the rural expansion. Entities providing these
services contract with the department pursuant to any of the
following:

(i) Article 2.7 (commencing with Section 14087.3).

(ii) Article 2.8 (commencing with Section 14087.5).

(iii) Article 2.81 (commencing with Section 14087.96).

(iv) Article 2.82 (commencing with Section 14087.98).

(v) Article 2.91 (commencing with Section 14089).

(B) Managed health care plans do not include any of the
following:

(i) Mental health plans contracting to provide mental health care
for Medi-Cal beneficiaries pursuant to Chapter 8.9 (commencing
with Section 14700).

(ii) Health plans not covering inpatient services such as primary
care case management plans operating pursuant to Section
14088.85.

(iii) Program for All-Inclusive Care for the Elderly organizations
operating pursuant to Chapter 8.75 (commencing with Section
14591).

(ac) “Medi-Cal days” means inpatient hospital days as reported
on the days data source where the service type is reported as “acute
care,” “psychiatric care,” or “rehabilitation care,” and the payer
category is reported as “Medi-Cal traditional” or “Medi-Cal
managed care,” for purposes of the Annual Financial Disclosure
Report submitted by hospitals to the Office of Statewide Health
Planning and Development.

(ad) “Medi-Cal fee-for-service days” means inpatient hospital
days as reported on the days data source where the service type is
reported as “acute care,” “psychiatric care,” or “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.

(ae) “Medi-Cal managed care days” means the total number of
general acute care days, including well baby days, listed for the
county organized health system and prepaid health plans identified
in the Final Medi-Cal Utilization Statistics for the state fiscal year
preceding the rebase calculation year, as calculated by the
department as of the retrieval date.

(af) “Medi-Cal managed care fee days” means inpatient hospital
days as reported on the days data source where the service type is
reported as “acute care,” “psychiatric care,” or “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.

(ag) “Medi-Cal per diem quality assurance fee rate” means a
fixed fee on Medi-Cal days.

(ah) “Medicaid inpatient utilization rate” means Medicaid
inpatient utilization rate as defined in Section 1396r-4 of Title 42
of the United States Code and as set forth in the Final Medi-Cal
Utilization Statistics for the state fiscal year preceding the rebase
calculation year, as calculated by the department as of the retrieval
date.

(ai) “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 obligation owed to the
state in connection with the Medi-Cal program and the hospital is
not, or does not agree to become, financially responsible to the
department for the outstanding monetary obligation in accordance
with subdivision (d) of Section 14169.61.

(aj) “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 most recently filed Annual
Financial Disclosure Report, as of the first day of a program period,
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 most recently
filed Annual Financial Disclosure Report, as of the first day of a
program period, 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.

(ak) “Outpatient base amount” means the total amount of
payments for hospital outpatient services made to a hospital in the
base calendar year, as reflected in the state paid claims files
prepared by the department as of the retrieval date.

(al) “Outpatient supplemental rate” means a fixed proportional
supplemental payment for Medi-Cal outpatient services.

(am) “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, which
exclusively contracts with no more than two medical groups in the
state to provide or arrange for professional medical services for
the enrollees of the plan, as of the effective date of this article.

(an) “Prepaid health plan hospital managed care per diem quality
assurance fee rate” means a fixed fee on non-Medi-Cal managed
care fee days for prepaid health plan hospitals.

(ao) “Prepaid health plan hospital Medi-Cal managed care per
diem quality assurance fee rate” means a fixed fee on Medi-Cal
managed care fee days for prepaid health plan hospitals.

(ap) “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 most recently filed Office of Statewide Health Planning
and Development Annual Financial Disclosure Report, as of the
first day of a program period.

(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.

(5) Is not a nondesignated public hospital or a designated public
hospital.

(aq) “Program period” means a period not to exceed three years
during which a fee model and a supplemental payment model
developed under this article shall be effective. The first program
period shall be the period beginning January 1, 2014, and ending
December 31, 2016, inclusive. The second program period shall
be the period beginning on January 1, 2017, and ending June 30,
2019. Each subsequent program period shall begin on the day
immediately following the last day of the immediately preceding
program period and shall end on the last day of a state fiscal year,
as determined by the department.

(ar) “Quality assurance fee” means the quality assurance fee
assessed pursuant to Section 14169.52 and collected on the basis
of the quarterly quality assurance fee.

(as) (1) “Quarterly 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, divided by four.

(B) The annual managed care days for an individual hospital
multiplied by the managed care per diem quality assurance fee
rate, divided by four.

(C) The annual Medi-Cal days for an individual hospital
multiplied by the Medi-Cal per diem quality assurance fee rate,
divided by four.

(2) “Quarterly 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, divided by four.

(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, divided by four.

(C) The annual Medi-Cal managed care fee days for an
individual hospital multiplied by the prepaid health plan hospital
Medi-Cal managed care per diem quality assurance fee rate, divided
by four.

(D) The annual Medi-Cal fee-for-service days for an individual
hospital multiplied by the Medi-Cal per diem quality assurance
fee rate, divided by four.

(at) “Rebase calculation year” means a state fiscal year during
which the department shall rebase the data, including, but not
limited to, the days data source, used for the following: acute
psychiatric days, annual fee-for-service days, annual managed care
days, annual Medi-Cal days, fee-for-service days, general acute
care days, high acuity days, managed care days, Medi-Cal days,
Medi-Cal fee-for-service days, Medi-Cal managed care days,
Medi-Cal managed care fee days, outpatient base amount, and
transplant days, pursuant to Section 14169.59. Beginning with the
third program period, the rebase calculation year for a program
period shall be the last subject fiscal year of the immediately
preceding program period.

(au) “Rebase year” means the first state fiscal year of a program
period and shall immediately follow a rebase calculation year.

(av) “Retrieval date” means a day for each data element during
the last quarter of the rebase calculation year upon which the
department retrieves the data, including, but not limited to, the
days data source, used for the following: acute psychiatric days,
annual fee-for-service days, annual managed care days, annual
Medi-Cal days, fee-for-service days, general acute care days, high
acuity days, managed care days, Medi-Cal days, Medi-Cal
fee-for-service days, Medi-Cal managed care days, Medi-Cal
managed care fee days, outpatient base amount, and transplant
days, pursuant to Section 14169.59. The retrieval date for each
data element may be a different date within the quarter as
determined to be necessary and appropriate by the department.

(aw) “Subacute supplemental rate” means a fixed proportional
supplemental payment for acute inpatient services based on a
hospital’s prior provision of Medi-Cal subacute services.

(ax) “Subject fiscal quarter” means a state fiscal quarter
beginning on or after the first day of a program period and ending
on or before the last day of a program period.

(ay) “Subject fiscal year” means a state fiscal year beginning
on or after the first day of a program period and ending on or before
the last day of a program period.

(az) “Subject month” means a calendar month beginning on or
after the first day of a program period and ending on or before the
last day of a program period.

(ba) “Transplant days” means the number of Medi-Cal days for
Medicare Severity-Diagnosis Related Groups (MS-DRGs) 1, 2, 5
to 10, inclusive, 14, 15, or 652, according to the Patient Discharge
file from the Office of Statewide Health Planning and Development
for the base calendar year accessed on the retrieval date.

(bb) “Transplant per diem supplemental rate” means a fixed per
diem supplemental payment for transplant days.

(bc) “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.

begin delete SEC. 25. end delete
begin insert SEC. 29. end insert   

Section 14169.52 of the Welfare and Institutions
Code is amended to read:

14169.52.  

(a) There shall be imposed on each general acute
care hospital that is not an exempt facility a quality assurance fee,
except that a quality assurance fee under this article shall not be
imposed on a converted hospital for the periods when the hospital
is a public hospital or a new hospital with respect to a program
period.

(b) The department shall compute the quarterly quality assurance
fee for each subject fiscal year during a program period pursuant
to Section 14169.59.

(c) Subject to Section 14169.63, on the later of the date of the
department’s receipt of federal approval or the first day of each
program period, the following shall commence:

(1) Within 10 business days following receipt of the notice of
federal approval, the department shall send notice to each hospital
subject to the quality assurance fee, which shall contain the
following information:

(A) The date that the state received notice of federal approval.

(B) The quarterly quality assurance fee for each subject fiscal
year.

(C) The date on which each payment is due.

(2) The hospitals shall pay the quarterly quality assurance fee,
based on a schedule developed by the department. The department
shall establish the date that each payment is due, provided that the
first payment shall be due no earlier than 20 days following the
department sending the notice pursuant to paragraph (1), and the
payments shall be paid at least one month apart, but if possible,
the payments shall be paid on a quarterly basis.

(3) Notwithstanding any other provision of this section, the
amount of each hospital’s quarterly quality assurance fee for a
program period that has not been paid by the hospital before 15
days prior to the end of a program period shall be paid by the
hospital no later than 15 days prior to the end of a program period.

(4) Each hospital described in subdivision (a) shall pay the
quarterly quality assurance fees 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.

(d) The quality assurance fee, as assessed pursuant to this
section, shall be paid by each hospital subject to the fee to the
department for deposit in the fund. Deposits may be accepted at
any time and shall be credited toward the program period for which
the fees were assessed. This article shall not affect the ability of a
hospital to pay fees assessed for a program period after the end of
that 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 December 1, 2016, the implementation of the
quality assurance fee pursuant to this article or the supplemental
payments to private hospitals pursuant to this article for the first
program period.

(f) In no case shall the aggregate fees collected in a federal fiscal
year pursuant to this section, former Section 14167.32, Section
14168.32, and Section 14169.32 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 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
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.

(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, to limit the amount of the
proceeds of the quality assurance fee to be used to pay for the
health care coverage of children as provided in Section 14169.53,
to limit any payments for the department’s costs of administration
to the amounts set forth in this article, to maintain and continue
prior reimbursement levels as set forth in Section 14169.68 on the
effective date of that section, and to otherwise comply with all its
obligations set forth in this article, provided that amendments that
arise from, or have as a basis for, 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 shall control for the
purposes of this subdivision.

(l) (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 for a program period under this
article, the fee payments shall be refunded to general acute care
hospitals, pro rata with the amount of quality assurance fee paid
by the hospital in the program period, subject to the limitations of
federal law. If federal rules prohibit the refund described in this
paragraph, the excess funds shall be used as quality assurance fees
for the next program period for general acute care hospitals, pro
rata with the quality assurance fees paid by the hospital for the
program period.

(5) If during the implementation of this article, fee payments
that were due under former Article 5.21 (commencing with Section
14167.1) and former Article 5.22 (commencing with Section
14167.31), or former Article 5.226 (commencing with Section
14168.1) and Article 5.227 (commencing with Section 14168.31),
or Article 5.228 (commencing with Section 14169.1) and Article
5.229 (commencing with Section 14169.31) 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.

begin delete SEC. 26. end delete
begin insert SEC. 30. end insert   

Section 14169.53 of the Welfare and Institutions
Code is amended to read:

14169.53.  

(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 fund. 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) (1) Notwithstanding subdivision (c) of Section 14167.35,
subdivision (b) of Section 14168.33, and subdivision (b) of Section
14169.33, all funds from the proceeds of the fee assessed pursuant
to this article in the fund, together with any interest and dividends
earned on money in the fund, shall 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:

(A) To pay for the department’s staffing and administrative
costs directly attributable to implementing this article, not to exceed
two hundred fifty thousand dollars ($250,000) for each subject
fiscal quarter, exclusive of any federal matching funds.

(B) To pay for the health care coverage, as described in
subdivision (g), except that for the two subject fiscal quarters in
the 2013-14 fiscal year, the amount for children’s health care
coverage shall be one hundred fifty-five million dollars
($155,000,000) for each subject fiscal quarter, exclusive of any
federal matching funds.

(C) To make increased capitation payments to managed health
care plans pursuant to this article and Section 14169.82, including
the nonfederal share of capitation payments to managed health
care plans pursuant to this article and Section 14169.82 for services
provided to individuals who meet the eligibility requirements in
Section 1902(a)(10)(A)(i)(VIII) of Title XIX of the federal Social
Security Act (42 U.S.C. Sec. 1396a(a)(10)(A)(i)(VIII)), and who
meet the conditions described in Section 1905(y) of the federal
Social Security Act (42 U.S.C. Sec. 1396d(y)).

(D) To make increased payments and direct grants to hospitals
pursuant to this article and Section 14169.83, including the
nonfederal share of payments to hospitals under this article and
Section 14169.83 for services provided to individuals who meet
the eligibility requirements in Section 1902(a)(10)(A)(i)(VIII) of
Title XIX of the federal Social Security Act (42 U.S.C. Sec.
1396a(a)(10)(A)(i)(VIII)), and who meet the conditions described
in Section 1905(y) of the federal Social Security Act (42 U.S.C.
Sec. 1396d(y)).

(2) Notwithstanding subdivision (c) of Section 14167.35,
subdivision (b) of Section 14168.33, and subdivision (b) of Section
14169.33, and notwithstanding Section 13340 of the Government
Code, the moneys in the fund shall be continuously appropriated
during the first program period only, without regard to fiscal year,
for the purposes of this article, Article 5.229 (commencing with
Section 14169.31), Article 5.228 (commencing with Section
14169.1), Article 5.227 (commencing with Section 14168.31),
former Article 5.226 (commencing with Section 14168.1), former
Article 5.22 (commencing with Section 14167.31), and former
Article 5.21 (commencing with Section 14167.1).

(3) For subsequent program periods, the moneys in the fund
shall be used, upon appropriation by the Legislature in the annual
Budget Act, for the purposes of this article and Sections 14169.82
and 14169.83.

(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 14169.61, 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 used as
quality assurance fees for the next program period for general acute
care hospitals, pro rata with the amount of quality assurance fees
paid by the hospital for the program period.

(d) Any methodology or other provision specified in 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,
purposes, and intent of this article and are not inconsistent with
the conditions of implementation set forth in Section 14169.72.
The department shall notify the Joint Legislative Budget Committee
and the fiscal and appropriate policy committees of the Legislature
30 days prior to implementation of a modification pursuant to this
subdivision.

(e) The department, in consultation with the hospital community,
shall make adjustments, as necessary, to the amounts calculated
pursuant to Section 14169.52 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) (1) For purposes of this subdivision, the following
definitions shall apply:

(A) “Actual net benefit” means the net benefit determined by
the department for a net benefit period after the conclusion of the
net benefit period using payments and grants actually made, and
fees actually collected, for the net benefit period.

(B) “Aggregate fees” means the aggregate fees collected from
hospitals under this article.

(C) “Aggregate payments” means the aggregate payments and
grants made directly or indirectly to hospitals under this article,
including payments and grants described in Sections 14169.54,
14169.55, 14169.57, and 14169.58, and subdivision (b) of Section
14169.82.

(D) “Net benefit” means the aggregate payments for a net benefit
period minus the aggregate fees for the net benefit period.

(E) “Net benefit period” means a subject fiscal year or portion
thereof that is in a program period and begins on or after July 1,
2014.

(F) “Preliminary net benefit” means the net benefit determined
by the department for a net benefit period prior to the beginning
of that net benefit period using estimated or projected data.

(2) The amount of funding provided for children’s health care
coverage under subdivision (b) for a net benefit period shall be
equal to 24 percent of the net benefit for that net benefit period.

(3) The department shall determine the preliminary net benefit
for all net benefit periods in the first program period before July
1, 2014. The department shall determine the preliminary net benefit
for all net benefit periods in a subsequent program period before
the beginning of the program period.

(4) The department shall determine the actual net benefit and
make the reconciliation described in paragraph (5) for each net
benefit period within six months after the date determined by the
department pursuant to subdivision (h).

(5) For each net benefit period, the department shall reconcile
the amount of moneys in the fund used for children’s health
coverage based on the preliminary net benefit with the amount of
the fund that may be used for children’s health coverage under
this subdivision based on the actual net benefit. For each net benefit
period, any amounts that were in the fund and used for children’s
health coverage in excess of the 24 percent of the actual net benefit
shall be returned to the fund, and the amount, if any, by which 24
percent of the actual net benefit exceeds 24 percent of the
preliminary net benefit shall be available from the fund to the
department for children’s health coverage. The department shall
notify the Joint Legislative Budget Committee and the fiscal and
appropriate policy committees of the Legislature of the results of
the reconciliation for each net benefit period pursuant to this
paragraph within five working days of performing the
reconciliation.

(6) The department shall make all calculations and
reconciliations required by this subdivision in consultation with
the hospital community using data that the department determines
is the best data reasonably available.

(h) After consultation with the hospital community, the
department shall determine a date upon which substantially all
fees have been paid and substantially all supplemental payments,
grants, and rate range increases have been made for a program
period, which date shall be no later than two years after the end
of a program period. After the date determined by the department
pursuant to this subdivision, no further supplemental payments
shall be made under the program period, and any fees collected
with respect to the program period shall be used for a subsequent
program period consistent with this section. Nothing in this
subdivision shall affect the department’s authority to collect quality
assurance fees for a program period after the end of the program
period or after the date determined by the department pursuant to
this subdivision. The department shall notify the Joint Legislative
Budget Committee and fiscal and appropriate policy committees
of that date within five working days of the determination.

(i) Use of the fee proceeds to enhance federal financial
participation pursuant to subdivision (b) shall include use of the
proceeds to supply the nonfederal share, if any, of payments to
hospitals under this article for services provided to individuals
who meet the eligibility requirements in Section
1902(a)(10)(A)(i)(VIII) of Title XIX of the federal Social Security
Act (42 U.S.C. Sec. 1396a(a)(10)(A)(i)(VIII)), and who meet the
conditions described in Section 1905(y) of the federal Social
Security Act (42 U.S.C. Sec. 1396d(y)) such that expenditures for
services provided to the individual are eligible for the enhanced
federal medical assistance percentage described in that section.

begin delete SEC. 27. end delete
begin insert SEC. 31. end insert   

Section 14169.55 of the Welfare and Institutions
Code is amended to read:

14169.55.  

(a) Private hospitals shall be paid supplemental
amounts for the provision of hospital inpatient services for each
subject fiscal quarter in a 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 inpatient
supplemental amounts shall result in payments to hospitals that
equal the applicable federal upper payment limit for the subject
fiscal year, except that with respect to a subject fiscal year that
begins before the start of a program period or that ends after the
end of the program period for which the payments are made, the
inpatient supplemental amounts shall result in payments to hospitals
that equal a percentage of the applicable upper payment limit where
the percentage equals the percentage of the subject fiscal year that
occurs during the program period.

(b) Except as set forth in subdivisions (e) and (f), each private
hospital shall be paid the sum of the following amounts as
applicable for the provision of hospital inpatient services for each
subject fiscal quarter:

(1) A general acute care per diem supplemental rate multiplied
by the hospital’s general acute care days.

(2) An acute psychiatric per diem supplemental rate multiplied
by the hospital’s acute psychiatric days.

(3) A high acuity per diem supplemental rate multiplied by the
number of the hospital’s high acuity days if the hospital’s Medicaid
inpatient utilization rate is less than the percent required to be
eligible to receive disproportionate share replacement funds for
the state fiscal year ending in the base calendar year and greater
than 5 percent and at least 5 percent of the hospital’s general acute
care days are high acuity days.

(4) A high acuity trauma per diem supplemental rate 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.

(5) A transplant per diem supplemental rate multiplied by the
number of the hospital’s transplant days if the hospital’s Medicaid
inpatient utilization rate is less than the percent required to be
eligible to receive disproportionate share replacement funds for
the state fiscal year ending in the base calendar year and greater
than 5 percent.

(6) A payment for hospital inpatient services equal to the
subacute supplemental rate multiplied by the Medi-Cal subacute
payments as reflected in the state paid claims file prepared by the
department as of the retrieval date for the base calendar year if the
private hospital provided Medi-Cal subacute services during the
base calendar year.

(c) 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
an upper payment limit or for any other reason, both of the
following shall apply:

(1) 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.

(2) 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).

(d) 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.

(e) Payments shall not be made under this section for the periods
when a hospital is a new hospital during a program period.

(f) Payments shall be made to a converted hospital that converts
during a subject fiscal quarter by multiplying the hospital’s
supplemental payment as calculated in subdivision (b) by the
number of days that the hospital was a private hospital in the
subject fiscal quarter, divided by the number of days in the subject
fiscal quarter. Payments shall not be made to a converted hospital
in any subsequent subject fiscal quarter.

begin delete SEC. 28. end delete
begin insert SEC. 32. end insert   

Section 14169.56 of the Welfare and Institutions
Code is amended to read:

14169.56.  

(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) (1) Subject to the limitation in paragraph (2), the increased
capitation payments shall be made as part of the monthly capitated
payments made by the department to managed health care plans.
The aggregate amount of increased capitation payments to all
Medi-Cal managed health care plans for each subject fiscal year,
or portion thereof, shall be the maximum amount for which federal
financial participation is available on an aggregate statewide basis
for the applicable subject fiscal year within a program period, or
portion thereof.

(2) (A) The limitation in subparagraph (B) shall be applied with
respect to a subject fiscal year or portion thereof for which the
federal matching assistance percentage is less than 90 percentage
for expenditures for services furnished to individuals who meet
the eligibility requirements in Section 1902(a)(10)(A)(i)(VIII) of
Title XIX of the federal Social Security Act (42 U.S.C. Sec.
1396a(a)(10)(A)(i)(VIII)), and who meet the conditions described
in Section 1905(y) of the federal Social Security Act (42 U.S.C.
Sec. 1396d(y)).

(B) During a subject fiscal year or portion thereof described in
subparagraph (A), the aggregate amount of the increased capitation
payments under this section shall not exceed the aggregate amount
of the increased capitation payments that would be made if the
nonfederal share of the increased capitation payments were the
amount that the nonfederal share would have been if the federal
matching assistance percentage were 90 percent for expenditures
for services furnished to individuals who meet the eligibility
requirements in Section 1902(a)(10)(A)(i)(VIII) of Title XIX of
the federal Social Security Act (42 U.S.C. Sec.
1396a(a)(10)(A)(i)(VIII)), and who meet the conditions described
in Section 1905(y) of the federal Social Security Act (42 U.S.C.
Sec. 1396d(y)).

(c) The department shall determine the amount of the increased
capitation payments for each managed health care plan for each
subject fiscal year or portion thereof during a program period. 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 ensure access to
high-quality hospital services by the plan’s enrollees.

(d) 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.

(e) (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 within 90
days after 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) To secure the necessary funding for the payment or payments
made pursuant to paragraph (1), the department may accumulate
funds in the 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 the end of a program period.

(f) 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 payments under this section.

(g) (1) Each managed health care plan shall expend 100 percent
of any increased capitation payments it receives under this section
on hospital services as provided in Section 14169.57.

(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 department.

(h) (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
a program period shall be made after accounting for all federal
financial participation necessary for full implementation of Section
14182.15 for that month.

begin delete SEC. 29. end delete
begin insert SEC. 33. end insert   

Section 14169.58 of the Welfare and Institutions
Code is amended to read:

14169.58.  

(a) (1) For the first program period, 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 this
article. For the first program period, the aggregate amount of the
grants to designated public hospitals funded by the quality
assurance fee set forth in this article shall be forty-five million
dollars ($45,000,000) in the aggregate for the two subject fiscal
quarters in the 2013-14 subject fiscal year, ninety-three million
dollars ($93,000,000) for the 2014-15 subject fiscal year, one
hundred ten million five hundred thousand dollars ($110,500,000)
for the 2015-16 subject fiscal year, and sixty-two million five
hundred thousand dollars ($62,500,000) in the aggregate for the
two subject fiscal quarters in the 2016-17 subject fiscal year.

(2) (A) Of the direct grant amounts set forth in paragraph (1),
the director shall allocate twenty-four million five hundred
thousand dollars ($24,500,000) in the aggregate for the two subject
fiscal quarters in the 2013-14 subject fiscal year, fifty million five
hundred thousand dollars ($50,500,000) for the 2014-15 subject
fiscal year, sixty million five hundred thousand dollars
($60,500,000) for the 2015-16 subject fiscal year, and thirty-four
million five hundred thousand dollars ($34,500,000) in the
aggregate for the two subject fiscal quarters in the 2016-17 subject
fiscal year among the designated public hospitals pursuant to a
methodology developed in consultation with the designated public
hospitals.

(B) Of the direct grant amounts set forth in subparagraph (A),
the director shall distribute six million one hundred twenty-five
thousand dollars ($6,125,000) for each subject fiscal quarter in the
2013-14 subject fiscal year, six million three hundred twelve
thousand five hundred dollars ($6,312,500) for each subject fiscal
quarter in the 2014-15 subject fiscal year, seven million five
hundred sixty-two thousand five hundred dollars ($7,562,500) for
each subject fiscal quarter in the 2015-16 subject fiscal year, and
eight million six hundred twenty-five thousand dollars ($8,625,000)
for each subject fiscal quarter in the 2016-17 subject fiscal year
in accordance with the timeframes specified in subdivision (a) of
Section 14169.66.

(C) Of the direct grant amounts set forth in subparagraph (A),
the director shall distribute six million one hundred twenty-five
thousand dollars ($6,125,000) for each subject fiscal quarter in the
2013-14 subject fiscal year, six million three hundred twelve
thousand five hundred dollars ($6,312,500) for each subject fiscal
quarter in the 2014-15 subject fiscal year, seven million five
hundred sixty-two thousand five hundred dollars ($7,562,500) for
each subject fiscal quarter in the 2015-16 subject fiscal year, and
eight million six hundred twenty-five thousand dollars ($8,625,000)
for each subject fiscal quarter in the 2016-17 subject fiscal year
only upon 100 percent of the rate range increases being distributed
to managed health care plans pursuant to subparagraph (D) for the
respective subject fiscal quarter. If the rate range increases pursuant
to subparagraph (D) are distributed to managed health care plans,
the direct grant amounts described in this subparagraph shall be
distributed to designated public hospitals no later than 30 days
after the rate range increases have been distributed to managed
health care plans pursuant to subparagraph (D).

(D) Of the direct grant amounts set forth in paragraph (1), twenty
million five hundred thousand dollars ($20,500,000) in the
aggregate for the two subject fiscal quarters in the 2013-14 subject
fiscal year, forty-two million five hundred thousand dollars
($42,500,000) for the 2014-15 subject fiscal year, fifty million
dollars ($50,000,000) for the 2015-16 subject fiscal year, and
twenty-eight million dollars ($28,000,000) in the aggregate for the
two subject fiscal quarters in the 2016-17 subject fiscal year shall
be withheld from payment to the designated public hospitals by
the director, and shall be used as the nonfederal share for rate range
increases, as defined in paragraph (4) of subdivision (b) of Section
14301.4, to risk-based payments to managed care health plans that
contract with the department to serve counties where a designated
public hospital is located. The rate range increases shall apply to
managed care rates for beneficiaries other than newly eligible
beneficiaries, as defined in subdivision (s) of Section 17612.2, and
shall enable plans to compensate hospitals for Medi-Cal health
services and to support the Medi-Cal program. Each managed
health care plan shall expend 100 percent of the rate range increases
on hospital services within 30 days of receiving the increased
payments. Rate range increases funded under this subparagraph
shall be allocated among plans pursuant to a methodology
developed in consultation with the hospital community.

(3) Notwithstanding any other provision of law, any amounts
withheld from payment to the designated public hospitals by the
director as the nonfederal share for rate range increases, including
those described in subparagraph (D) of paragraph (2), shall not be
considered hospital fee direct grants as defined under subdivision
(k) of Section 17612.2 and shall not be included in the
determination under paragraph (1) of subdivision (a) of Section
17612.3.

(b) (1) For the first program period, nondesignated 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 this
article. For the first program period, the aggregate amount of the
grants funded by the quality assurance fee set forth in this article
to nondesignated public hospitals shall be twelve million five
hundred thousand dollars ($12,500,000) in the aggregate for two
subject fiscal quarters in the 2013-14 subject fiscal year,
twenty-five million dollars ($25,000,000) for the 2014-15 subject
fiscal year, thirty million dollars ($30,000,000) for the 2015-16
subject fiscal year, and seventeen million five hundred thousand
dollars ($17,500,000) in the aggregate for the two subject fiscal
quarters in the 2016-17 subject fiscal year.

(2) (A) Of the direct grant amounts set forth in paragraph (1),
the director shall allocate two million five hundred thousand dollars
($2,500,000) in the aggregate for the two subject fiscal quarters
in the 2013-14 subject fiscal year, five million dollars ($5,000,000)
for the 2014-15 subject fiscal year, six million dollars ($6,000,000)
for the 2015-16 subject fiscal year, and three million five hundred
thousand dollars ($3,500,000) in the aggregate for the two subject
fiscal quarters in the 2016-17 subject fiscal year among the
nondesignated public hospitals pursuant to a methodology
developed in consultation with the nondesignated public hospitals.

(B) Of the direct grant amounts set forth in paragraph (1), ten
million dollars ($10,000,000) in the aggregate for the two subject
fiscal quarters in the 2013-14 subject fiscal year, twenty million
dollars ($20,000,000) for the 2014-15 subject fiscal year,
twenty-four million dollars ($24,000,000) for the 2015-16 subject
fiscal year, and fourteen million dollars ($14,000,000) in the
aggregate for the two subject fiscal quarters in the 2016-17 subject
fiscal year shall be withheld from payment to the nondesignated
public hospitals by the director, and shall be used as the nonfederal
share for rate range increases, as defined in paragraph (4) of
subdivision (b) of Section 14301.4, to risk-based payments to
managed care health plans that contract with the department. The
rate range increases shall enable plans to compensate hospitals for
Medi-Cal health services and to support the Medi-Cal program.
Each managed health care plan shall expend 100 percent of the
rate range increases on hospital services within 30 days of receiving
the increased payments. Rate range increases funded under this
subparagraph shall be allocated among plans pursuant to a
methodology developed in consultation with the hospital
community.

(c) If the amounts set forth in this section for rate range increases
are not actually used for rate range increases as described in this
section, the direct grant amounts set forth in this section that are
withheld pursuant to subparagraph (D) of paragraph (2) of
subdivision (a) and subparagraph (B) of paragraph (2) of
subdivision (b) shall be returned begin insert to end insert the fund subject to paragraph
(4) of subdivision (l) of Section 14169.52.

(d) For subsequent program periods, designated public hospitals
and nondesignated public hospitals may be paid direct grants
pursuant to subdivision (e) of Section 14169.59 upon appropriation
in the annual Budget Act.

begin delete SEC. 30. end delete
begin insert SEC. 34. end insert   

Section 14169.59 of the Welfare and Institutions
Code is amended to read:

14169.59.  

(a) The department shall determine during each
rebase calculation year the number of subject fiscal years in the
next program period.

(b) During each rebase calculation year, the department shall
retrieve the data, including, but not limited to, the days data source,
used to determine the following for the subsequent program period:
acute psychiatric days, annual fee-for-service days, annual managed
care days, annual Medi-Cal days, fee-for-service days, general
acute care days, high acuity days, managed care days, Medi-Cal
days, Medi-Cal fee-for-service days, Medi-Cal managed care days,
Medi-Cal managed care fee days, outpatient base amount, and
transplant days. The department shall pull data from the most
recent base calendar year for which the department determines
reliable data is available for all hospitals.

(c) (1) During each rebase calculation year, the department
shall determine all of the following supplemental payment rates
for the subsequent program period, which supplemental payment
rates shall be specified in provisional language in the annual Budget
Act:

(A) The acute psychiatric per diem supplemental rate for each
subject fiscal year during the program period.

(B) The general acute care per diem supplemental rate for each
subject fiscal year during the program period.

(C) The high acuity per diem supplemental rate for each subject
fiscal year during the program period.

(D) The high acuity trauma per diem supplemental rate for each
subject fiscal year during the program period.

(E) The outpatient supplemental rate for each subject fiscal year
during the program period.

(F) The subacute supplemental rate for each subject fiscal year
during the program period.

(G) The transplant per diem supplemental rate for each subject
fiscal year during the program period.

(2) During each rebase calculation year, the department shall
determine all of the following fee rates for the subsequent program
period, which fee rates shall be specified in provisional language
in the annual Budget Act:

(A) The fee-for-service per diem quality assurance fee rate for
each subject fiscal year during the program period.

(B) The managed care per diem quality assurance fee rate for
each subject fiscal year during the program period.

(C) The Medi-Cal per diem quality assurance fee rate for each
subject fiscal year during the program period.

(D) The prepaid health plan hospital managed care per diem
quality assurance fee rate for each subject fiscal year during the
program period.

(E) The prepaid health plan hospital Medi-Cal managed care
per diem quality assurance fee rate for each subject fiscal year
during the program period.

(d) The department shall determine the rates set forth in
subdivision (c) based on the data retrieved pursuant to subdivision
(b). Each rate determined by the department shall be the same for
all hospitals to which the rate applies. These rates shall be specified
in provisional language in the annual Budget Act. The department
shall determine the rates in accordance with all of the following:

(1) The rates shall meet the requirements of federal law and be
established in a manner to obtain federal approval.

(2) The department shall consult with the hospital community
in determining the rates.

(3) The supplemental payments and other Medi-Cal payments
for hospital outpatient services furnished by private hospitals for
each fiscal year shall equal as close as possible the applicable
federal upper payment limit.

(4) The supplemental payments and other Medi-Cal payments
for hospital inpatient services furnished by private hospitals for
each fiscal year shall equal as close as possible the applicable
federal upper payment limit.

(5) The increased capitation payments to managed health care
plans shall result in the maximum payments to the plans permitted
by federal law.

(6) The quality assurance fee proceeds shall be adequate to make
the expenditures described in this article, but shall not be more
than necessary to make the expenditures.

(7) The relative values of per diem supplemental payment rates
to one another for the various categories of patient days shall be
generally consistent with the relative values during the first
program period under this article.

(8) The relative values of per diem fee rates to one another for
the various categories of patient days shall be generally consistent
with the relative values during the first program period under this
article.

(9) The rates shall result in supplemental payments and quality
assurance fees that are consistent with the purposes of this article.

(e) During each rebase calculation year, the director shall
determine the amounts and allocation methodology, if any, of
direct grants to designated public hospitals and nondesignated
public hospitals for each subject fiscal year in a program period,
in consultation with the hospital community. The amounts and
allocation methodology may include a withhold of direct grants
to be used as the nonfederal share for rate range increases. These
amounts shall be specified in provisional language in the annual
Budget Act.

(f) (1) Notwithstanding any other provision in this article, the
following shall apply to the first program period under this article:

(A) The first program period under this article shall be the period
from January 1, 2014, to December 31, 2016, inclusive.

(B) The acute psychiatric days shall be those identified in the
Final Medi-Cal Utilization Statistics for the 2012-13 state fiscal
year as calculated by the department as of December 17, 2012.

(C) The days data source shall be the hospital’s Annual Financial
Disclosure Report filed with the Office of Statewide Health
Planning and Development as of June 6, 2013, for its fiscal year
ending during the 2010 calendar year.

(D) The general acute care days shall be those identified in the
2010 calendar year, as reflected in the state paid claims file on
April 26, 2013.

(E) The high acuity days shall be those paid during the 2010
calendar year, as reflected in the state paid claims file prepared by
the department on April 26, 2013.

(F) The Medi-Cal managed care days shall be those identified
in the Final Medi-Cal Utilization Statistics for the 2012-13 fiscal
year, as calculated by the department as of December 17, 2012.

(G) The outpatient base amount shall be those payments for
outpatient services made to a hospital in the 2010 calendar year,
as reflected in the state paid claims files prepared by the department
on April 26, 2013.

(H) The transplant days shall be those identified in the 2010
Patient Discharge file from the Office of Statewide Health Planning
and Development accessed on June 28, 2011.

(I) With respect to a hospital described in subdivision (f) of
Section 14165.50, both of the following shall apply:

(i) The hospital shall not be considered a new hospital as defined
in Section 14169.51 for the purposes of this article.

(ii) To the extent permitted by federal law and other federal
requirements, the department shall use the best available and
reasonable current estimates or projections made with respect to
the hospital for an annual period as the data, including, but not
limited to, the days data source and data described as being derived
from a state paid claims file, used for all purposes, including, but
not limited to, the calculation of supplemental payments and the
quality assurance fee. The estimates and projections shall be
deemed to reflect paid claims and shall be used for each data
element regardless of the time period otherwise applicable to the
data element. The data elements include, but are not limited to,
acute psychiatric days, annual fee-for-service days, annual managed
care days, annual Medi-Cal days, fee-for-service days, general
acute care days, high acuity days, managed care days, Medi-Cal
days, Medi-Cal fee-for-service days, Medi-Cal managed care days,
Medi-Cal managed care fee days, outpatient base amount, and
transplant days.

(2) Notwithstanding any other provision in this article, the
following shall apply to determine the supplemental payment rates
for the first program period:

(A) The acute psychiatric per diem supplemental rate shall be
nine hundred sixty-five dollars ($965) for the two remaining subject
fiscal quarters in the 2013-14 subject fiscal year, nine hundred
seventy dollars ($970) for the subject fiscal quarters in the 2014-15
subject fiscal year, nine hundred seventy-five dollars ($975) for
the subject fiscal quarters in the 2015-16 subject fiscal year and
nine hundred seventy-five dollars ($975) for the first two subject
fiscal quarters in the 2016-17 subject fiscal year.

(B) The general acute care per diem supplemental rate shall be
eight hundred twenty-four dollars and forty cents ($824.40) for
the two remaining subject fiscal quarters in the 2013-14 subject
fiscal year, one thousand one hundred ten dollars and sixty-seven
cents ($1,110.67) for the subject fiscal quarters in the 2014-15
subject fiscal year, one thousand three hundred thirty-five dollars
and forty-two cents ($1,335.42) for the subject fiscal quarters in
the 2015-16 subject fiscal year, and one thousand four hundred
forty-one dollars and twenty cents ($1,441.20) for the first two
subject fiscal quarters in the 2016-17 subject fiscal year.

(C) The high acuity per diem supplemental rate shall be two
thousand five hundred dollars ($2,500) for the two remaining
subject fiscal quarters in the 2013-14 subject fiscal year, two
thousand five hundred dollars ($2,500) for the subject fiscal
quarters in the 2014-15 subject fiscal year, two thousand five
hundred dollars ($2,500) for the subject fiscal quarters in the
2015-16 subject fiscal year, and two thousand five hundred dollars
($2,500) for the first two subject fiscal quarters in the 2016-17
subject fiscal year.

(D) The high acuity trauma per diem supplemental rate shall be
two thousand five hundred dollars ($2,500) for the two remaining
subject fiscal quarters in the 2013-14 subject fiscal year, two
thousand five hundred dollars ($2,500) for the subject fiscal
quarters in the 2014-15 subject fiscal year, two thousand five
hundred dollars ($2,500) for the subject fiscal quarters in the
2015-16 subject fiscal year, and two thousand five hundred dollars
($2,500) for the first two subject fiscal quarters in the 2016-17
subject fiscal year.

(E) The outpatient supplemental rate shall be 119 percent of the
outpatient base amount for the two remaining subject fiscal quarters
in the 2013-14 subject fiscal year, 268 percent of the outpatient
base amount for the subject fiscal quarters in the 2014-15 subject
fiscal year, 292 percent of the outpatient base amount for the
subject fiscal quarters in the 2015-16 subject fiscal year, and 151
percent of the outpatient base amount for the first two subject fiscal
quarters in the 2016-17 subject fiscal year.

(F) The subacute supplemental rate shall be 50 percent for the
two remaining subject fiscal quarters in the 2013-14 subject fiscal
year, 55 percent for the subject fiscal quarters in the 2014-15
subject fiscal year, 60 percent for the subject fiscal quarters in the
2015-16 subject fiscal year, and 60 percent for the first two subject
fiscal quarters in the 2016-17 subject fiscal year of the Medi-Cal
subacute payments paid by the department to the hospital during
the 2010 calendar year, as reflected in the state paid claims file
prepared by the department on April 26, 2013.

(G) The transplant per diem supplemental rate shall be two
thousand five hundred dollars ($2,500) for the two remaining
subject fiscal quarters in the 2013-14 subject fiscal year, two
thousand five hundred dollars ($2,500) for the subject fiscal
quarters in the 2014-15 subject fiscal year, two thousand five
hundred dollars ($2,500) for the subject fiscal quarters in the
2015-16 subject fiscal year, and two thousand five hundred dollars
($2,500) for the first two subject fiscal quarters in the 2016-17
subject fiscal year.

(3) Notwithstanding any other provision in this article, the
following shall apply to determine the fee rates for the first program
period:

(A) The fee-for-service per diem quality assurance fee rate shall
be three hundred seventy-four dollars and ninety-one cents
($374.91) for the two remaining subject fiscal quarters in the
2013-14 subject fiscal year, four hundred twenty-five dollars and
twenty-two cents ($425.22) for the subject fiscal quarters in the
2014-15 subject fiscal year, four hundred eighty dollars and eleven
cents ($480.11) for the subject fiscal quarters in the 2015-16
subject fiscal year, and five hundred forty-two dollars and ten cents
($542.10) for the first two subject fiscal quarters in the 2016-17
subject fiscal year.

(B) The managed care per diem quality assurance fee rate shall
be one hundred forty-five dollars ($145) for the two remaining
subject fiscal quarters in the 2013-14 subject fiscal year, one
hundred forty-five dollars ($145) for the subject fiscal quarters in
the 2014-15 subject fiscal year, one hundred seventy dollars ($170)
for the subject fiscal quarters in the 2015-16 subject fiscal year,
and one hundred seventy dollars ($170) for the first two subject
fiscal quarters in the 2016-17 subject fiscal year.

(C) The Medi-Cal per diem quality assurance fee rate shall be
four hundred fifty-seven dollars and ten cents ($457.10) for the
two remaining subject fiscal quarters in the 2013-14 subject fiscal
year, four hundred ninety-seven dollars and eight cents ($497.08)
for the subject fiscal quarters in the 2014-15 subject fiscal year,
five hundred sixty-eight dollars and fifteen cents ($568.15) for the
subject fiscal quarters in the 2015-16 subject fiscal year, and six
hundred eighteen dollars and fourteen cents ($618.14) for the first
two subject fiscal quarters in the 2016-17 subject fiscal year.

(D) The prepaid health plan hospital managed care per diem
quality assurance fee rate shall be eighty-one dollars and twenty
cents ($81.20) for the two remaining subject fiscal quarters in the
2013-14 subject fiscal year, eighty-one dollars and twenty cents
($81.20) for the subject fiscal quarters in the 2014-15 subject fiscal
year, ninety-five dollars and twenty cents ($95.20) for the subject
fiscal quarters in the 2015-16 subject fiscal year, and ninety-five
dollars and twenty cents ($95.20) for the first two subject fiscal
quarters in the 2016-17 subject fiscal year.

(E) The prepaid health plan hospital Medi-Cal managed care
per diem quality assurance fee rate shall be two hundred fifty-five
dollars and ninety-seven cents ($255.97) for the two remaining
subject fiscal quarters in the 2013-14 subject fiscal year, two
hundred seventy-eight dollars and thirty-seven cents ($278.37) for
the subject fiscal quarters in the 2014-15 subject fiscal year, three
hundred eighteen dollars and sixteen cents ($318.16) for the subject
fiscal quarters in the 2015-16 subject fiscal year, and three hundred
forty-six dollars and sixteen cents ($346.16) for the first two subject
fiscal quarters in the 2016-17 subject fiscal year.

(F) Upon federal approval or conditional federal approval
described in Section 14169.63, the director shall have the discretion
to revise the fee-for-service per diem quality assurance fee rate,
the managed care per diem quality assurance fee rate, the Medi-Cal
per diem quality assurance fee rate, the prepaid health plan hospital
managed care per diem quality assurance fee rate, or the prepaid
health plan hospital Medi-Cal managed care per diem quality
assurance fee rate, based on the funds required to make the
payments specified in this article, in consultation with the hospital
community.

(g) Notwithstanding any other provision in this article, the
following shall apply to the second program period under this
article:

(1) The second program period under this article shall begin on
January 1, 2017, and shall end on June 30, 2019.

(2) The retrieval date shall occur between October 1, 2016, and
December 31, 2016.

(3) The base calendar year shall be the 2013 calendar year, or
a more recent calendar year for which the department determines
reliable data is available.

(4) The rebase calculation year shall be the 2015-16 state fiscal
year.

(5) With respect to a hospital described in subdivision (f) of
Section 14165.50, both of the following shall apply:

(A) The hospital shall not be considered a new hospital as
defined in subdivision (ai) of Section 14169.51 for the purposes
of this article.

(B) To the extent permitted by federal law or other federal
requirements, the department shall use the best available and
reasonable current estimates or projections made with respect to
the hospital for an annual period as to the data, including, but not
limited to, the days data source and data described as being derived
from a state paid claims file, used for all purposes, including, but
not limited to, the calculation of supplemental payments and the
quality assurance fee. The estimates and projections shall be
deemed to reflect paid claims and shall be used for each data
element regardless of the time period otherwise applicable to the
data element. The data elements include, but are not limited to,
acute psychiatric days, annual fee-for-service days, annual managed
care days, annual Medi-Cal days, fee-for-service days, general
acute care days, high acuity days, managed care days, Medi-Cal
days, Medi-Cal fee-for-service days, Medi-Cal managed care days,
Medi-Cal managed care fee days, outpatient base amount, and
transplant days.

begin delete

(i) 

end delete

begin insert (h) end insert begin insert   end insert Commencing January 2016, the department shall provide a
clear narrative description along with fiscal detail in the Medi-Cal
estimate package, submitted to the Legislature in January and May
of each year, of all of the calculations made by the department
pursuant to this section for the second program period and every
program period thereafter.

begin delete SEC. 31. end delete
begin insert SEC. 35. end insert   

Section 14169.61 of the Welfare and Institutions
Code is amended to read:

14169.61.  

(a) (1) Except as provided in this section, all data
and other information relating to a hospital that are used for the
purposes of this article, including, without limitation, the days data
source, shall continue to be used to determine the payments to that
hospital, regardless of whether the hospital has undergone one or
more changes of ownership.

(2) All supplemental payments to a hospital under this article
shall be made to the licensee of a hospital on the date the
supplemental payment is made. All quality assurance fee payments
under this article shall be paid by the licensee of a hospital on the
date the quarterly quality assurance fee payment is due.

(b) The data of separate facilities prior to a consolidation shall
be aggregated for the purposes of this article if: (1) a private
hospital consolidates with another private hospital, (2) the facilities
operate under a consolidated hospital license, (3) data for a period
prior to the consolidation is used for purposes of this article, and
(4) neither hospital has had a change of ownership on or after the
effective date of this article unless paragraph (2) of subdivision
(d) has been satisfied by the new owner. Data of a facility that was
a separately licensed hospital prior to the consolidation shall not
be included in the data, including the days data source, for the
purpose of determining payments to the facility or the quality
assurance fees due from the facility under the article for any time
period during which the facility is closed. A facility shall be
deemed to be closed for purposes of this subdivision on the first
day of any period during which the facility has no general acute,
psychiatric, or rehabilitation inpatients for at least 30 consecutive
days. A facility that has been deemed to be closed under this
subdivision shall no longer be deemed to be closed on the first
subsequent day on which it has general acute, psychiatric, or
rehabilitation inpatients.

(c) The payments to a hospital under this article shall not be
made, and the quality assurance fees shall not be due, for any
period during which the hospital is closed. A hospital shall be
deemed to be closed on the first day of any period during which
the hospital has no general acute, psychiatric begin insert , end insert or rehabilitation
inpatients for at least 30 consecutive days. A hospital that has been
deemed to be closed under this subdivision shall no longer be
deemed to be closed on the first subsequent day on which it has
general acute, psychiatric begin insert , end insert or rehabilitation inpatients. Payments
under this article to a hospital and installment payments of the
aggregate quality assurance fee due from a hospital that is closed
during any portion of a subject fiscal quarter shall be reduced by
applying a fraction, expressed as a percentage, the numerator of
which shall be the number of days during the applicable subject
fiscal quarter that the hospital is closed during the subject fiscal
year and the denominator of which shall be the number of days in
the subject fiscal quarter.

(d) The following provisions shall apply only for purposes of
this article, and shall have no application outside of this article nor
shall they affect the assumption of any outstanding monetary
obligation to the Medi-Cal program:

(1) The director shall develop and describe in provider bulletins
and on the department’s Internet Web site a process by which the
new operator of a hospital that has a days data source in whole or
in part from a previous operator may enter into an agreement with
the department to confirm that it is financially responsible or to
become financially responsible to the department for the
outstanding monetary obligation to the Medi-Cal program of the
previous operator in order to avoid being classified as a new
hospital for purposes of this article. This process shall be available
for changes of ownership that occur before, on, or after January
1, 2014, but only in regard to payments under this article and
otherwise shall have no retroactive effect.

(2) The outstanding monetary obligation referred to in
subdivision (ai) of Section 14169.51 shall include responsibility
for all of the following:

(A) Payment of the quality assurance fee established pursuant
to this article.

(B) Known overpayments that have been asserted by the
department or its fiscal intermediary by sending a written
communication that is received by the hospital prior to the date
that the new operator becomes the licensee of the hospital.

(C) Overpayments that are asserted after such date and arise
from customary reconciliations of payments, such as cost report
settlements, and, with the exception of overpayments described in
subparagraph (B), shall exclude liabilities arising from the
fraudulent or intentionally criminal act of a prior operator if the
new operator did not knowingly participate in or continue the
fraudulent or criminal act after becoming the licensee.

(3) The department shall have the discretion to determine
whether the new owner properly and fully agreed to be financially
responsible for the outstanding monetary obligation in connection
with the Medi-Cal program and seek additional assurances as the
department deems necessary, except that a new owner that executes
an agreement with the department to be financially responsible for
the monetary obligations as described in paragraph (1) shall be
conclusively deemed to have agreed to be financially responsible
for the outstanding monetary obligation in connection with the
Medi-Cal program. The department shall have the discretion to
establish the terms for satisfying the outstanding monetary
obligation in connection with the Medi-Cal program, including,
but not limited to, recoupment from amounts payable to the hospital
under this section.

begin delete SEC. 32. end delete
begin insert SEC. 36. end insert   

Section 14169.63 of the Welfare and Institutions
Code is amended to read:

14169.63.  

(a) Notwithstanding any other provision of this
article requiring federal approvals, the department may impose
and collect the quality assurance fee and may make payments
under this article, including increased capitation payments, based
upon receiving a letter from the federal Centers for Medicare and
Medicaid Services or the United States Department of Health and
Human Services that indicates likely federal approval, but only if
and to the extent that the letter is sufficient as set forth in
subdivision (b).

(b) In order for the letter to be sufficient under this section, the
director shall find that the letter meets both of the following
requirements:

(1) The letter is in writing and signed by an official of the federal
Centers for Medicare and Medicaid Services or an official of the
United States Department of Health and Human Services.

(2) The director, after consultation with the hospital community,
has determined, in the exercise of his or her sole discretion, that
the letter provides a sufficient level of assurance to justify advanced
implementation of the fee and payment provisions.

(c) Nothing in this section shall be construed as modifying the
requirement under Section 14169.69 that payments shall be made
only to the extent a sufficient amount of funds collected as the
quality assurance fee are available to cover the nonfederal share
of those payments.

(d) Upon notice from the federal government that final federal
approval for the fee model under this article or for the supplemental
payments to private hospitals under Section 14169.54 or 14169.55
has been denied, any fees collected pursuant to this section shall
be refunded and any payments made pursuant to this article shall
be recouped, including, but not limited to, supplemental payments
and grants, increased capitation payments, payments to hospitals
by health care plans resulting from the increased capitation
payments, and payments for the health care coverage of children.
To the extent fees were paid by a hospital that also received
payments under this section, the payments may first be recouped
from fees that would otherwise be refunded to the hospital prior
to the use of any other recoupment method allowed under law.

(e) Any payment made pursuant to this section shall be a
conditional payment until final federal approval has been received.

(f) The director shall have broad authority under this section to
collect the quality assurance fee for an interim period after receipt
of the letter described in subdivision (a) pending receipt of all
necessary federal approvals. This authority shall include discretion
to determine both of the following:

(1) Whether the quality assurance fee should be collected on a
full or pro rata basis during the interim period.

(2) The dates on which payments of the quality assurance fee
are due.

(g) The department may draw against the fund for all
administrative costs associated with implementation under this
article, consistent with subdivision (b) of Section 14169.53.

(h) This section shall be implemented only to the extent federal
financial participation is not jeopardized by implementation prior
to the receipt of all necessary final federal approvals.

begin delete SEC. 33. end delete
begin insert SEC. 37. end insert   

Section 14169.65 of the Welfare and Institutions
Code is amended to read:

14169.65.  

(a) Upon receipt of a letter that indicates likely
federal approval that the director determines is sufficient for
implementation under Section 14169.63, or upon the receipt of
federal approval, the following shall occur:

(1) To the maximum extent possible, and consistent with the
availability of funds in the fund, the department shall make all of
the payments under Sections 14169.54, 14169.55, and 14169.56,
including, but not limited to, supplemental payments and increased
capitation payments, prior to the end of a program period, except
that the increased capitation payments under Section 14169.56
shall not be made until federal approval is obtained for these
payments.

(2) The department shall make supplemental payments to
hospitals under this article consistent with the timeframe described
in Section 14169.66 or a modified timeline developed pursuant to
Section 14169.64.

(b) If any payment or payments made pursuant to this section
are found to be inconsistent with federal law, the department shall
recoup the payments by means of withholding or any other
available remedy.

(c) This section shall not affect the department’s ongoing
authority to continue, after the end of a program period, to collect
quality assurance fees imposed on or before the end of the program
period.

begin delete SEC. 34. end delete
begin insert SEC. 38. end insert   

Section 14169.66 of the Welfare and Institutions
Code is amended to read:

14169.66.  

The department shall make disbursements from the
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 14169.53, except
that funds may be set aside for increased capitation payments to
managed care health plans pursuant to subdivision (e) of Section
14169.56.

(c) The funds shall be disbursed in each payment cycle in
accordance with the order of priority set forth in subdivision (b)
of Section 14169.53 as modified by subdivision (b), and so that
the supplemental payments and direct grants to hospitals and the
increased capitation payments to managed health care plans 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 fund and the timing of federal approvals,
the supplemental payments and direct grants to hospitals and
increased capitation payments to managed health care plans under
this article shall be made before the last day of a program period.

(e) The aggregate amount of funds to be disbursed to private
hospitals shall be determined under Sections 14169.54 and
14169.55. The aggregate amount of funds to be disbursed to
managed health care plans shall be determined under Section
14169.56. The aggregate amount of direct grants to designated
and nondesignated public hospitals shall be determined under
Section 14169.58.

begin delete SEC. 35. end delete
begin insert SEC. 39. end insert   

Section 14169.72 of the Welfare and Institutions
Code is amended to read:

14169.72.  

This article shall become inoperative if any of the
following occurs:

(a) The effective date of a final judicial determination made by
any court of appellate jurisdiction or a final determination by the
United States Department of Health and Human Services or the
federal Centers for Medicare and Medicaid Services that the quality
assurance fee established pursuant to this article, or Section
14169.54 or 14169.55, cannot be implemented. This subdivision
shall not apply to any final judicial determination made by any
court of appellate jurisdiction in a case brought by hospitals located
outside the state.

(b) The federal Centers for Medicare and Medicaid Services
denies approval for, or does not approve on or before the last day
of a program period, the implementation of Sections 14169.52,
14169.53, 14169.54, and 14169.55, and the department fails to
modify Section 14169.52, 14169.53, 14169.54, or 14169.55
pursuant to subdivision (d) of Section 14169.53 in order to meet
the requirements of federal law or to obtain federal approval.

(c) A final judicial determination by the California Supreme
Court or any California Court of Appeal that the revenues collected
pursuant to this article that are deposited in the fund are either of
the following:

(1) “General Fund proceeds of taxes appropriated pursuant to
Article XIII B of the California Constitution,” as used in
subdivision (b) of Section 8 of Article XVI of the California
Constitution.

(2) “Allocated local proceeds of taxes,” as used in subdivision
(b) of Section 8 of Article XVI of the California Constitution.

(d) The department has sought but has not received federal
financial participation for the supplemental payments and other
costs required by this article for which federal financial
participation has been sought.

(e) A lawsuit related to this article is filed against the state and
a preliminary injunction or other order has been issued that results
in a financial disadvantage to the state. For purposes of this
subdivision, “financial disadvantage to the state” means either of
the following:

(1) A loss of federal financial participation.

(2) A cost to the General Fund that is equal to or greater than
one-quarter of 1 percent of the General Fund expenditures
authorized in the most recent annual Budget Act.

(f) The proceeds of the fee and any interest and dividends earned
on deposits are not deposited into the fund or are not used as
provided in Section 14169.53.

(g) The proceeds of the fee, the matching amount provided by
the federal government, and interest and dividends earned on
deposits in the fund are not used as provided in Section 14169.68.

begin delete SEC. 36. end delete
begin insert SEC. 40. end insert   

Section 14312 of the Welfare and Institutions Code
is amended to read:

14312.  

The director shall adopt all necessary rules and
regulations to carry out the provisions of this chapter. In adopting
such rules and regulations, the director shall be guided by the needs
of eligible persons as well as prevailing practices in the delivery
of health care on a prepaid basis. Except where otherwise required
by federal law or by this part, the rules and regulations shall be
consistent with the requirements of the Knox-Keene Health Care
Service Plan Act of 1975.

begin delete SEC. 37. end delete
begin insert SEC. 41. end insert   

Section 14451 of the Welfare and Institutions Code
is amended to read:

14451.  

Services under a prepaid health plan contract shall be
provided in accordance with the requirements of the Knox-Keene
Health Care Service Plan Act of 1975.

begin delete SEC. 38. end delete
begin insert SEC. 42. end insert   

Section 15657.8 of the Welfare and Institutions Code
is amended to read:

15657.8.  

(a) An agreement to settle a civil action for physical
abuse, as defined in Section 15610.63, neglect, as defined in
Section 15610.57, or financial abuse, as defined in Section
15610.30, of an elder or dependent adult shall not include any of
the following provisions, whether the agreement is made before
or after filing the action:

(1) A provision that prohibits any party to the dispute from
contacting or cooperating with the county adult protective services
agency, the local law enforcement agency, the long-term care
ombudsman, the California Department of Aging, the Department
of Justice, the Licensing and Certification Division of the State
Department of Public Health, the State Department of
Developmental Services, the State Department of State Hospitals,
a licensing or regulatory agency that has jurisdiction over the
license or certification of the defendant, any other governmental
entity, a protection and advocacy agency, as defined in Section
4900, or the defendant’s current employer if the defendant’s job
responsibilities include contact with elders, dependent adults, or
children, provided that the party contacting or cooperating with
one of these entities had a good faith belief that the information
he or she provided is relevant to the concerns, duties, or obligations
of that entity.

(2) A provision that prohibits any party to the dispute from filing
a complaint with, or reporting any violation of law to, the county
adult protective services agency, the local law enforcement agency,
the long-term care ombudsman, the California Department of
Aging, the Department of Justice, the Licensing and Certification
Division of the State Department of Public Health, the State
Department of Developmental Services, the State Department of
State Hospitals, a licensing or regulatory agency that has
jurisdiction over the license or certification of the defendant, any
other governmental entity, a protection and advocacy agency, as
defined in Section 4900, or the defendant’s current employer if
the defendant’s job responsibilities include contact with elders,
dependent adults, or children.

(3) A provision that requires any party to the dispute to withdraw
a complaint he or she has filed with, or a violation he or she has
reported to, the county adult protective services agency, the local
law enforcement agency, the long-term care ombudsman, the
California Department of Aging, the Department of Justice, the
Licensing and Certification Division of the State Department of
Public Health, the State Department of Developmental Services,
the State Department of State Hospitals, a licensing or regulatory
agency that has jurisdiction over the license or certification of the
defendant, any other governmental entity, a protection and
advocacy agency, as defined in Section 4900, or the defendant’s
current employer if the defendant’s job responsibilities include
contact with elders, dependent adults, or children.

(b) A provision described in subdivision (a) is void as against
public policy.

(c) This section shall apply only to an agreement entered on or
after January 1, 2013.

begin delete SEC. 39. end delete
begin insert SEC. 43. end insert   

Section 16541 of the Welfare and Institutions Code
is amended to read:

16541.  

The council shall be comprised of the following
members:

(a) The Secretary of California Health and Human Services,
who shall serve as cochair.

(b) The Chief Justice of the California Supreme Court, or his
or her designee, who shall serve as cochair.

(c) The Superintendent of Public Instruction, or his or her
designee.

(d) The Chancellor of the California Community Colleges, or
his or her designee.

(e) The executive director of the State Board of Education.

(f) The Director of Social Services.

(g) The Director of Health Services.

(h) The Director of State Hospitals.

(i) The Director of Alcohol and Drug Programs.

(j) The Director of Developmental Services.

(k) The Director of the Youth Authority.

(l) The Administrative Director of the Courts.

(m) The State Foster Care Ombudsperson.

(n) Four foster youth or former foster youth.

(o) The chairpersons of the Assembly Human Services
Committee and the Assembly Judiciary Committee, or two other
Members of the Assembly as appointed by the Speaker of the
Assembly.

(p) The chairpersons of the Senate Human Services Committee
and the Senate Judiciary Committee, or two other members
appointed by the President pro Tempore of the Senate.

(q) Leaders and representatives of county child welfare, foster
care, health, education, probation, and mental health agencies and
departments, child advocacy organizations; labor organizations,
recognized professional associations that represent child welfare
and foster care social workers, tribal representatives, and other
groups and stakeholders that provide benefits, services, and
advocacy to families and children in the child welfare and foster
care systems, as recommended by representatives of these groups
and as designated by the cochairs.

begin delete SEC. 40. end delete
begin insert SEC. 44. end insert   

Section 17608.05 of the Welfare and Institutions
Code is amended to read:

17608.05.  

(a) As a condition of deposit of funds from the Sales
Tax Account of the Local Revenue Fund into a county’s local
health and welfare trust fund mental health account, the county or
city shall deposit each month local matching funds in accordance
with a schedule developed by the State Department of Mental
Health, or its successor the State Department of State Hospitals,
based on county or city standard matching obligations for the
1990-91 fiscal year for mental health programs.

(b) A county, city, or city and county may limit its deposit of
matching funds to the amount necessary to meet minimum federal
maintenance of effort requirements, as calculated by the State
Department of State Hospitals, subject to the approval of the
Department of Finance. However, the amount of the reduction
permitted by the limitation provided for by this subdivision shall
not exceed twenty-five million dollars ($25,000,000) per fiscal
year on a statewide basis.

(c) Any county, city, or city and county that elects not to apply
maintenance of effort funds for community mental health programs
shall not use the loss of these expenditures from local mental health
programs for realignment purposes, including any calculation for
poverty-population shortfall for clause (iv) of subparagraph (B)
of paragraph (2) of subdivision (c) of Section 17606.05.

begin delete SEC. 41. end delete
begin insert SEC. 45. end insert   

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 ensure the health and safety of Californians by
updating existing law consistent with current practices at the
earliest possible time, it is necessary that this act take effect
immediately.