Bill Text: CA AB75 | 2009-2010 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Medi-Cal.

Sponsorship: Moderate Partisan Bill (Democrat 4-1)

Status: (Engrossed - Dead) 2009-08-20 - In committee: Set, final hearing. Hearing canceled at the request of author. [AB75 Detail]

Download: California-2009-AB75-Introduced.html

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BILL NUMBER: AB 75	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Huffman

                        DECEMBER 16, 2008

   An act to amend Section 14166.245 of the Welfare and Institutions
Code, relating to Medi-Cal.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 75, as introduced, Huffman. Medi-Cal.
   Existing law establishes the Medi-Cal program, administered by the
State Department of Health Care Services, under which qualified
low-income persons are provided with health care services. Under
existing law, for certain hospitals that receive Medi-Cal
reimbursement from the State Department of Health Care Services and
that are not under contract with the State Department of Health Care
Services pursuant to specified existing law, specified payments for
inpatient hospital services provided on and after July 1, 2008, are
reduced by 10%. Existing law revises the amount of these payments,
beginning on October 1, 2008, pursuant to a specified formula.
Existing law exempts open health facility planning areas with 3 or
more hospitals with licensed general acute care beds from this
revised formula.
   This bill would revise the above exemption to exclude all
hospitals owned or operated by the state.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 14166.245 of the Welfare and Institutions Code,
as amended by Section 57 of Chapter 758 of the Statutes of 2008, is
amended to read:
   14166.245.  (a) The Legislature finds and declares that the state
faces a fiscal crisis that requires unprecedented measures to be
taken to reduce General Fund expenditures to avoid reducing vital
government services necessary for the protection of the health,
safety, and welfare of the citizens of the State of California.
   (b) (1) Notwithstanding any other provision of law, except as
provided in Article 2.93 (commencing with Section 14091.3), for
hospitals that receive Medi-Cal reimbursement from the State
Department of Health Care Services and that are not under contract
with the State Department of Health Care Services pursuant to Article
2.6 (commencing with Section 14081)  of Chapter 7 of Part 3
of Division 9  , the amounts paid as interim payments for
inpatient hospital services provided on and after July 1, 2008, shall
be reduced by 10 percent.
   (2) (A) Beginning on October 1, 2008, amounts paid that are
calculated pursuant to paragraph (1) shall not exceed the applicable
regional average per diem contract rate for tertiary hospitals and
for all other hospitals established as specified in subparagraph (C),
reduced by 5 percent, multiplied by the number of Medi-Cal covered
inpatient days for which the interim payment is being made.
   (B) This paragraph shall not apply to small and rural hospitals
specified in Section 124840 of the Health and Safety Code, or to
hospitals in open health facility planning areas that were open
health facility planning areas on October 1, 2008, unless either of
the following apply:
   (i) The open health facility planning area at any time on or after
July 1, 2005, was a closed health facility planning area as
determined by the California Medical Assistance Commission.
   (ii) The open health facility planning area has three or more
hospitals  , excluding all hospitals owned or operated by the
state,  with licensed general acute care beds.
   (C) (i) For purposes of this subdivision and subdivision (c), the
average regional per diem contract rates shall be derived from
unweighted average contract per diem rates that are publicly
available on June 1 of each year, trended forward based on the trends
in the California Medical Assistance Commission's Annual Report to
the Legislature. For tertiary hospitals, and for all other hospitals,
the regional average per diem contract rates shall be based on the
geographic regions in the California Medical Assistance Commission's
Annual Report to the Legislature. The applicable average regional per
diem contract rates for tertiary hospitals and for all other
hospitals shall be published by the department on or before October
1, 2008, and these rates shall be updated annually for each state
fiscal year and shall become effective each July 1, thereafter.
Supplemental payments shall not be included in this calculation.
   (ii) For purposes of clause (i), both the federal and nonfederal
share of the designated public hospital cost-based rates shall be
included in the determination of the average contract rates by
multiplying the hospital's interim rate, established pursuant to
Section 14166.4 and that is in effect on June 1 of each year, by two.

   (iii) For the purposes of this section, a tertiary hospital is a
children's hospital specified in Section 10727, or a hospital that
has been designated as a Level I or Level II trauma center by the
Emergency Medical Services Authority established pursuant to Section
1797.1 of the Health and Safety Code.
   (D) For purposes of this section, the terms "open health facility
planning area" and "closed health facility planning area" shall have
the same meaning and be applied in the same manner as used by the
California Medical Assistance Commission in the implementation of the
hospital contracting program authorized in Article 2.6 (commencing
with Section 14081).
   (c) (1) Notwithstanding any other provision of law, for hospitals
that receive Medi-Cal reimbursement from the State Department of
Health Care Services and that are not under contract with the State
Department of Health Care Services, pursuant to Article 2.6
(commencing with Section 14081), the reimbursement amount paid by the
department for inpatient services provided to Medi-Cal recipients
for dates of service on and after July 1, 2008, shall not exceed the
amount determined pursuant to paragraph (3).
   (2) For purposes of this subdivision, the reimbursement for
inpatient services includes the amounts paid for all categories of
inpatient services allowable by Medi-Cal. The reimbursement includes
the amounts paid for routine services, together with all related
ancillary services.
   (3) When calculating a hospital's cost report settlement for a
hospital's fiscal period that includes any dates of service on and
after July 1, 2008, the settlement for dates of service on and after
July 1, 2008, shall be limited to the lesser of the following:
   (A) Ninety percent of the hospital's audited allowable cost per
day for those services multiplied by the number of Medi-Cal covered
inpatient days in the hospital's fiscal year on or after July 1,
2008.
   (B) Beginning for dates of service on and after October 1, 2008,
the applicable average regional per diem contract rate established as
specified in subparagraph (A) of paragraph (2) of subdivision (b),
reduced by 5 percent, multiplied by the number of Medi-Cal covered
inpatient days in the hospital's fiscal year, or portion thereof.
This subparagraph shall not apply to small and rural hospitals
specified in Section 124840 of the Health and Safety Code, or to
hospitals in open health facility planning areas that were open
health facility planning areas on July 1, 2008, unless either of the
following apply:
   (i) The open health facility planning area at any time on or after
July 1, 2005, was a closed health facility planning area as
determined by the California Medical Assistance Commission.
   (ii) The open health facility planning area has more than three
hospitals  , excluding all hospitals owned or operated by the
state,  with licensed general acute care beds.
   (d) Except as provided in Article 2.93 (commencing with Section
14091.3), hospitals that participate in the Selective Provider
Contracting Program pursuant to Article 2.6 (commencing with Section
14081) and designated public hospitals under Section 14166.1, except
Los Angeles County Martin Luther King, Jr./Charles R. Drew Medical
Center and Tuolumne General Hospital, shall be exempt from the
limitations required by this section.
   (e) Notwithstanding the rulemaking provisions of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, the director may implement and administer this
section by means of provider bulletins, or other similar
instructions, without taking regulatory action.
   (f) The director shall promptly seek all necessary federal
approvals in order to implement this section, including necessary
amendments to the state plan.
   (g) Notwithstanding any other provision of this section, small and
rural hospitals, as defined in Section 124840 of the Health and
Safety Code, shall be exempt from the payment reductions set forth in
this section for dates of service on and after November 1, 2008.
   (h) For hospitals that are subject to clauses (i) and (ii) of
subparagraph (B) of paragraph (2) of subdivision (b) and that choose
to contract pursuant to Article 2.6 (commencing with Section 14081),
the California Medical Assistance Commission shall negotiate rates
taking into account factors specified in Section 14083.
   (i) (1) In January 2010 and in January 2011, the department and
the California Medical Assistance Commission shall submit a written
report to the policy and fiscal committees of the Legislature on the
implementation and impact of the changes made by this section,
including, but not limited to, the impact of those changes on the
number of hospitals that are contract and noncontract, patient
access, and cost savings to the state.
   (2) On or before January 1, 2012, the department, in consultation
with the California Medical Assistance Commission, shall report on
the implementation of this section. The report shall include, but not
be limited to, information and analyses addressing patient access,
capacity and needs within the health facility planning area,
reimbursement of hospital costs, changes in the number of open and
closed health facility planning areas, the impact of this section on
the extent of hospital contracting, and fiscal impact on the state.
   (j) This section shall remain in effect only until January 1, 2013
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2013 deletes or extends that date.