Bill Text: CA SB239 | 2013-2014 | Regular Session | Chaptered
Bill Title: Medi-Cal: hospitals: quality assurance fees: distinct part skilled nursing facilities.
Sponsorship: Partisan Bill (Democrat 2)
Status: (Passed) 2013-10-08 - Chaptered by Secretary of State. Chapter 657, Statutes of 2013. [SB239 Detail]
Download: California-2013-SB239-Chaptered.html
BILL NUMBER: SB 239 CHAPTERED
BILL TEXT
CHAPTER 657
FILED WITH SECRETARY OF STATE OCTOBER 8, 2013
APPROVED BY GOVERNOR OCTOBER 8, 2013
PASSED THE SENATE SEPTEMBER 12, 2013
PASSED THE ASSEMBLY SEPTEMBER 12, 2013
AMENDED IN ASSEMBLY SEPTEMBER 11, 2013
AMENDED IN ASSEMBLY SEPTEMBER 6, 2013
AMENDED IN ASSEMBLY AUGUST 27, 2013
AMENDED IN ASSEMBLY AUGUST 14, 2013
AMENDED IN SENATE APRIL 17, 2013
INTRODUCED BY Senators Hernandez and Steinberg
FEBRUARY 12, 2013
An act to amend Sections 14164, 14165, and 14167.35 of, to add
Sections 14165.58 and 14167.37 to, to add Article 5.231 (commencing
with Section 14169.81) to, and to add and repeal Article 5.230
(commencing with Section 14169.50) of, Chapter 7 of Part 3 of
Division 9 of, the Welfare and Institutions Code, relating to
Medi-Cal, making an appropriation therefor, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 239, Hernandez. Medi-Cal: hospitals: quality assurance fees:
distinct part skilled nursing facilities.
(1) Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services, under
which qualified low-income individuals receive health care services.
The Medi-Cal program is, in part, governed and funded by federal
Medicaid Program provisions. Existing law, subject to federal
approval, imposes a quality assurance fee, as specified, on certain
general acute care hospitals from July 1, 2011, to December 31, 2013,
inclusive. Existing law, subject to federal approval, requires the
fee to be deposited into the Hospital Quality Assurance Revenue Fund,
and requires that the moneys in the fund be used, upon appropriation
by the Legislature, only for certain purposes, including, among
other things, paying for health care coverage for children and making
supplemental payments for certain services to private hospitals,
increased capitation payments to Medi-Cal managed care plans, and
increased payments to mental health plans.
This bill would, subject to federal approval, impose a hospital
quality assurance fee, as specified, on certain general acute care
hospitals to be deposited into the Hospital Quality Assurance Revenue
Fund. This bill would, subject to federal approval, provide that
moneys in the Hospital Quality Assurance Revenue Fund shall 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. The bill would also require 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. The bill would, for subsequent
program periods, authorize the payment of direct grants for
designated and nondesignated public hospitals and require 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. The bill would require the department to make
available all public documentation it uses to administer and audit
these provisions. The bill would require the department to post
specified documents on its Internet Web site relating to these
provisions.
(2) Existing law provides that any county, other political
subdivision of the state, or governmental entity in the state may
elect to transfer funds in the form of cash or loans to the
department in support of the Medi-Cal program. Existing law provides
the department discretion to accept or not accept any elective
transfer from a county, political subdivision, or other governmental
entity for purposes of obtaining federal financial participation.
This bill would authorize the Director of Health Care Services to
maximize federal financial participation to provide access to
services provided by hospitals that are not reimbursed by certified
public expenditure, as specified, by authorizing the use of
intergovernmental transfers to fund the nonfederal share of
supplemental payments as permitted under federal law.
(3) Existing law requires that the California Medical Assistance
Commission be dissolved after June 30, 2012, and requires that, upon
dissolution of the commission, all powers, duties, and
responsibilities of the commission be transferred to the Director of
Health Care Services. Existing law provides that upon a determination
by the director that a payment system based on diagnosis-related
groups, as described, has been developed and implemented, the powers,
duties, and responsibilities conferred on the commission and
transferred to the director shall no longer be exercised, except as
specified.
This bill would add to those exceptions by authorizing the
director to continue to administer and distribute payments for the
Construction and Renovation Reimbursement Program, which provides
supplemental reimbursement to hospitals that contract under the
selective provider contracting program or with a county organized
health system, as specified. The bill would provide that maintaining
or negotiating a selective provider contract or a contract with a
county organized health system shall cease to be a requirement for a
hospital's participation in the Construction and Renovation
Reimbursement Program.
(4) Existing law requires, except as otherwise provided, Medi-Cal
provider payments to be reduced by 1% or 5%, and provider payments
for specified non-Medi-Cal programs to be reduced by 1%, for dates of
service on and after March 1, 2009, and until June 1, 2011. Existing
law requires, except as otherwise provided, Medi-Cal provider
payments and payments for specified non-Medi-Cal programs to be
reduced by 10% for dates of service on and after June 1, 2011.
This bill would require that reimbursement for services provided
by skilled nursing facilities that are distinct parts of general
acute care hospitals be determined, for dates of service on or after
October 1, 2013, without application of the reductions and
limitations set forth in those provisions. The bill would also
require the department to develop, in consultation with the hospital
community, proposed modifications to the quality assurance fee
provisions to collect additional fees for increasing managed care
plan rate range increases for the purpose of increasing payments to
private hospitals and nondesignated public hospitals in counties that
do not have designated public hospitals. The bill would also require
the department to develop a process by which a private general acute
care hospital located outside the state that serves Medi-Cal
beneficiaries may opt in to pay the quality assurance fee and receive
supplemental payments, as specified.
(5) This bill would declare that it is to take effect immediately
as an urgency statute.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 14164 of the Welfare and Institutions Code is
amended to read:
14164. (a) In addition to the required intergovernmental
transfers set forth in Section 14163, any county, other political
subdivision of the state, or governmental entity in the state may
elect to transfer funds, subject to subdivision (m) of Section 14163,
to the department in support of the Medi-Cal program. Those
transfers may consist of cash or loans to the state. The department
shall have the discretion to accept or not accept any elective
transfer from a county, political subdivision, or other governmental
entity, as well as the discretion of whether to deposit the transfer
in the Medi-Cal Inpatient Payment Adjustment Fund established
pursuant to Section 14163. If the department accepts a transfer
pursuant to this section, the department shall obtain federal
matching funds to the full extent permitted by federal law.
(b) (1) The director may maximize available federal financial
participation to provide access to services provided by hospitals
that are not reimbursed by certified public expenditure pursuant to
Article 5.2 (commencing with Section 14166) by authorizing the use of
intergovernmental transfers to fund the nonfederal share of
supplemental payments as permitted under Section 433.51 of Title 42
of the Code of Federal Regulations or any other applicable federal
Medicaid laws. The transferring entity shall certify to the
department that the funds are in compliance with all federal rules
and regulations. Any payments funded by intergovernmental transfers
shall remain with the hospital and shall not be transferred back to
any county, other political subdivision of the state, or governmental
entity in the state, except for federal disallowance or withhold
recovery efforts by the department. Participation in
intergovernmental transfers under this subdivision is voluntary on
the part of the transferring entity for purposes of all applicable
federal laws.
(2) This subdivision shall be implemented only to the extent
federal financial participation is not jeopardized.
SEC. 2. Section 14165 of the Welfare and Institutions Code is
amended to read:
14165. (a) There is hereby created in the Governor's office the
California Medical Assistance Commission, for the purpose of
contracting with health care delivery systems for the provision of
health care services to recipients under the California Medical
Assistance program.
(b) Notwithstanding any other provision of law, the commission
created pursuant to subdivision (a) shall continue through June 30,
2012, after which, it shall be dissolved and the term of any
commissioner serving at that time shall end.
(1) Upon dissolution of the commission, all powers, duties, and
responsibilities of the commission shall be transferred to the
Director of Health Care Services. These powers, duties, and
responsibilities shall include, but are not limited to, those
exercised in the operation of the selective provider contracting
program pursuant to Article 2.6 (commencing with Section 14081).
(2) (A) On July 1, 2012, notwithstanding any other law, employees
of the California Medical Assistance Commission as of June 30, 2012,
excluding commissioners, shall transfer to the State Department of
Health Care Services.
(B) Employees who transfer pursuant to subparagraph (A) shall be
subject to the same conditions of employment under the department as
they were under the California Medical Assistance Commission,
including retention of their exempt status, until the
diagnosis-related groups payment system described in Section 14105.28
replaces the contract-based payment system described in this
article.
(C) (i) Notwithstanding any other law or rule, persons employed by
the department who transferred to the department pursuant to
subparagraph (A) shall be eligible to apply for civil service
examinations. Persons receiving passing scores shall have their names
placed on lists resulting from these examinations, or otherwise gain
eligibility for appointment. In evaluating minimum qualifications,
related California Medical Assistance Commission experience shall be
considered state civil service experience in a class deemed
comparable by the State Personnel Board, based on the duties and
responsibilities assigned.
(ii) On the date the diagnosis-related groups payment system
described in Section 14105.28 replaces the contract-based system
described in this article, employees who transferred to the
department pursuant to subparagraph (A) shall transfer to civil
service classifications within the department for which they are
eligible.
(3) Upon a determination by the Director of Health Care Services
that a payment system based on diagnosis-related groups as described
in Section 14105.28 that is sufficient to replace the contract-based
payment system described in this article has been developed and
implemented, the powers, duties, and responsibilities conferred on
the commission and transferred to the Director of Health Care
Services shall no longer be exercised, excluding all of the
following:
(A) Stabilization payments made or committed from Sections
14166.14 and 14166.19 for services rendered prior to the director's
determination pursuant to this paragraph.
(B) The ability to negotiate and make payments from the Private
Hospital Supplemental Fund, established pursuant to Section 14166.12,
and the Nondesignated Public Hospital Supplemental Fund, established
pursuant to Section 14166.17.
(C) The ability to continue to administer and distribute payments
for the Construction and Renovation Reimbursement Program, in
accordance with Sections 14085 to 14085.57, inclusive.
Notwithstanding any other law, maintaining or negotiating a selective
provider contract pursuant to Article 2.6 (commencing with Section
14081) or a contract with a county organized health system shall
cease to be a requirement for a hospital's participation in the
Construction and Renovation Reimbursement Program.
(4) Protections afforded to the negotiations and contracts of the
commission by the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code) shall be applicable to the negotiations and
contracts conducted or entered into pursuant to this section by the
State Department of Health Care Services.
(c) 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, or any other provision of law, the State
Department of Health Care Services may implement and administer this
section by means of provider bulletins or other similar instructions,
without taking regulatory action. The authority to implement this
section as set forth in this subdivision shall include the authority
to give notice by provider bulletin or other similar instruction of a
determination made pursuant to paragraph (3) of subdivision (b) and
to modify or supersede existing regulations in Title 22 of the
California Code of Regulations that conflict with implementation of
this section.
SEC. 3. Section 14165.58 is added to the Welfare and Institutions
Code, to read:
14165.58. (a) The department shall design and implement, in
consultation with nondesignated public hospitals, an
intergovernmental transfer program relating to Medi-Cal managed care
services provided by nondesignated public hospitals in order to
increase capitation payments for the purpose of increasing their
reimbursement.
(b) The increased capitation payments under this section shall be
actuarially equivalent to the increased fee-for-service payments made
pursuant to Section 14165.57 to the extent permissible under federal
law.
(c) This section shall be implemented on the later of January 1,
2014, or the date on which all necessary federal approvals have been
received, and only to the extent intergovernmental transfers from
nondesignated public hospitals are provided for this purpose.
(d) Participation in the intergovernmental transfers under this
section is voluntary on the part of the transferring entities for the
purposes of all applicable federal laws.
(e) This section shall be implemented only to the extent federal
financial participation is available for the reimbursement specified
in subdivision (b).
(f) This section shall be implemented only to the extent federal
financial participation is not jeopardized.
(g) To the extent that the director determines that the payments
do not comply with the federal Medicaid requirements, the director
retains the discretion not to implement an intergovernmental transfer
and may adjust the payment as necessary to comply with federal
Medicaid requirements.
(h) To the extent federal approval is secured, the increased
capitation payments under this section may cover dates of service on
or after January 1, 2014.
(i) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department shall implement this section by means of policy letters or
similar instructions, without taking further regulatory action.
Notwithstanding Section 10231.5 of the Government Code, the
department shall provide the Joint Legislative Budget Committee and
the fiscal and appropriate policy committees of the Legislature a
status update of the implementation of this section on January 1,
2014, and annually thereafter.
SEC. 4. Section 14167.35 of the Welfare and Institutions Code is
amended to read:
14167.35. (a) The Hospital Quality Assurance Revenue Fund is
hereby created in the State Treasury.
(b) (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 Hospital Quality Assurance Revenue
Fund. Notwithstanding Section 16305.7 of the Government Code, any
interest and dividends earned on deposits in the fund shall be
retained in the fund for purposes specified in subdivision (c).
(c) All funds in the Hospital Quality Assurance Revenue Fund,
together with any interest and dividends earned on money in the fund,
shall, upon appropriation by the Legislature, 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, in
the following order of priority:
(1) To pay for the department's staffing and administrative costs
directly attributable to implementing Article 5.21 (commencing with
Section 14167.1) and this article, including any administrative fees
that the director determines shall be paid to mental health plans
pursuant to subdivision (d) of Section 14167.11 and repayment of the
loan made to the department from the Private Hospital Supplemental
Fund pursuant to the act that added this section.
(2) To pay for the health care coverage for children in the amount
of eighty million dollars ($80,000,000) for each subject fiscal
quarter for which payments are made under Article 5.21 (commencing
with Section 14167.1).
(3) To make increased capitation payments to managed health care
plans pursuant to Article 5.21 (commencing with Section 14167.1).
(4) To pay funds from the Hospital Quality Assurance Revenue Fund
pursuant to Section 14167.5 that would have been used for grant
payments and that are retained by the state, and to make increased
payments to hospitals, including grants, pursuant to Article 5.21
(commencing with Section 14167.1), both of which shall be of equal
priority.
(5) To make increased payments to mental health plans pursuant to
Article 5.21 (commencing with Section 14167.1).
(d) Any amounts of the quality assurance fee collected in excess
of the funds required to implement subdivision (c), including any
funds recovered under subdivision (d) of Section 14167.14 or
subdivision (e) of Section 14167.36, 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 deposited in the Distressed Hospital Fund
to be used for the purposes described in Section 14166.23, and shall
be supplemental to and not supplant existing funds.
(e) Any methodology or other provision specified in Article 5.21
(commencing with Section 14167.1) and 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 and intent of Article 5.21 (commencing with
Section 14167.1) or this article and are not inconsistent with the
conditions of implementation set forth in Section 14167.36.
(f) The department, in consultation with the hospital community,
shall make adjustments, as necessary, to the amounts calculated
pursuant to Section 14167.32 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.
(g) 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 (e)(1) and
(e)(2) of Section 433.68 of Title 42 of the Code of Federal
Regulations.
(h) (1) For purposes of this section, a modification pursuant to
this section shall be implemented only if the modification, change,
or adjustment does not do either of the following:
(A) Reduces or increases the supplemental payments or grants made
under Article 5.21 (commencing with Section 14167.1) in the aggregate
for the 2008-09, 2009-10, and 2010-11 federal fiscal years to a
hospital by more than 2 percent of the amount that would be
determined under this article without any change or adjustment.
(B) Reduces or increases the amount of the fee payable by a
hospital in total under this article for the 2008-09, 2009-10, and
2010-11 federal fiscal years by more than 2 percent of the amount
that would be determined under this article without any change or
adjustment.
(2) The department shall provide the Joint Legislative Budget
Committee and the fiscal and appropriate policy committees of the
Legislature a status update of the implementation of Article 5.21
(commencing with Section 14167.1) and this article on January 1,
2010, and quarterly thereafter. Information on any adjustments or
modifications to the provisions of this article or Article 5.21
(commencing with Section 14167.1) that may be required for federal
approval shall be provided coincident with the consultation required
under subdivisions (f) and (g).
(i) 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 this article or Article 5.21 (commencing
with Section 14167.1) by means of provider bulletins, all plan
letters, or other similar instruction, without taking regulatory
action. The department shall also provide notification to the Joint
Legislative Budget Committee and to the appropriate policy and fiscal
committees of the Legislature within five working days when the
above-described action is taken in order to inform the Legislature
that the action is being implemented.
(j) Notwithstanding any law, the Controller may use the funds in
the Hospital Quality Assurance Revenue Fund for cashflow loans to the
General Fund as provided in Sections 16310 and 16381 of the
Government Code.
(k) Notwithstanding Sections 14167.17 and 14167.40, subdivisions
(b) to (h), inclusive, shall become inoperative on January 1, 2013,
subdivisions (a), (i), and (j) shall remain operative until January
1, 2018, and as of January 1, 2018, this section is repealed.
SEC. 5. Section 14167.37 is added to the Welfare and Institutions
Code, to read:
14167.37. (a) (1) The department shall make available all public
documentation it uses to administer and audit the program authorized
under Article 5.230 (commencing with Section 14169.50) pursuant to
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code).
(2) In addition, upon request from a hospital, the department
shall require Medi-Cal managed care plans to furnish hospitals with
the amounts the plan intends to pay to the hospital pursuant to
Article 5.230 (commencing with Section 14169.50). Nothing in this
paragraph shall require the department to reconcile payments made to
individual hospitals from Medi-Cal managed care plans.
(b) Notwithstanding subdivision (a), the department shall post all
of the following on the department's Internet Web site:
(1) Within 10 business days after receipt of approval of the
hospital quality assurance fee program under Article 5.230
(commencing with Section 14169.50) from the federal Centers for
Medicare and Medicaid Services (CMS), the hospital quality assurance
fee final model and upper payment limit calculations.
(2) Quarterly updates on payments, fee schedules, and model
updates when applicable.
(3) Within 10 business days after receipt, information on managed
care rate approvals.
(c) For purposes of this section, the following definitions shall
apply:
(1) "Fee schedules" mean the dates on which the hospital quality
assurance fee will be due from the hospitals and the dates on which
the department will submit fee-for-service payments to the hospitals.
"Fee schedules" also include the dates on which the department is
expected to submit payments to managed care plans.
(2) "Hospital quality assurance fee final model" means the
spreadsheet calculating the supplemental amounts based on the upper
payment limit calculation from claims and hospital data sources of
days and hospital services once CMS approves the program under
Article 5.230 (commencing with Section 14169.50).
(3) "Upper payment limit calculation" means the determination of
the 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, and that has
been approved by CMS.
SEC. 6. Article 5.230 (commencing with Section 14169.50) is added
to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:
Article 5.230. Medi-Cal Hospital Reimbursement Improvement Act
of 2013
14169.50. The Legislature finds and declares all of the
following:
(a) The Legislature continues to recognize the essential role that
hospitals play in serving the state's Medi-Cal beneficiaries. To
that end, it has been, and remains, the intent of the Legislature to
improve funding for hospitals and obtain all available federal funds
to make supplemental Medi-Cal payments to hospitals.
(b) It is the intent of the Legislature that funding provided to
hospitals through a hospital quality assurance fee be continued with
the goal of increasing access to care and improving hospital
reimbursement through supplemental Medi-Cal payments to hospitals.
(c) It is the intent of the Legislature to recognize the
fundamental structure of the components used to develop a successful
hospital quality assurance fee program.
(d) It is the intent of the Legislature to impose a quality
assurance fee to be paid by hospitals, which would be used to
increase federal financial participation in order to make
supplemental Medi-Cal payments to hospitals, and to help pay for
health care coverage for low-income children.
(e) The State Department of Health Care Services shall make every
effort to obtain the necessary federal approvals to implement the
quality assurance fee described in subdivision (d) in order to make
supplemental Medi-Cal payments to hospitals.
(f) It is the intent of the Legislature that the quality assurance
fee be implemented only if all of the following conditions are met:
(1) The quality assurance fee is established in consultation with
the hospital community.
(2) The quality assurance fee, including any interest earned after
collection by the department, is deposited into segregated funds
apart from the General Fund and used exclusively for supplemental
Medi-Cal payments to hospitals, direct grants to public hospitals,
health care coverage for low-income children, and for the department'
s direct costs of administering the program.
(3) No hospital shall be required to pay the quality assurance fee
to the department unless and until the state receives and maintains
federal approval of the quality assurance fee and related
supplemental payments to hospitals.
(4) The full amount of the quality assurance fee assessed and
collected remains available only for the purposes specified by the
Legislature in this article.
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) "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.
(q) "General acute care hospital" means any hospital licensed
pursuant to subdivision (a) of Section 1250 of the Health and Safety
Code.
(r) "General acute care per diem supplemental rate" means a fixed
per diem supplemental payment for general acute care days.
(s) "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.
(t) "High acuity per diem supplemental rate" means a fixed per
diem supplemental payment for high acuity days for specified
hospitals in Section 14169.55.
(u) "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.
(v) "Hospital community" includes, but is not limited to, the
statewide hospital industry organization and systems representing
general acute care hospitals.
(w) "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.
(x) "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.
(y) "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.
(z) "Managed care per diem quality assurance fee rate" means a
fixed fee on managed care days.
(aa) (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).
(ab) "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.
(ac) "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.
(ad) "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.
(ae) "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.
(af) "Medi-Cal per diem quality assurance fee rate" means a fixed
fee on Medi-Cal days.
(ag) "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.
(ah) "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.
(ai) "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.
(aj) "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.
(ak) "Outpatient supplemental rate" means a fixed proportional
supplemental payment for Medi-Cal outpatient services.
(al) "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.
(am) "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.
(an) "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.
(ao) "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.
(ap) "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.
(aq) "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.
(ar) (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.
(as) "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.
(at) "Rebase year" means the first state fiscal year of a program
period and shall immediately follow a rebase calculation year.
(au) "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.
(av) "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.
(aw) "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.
(ax) "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.
(ay) "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.
(az) "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.
(ba) "Transplant per diem supplemental rate" means a fixed per
diem supplemental payment for transplant days.
(bb) "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.
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 Hospital Quality Assurance Revenue
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 Hospital Quality Assurance Revenue 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 Hospital Quality
Assurance Revenue 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.
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 Hospital Quality Assurance Revenue
Fund, created pursuant to Section 14167.35. 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 Hospital Quality Assurance Revenue 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 Hospital Quality Assurance Revenue 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 Hospital
Quality Assurance Revenue 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) "Fund" means the Hospital Quality Assurance Revenue Fund
established pursuant to Section 14167.35.
(E) "Net benefit" means the aggregate payments for a net benefit
period minus the aggregate fees for the net benefit period.
(F) "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.
(G) "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.
14169.54. (a) Private hospitals shall be paid supplemental
amounts for each subject fiscal quarter in a program period for the
provision of hospital outpatient services 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 supplemental amounts
shall result in payments equal to the statewide aggregate upper
payment limit for private hospitals for each subject fiscal year.
(b) Except as set forth in subdivisions (d) and (e), each private
hospital shall be paid an amount for each subject fiscal year equal
to the outpatient supplemental rate multiplied by the hospital's
outpatient base amount, which payments shall be made on a quarterly
basis. The outpatient supplemental rate 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 outpatient supplemental rate 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. For purposes of
this subdivision, the applicable federal upper payment limit shall be
the federal upper payment limit for hospital outpatient services
furnished by private hospitals for each subject fiscal 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 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) Payments shall not be made under this section for the periods
when a hospital is a new hospital during a program period.
(e) Payments shall be made to a converted hospital that converts
during a subject fiscal quarter by multiplying the hospital's
outpatient 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.
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
outpatient 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.
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 Hospital Quality Assurance Revenue Fund, established pursuant
to Section 14167.35, 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.
14169.57. (a) Each managed health care plan receiving increased
capitation payments under Section 14169.56 shall expend the
capitation rate increases in a manner consistent with actuarial
certification, enrollment, and utilization on hospital services. Each
managed health care plan shall expend increased capitation payments
on hospital services within 30 days of receiving the increased
capitation payments to the extent they are made for a subject month
that is prior to the date on which the payments are received by the
managed health care plan.
(b) The sum of all expenditures made by a managed health care plan
for hospital services pursuant to this section shall equal, or
approximately equal, all increased capitation payments received by
the managed health care plan, consistent with actuarial
certification, enrollment, and utilization, from the department
pursuant to Section 14169.56.
(c) Any delegation or attempted delegation by a managed health
care plan of its obligation to expend the capitation rate increases
under this section shall not relieve the plan from its obligation to
expend those capitation rate increases. Managed health care plans
shall submit the documentation that the department may require to
demonstrate compliance with this subdivision. The documentation shall
demonstrate actual expenditure of the capitation rate increases for
hospital services, and not assignment to subcontractors of the
managed health care plan's obligation of the duty to expend the
capitation rate increases.
(d) The supplemental hospital payments made by managed health care
plans pursuant to this section shall reflect the overall purpose of
this article.
(e) This article is not intended to create a private right of
action by a hospital against a managed care plan provided that the
managed health care plan expends all increased capitation payments
for hospital services.
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 the Hospital Quality Assurance Revenue 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.
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) During each rebase calculation year, the department shall
determine all of the following rates for the subsequent program
period, which rates shall be specified in provisional language in the
annual Budget Act:
(1) The acute psychiatric per diem supplemental rate for each
subject fiscal year during the program period.
(2) The fee-for-service per diem quality assurance fee rate for
each subject fiscal year during the program period.
(3) The general acute care per diem supplemental rate for each
subject fiscal year during the program period.
(4) The high acuity per diem supplemental rate for each subject
fiscal year during the program period.
(5) The high acuity trauma per diem supplemental rate for each
subject fiscal year during the program period.
(6) The managed care per diem quality assurance fee rate for each
subject fiscal year during the program period.
(7) The Medi-Cal per diem quality assurance fee rate for each
subject fiscal year during the program period.
(8) The outpatient supplemental rate for each subject fiscal year
during the program period.
(9) The prepaid health plan hospital managed care per diem quality
assurance fee rate for each subject fiscal year during the program
period.
(10) The prepaid health plan hospital Medi-Cal managed care per
diem quality assurance fee rate for each subject fiscal year during
the program period.
(11) The subacute supplemental rate for each subject fiscal year
during the program period.
(12) The transplant per diem supplemental rate for each subject
fiscal year during the program period.
(d) The department shall determine the rates set forth in
paragraphs (1) to (12), inclusive, of 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) Notwithstanding any other provision in this article, the
following shall apply to the first program period under this article:
(1) The first program period under this article shall be the
period from January 1, 2014, to December 31, 2016, inclusive.
(2) 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.
(3) 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.
(4) 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.
(5) 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.
(6) 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.
(7) 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.
(8) 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.
(9) 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.
(10) 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.
(11) 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.
(12) 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.
(13) 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.
(14) 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.
(15) 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.
(16) 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.
(17) 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.
(18) 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.
(19) 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.
(20) 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.
(21) 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.
(22) 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 (ah) of Section 14169.51 for the purposes of this
article.
(B) 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.
(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 (ah) 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.
(i) 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.
14169.60. (a) The amount of any payments made under this article
to private hospitals, including the amount of payments made under
Sections 14169.54 and 14169.55 and additional payments to private
hospitals by managed health care plans pursuant to Section 14169.57,
shall not be included in the calculation of the low-income percent or
the OBRA 1993 payment limitation, as defined in paragraph (24) of
subdivision (a) of Section 14105.98, for purposes of determining
payments to private hospitals.
(b) The supplemental payments and other payments under this
article shall be regarded as quality assurance payments, the
implementation or suspension of which does not affect a determination
of the adequacy of any rates under federal law.
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 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 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
(ah) 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.
14169.62. Notwithstanding any provision in this article, the
director may correct any identified material and egregious errors in
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. An error is material and egregious if the error is
clear to the director based on information the director finds to be
reliable and results in an increase or decrease to a hospital's
supplemental payment amounts under this article, or in a hospital's
quality assurance fee payments, of at least one million dollars
($1,000,000) for any subject fiscal year. The director's
determination whether to exercise his or her discretion under this
section and any determination made by the director under this section
shall not be subject to judicial review, except that a hospital may
bring a writ of mandate under Section 1085 of the Code of Civil
Procedure to rectify an abuse of discretion by the department in
correcting that hospital's data when that correction results in
greater fees for that hospital pursuant to Sections 14169.52 and
14169.53 or lower supplemental payments for that hospital pursuant to
Section 14169.54 and 14169.55.
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 Hospital Quality Assurance
Revenue 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.
14169.64. (a) Notwithstanding any other provision in this
article, the director may modify any timeline or timelines related to
the assessment of the quality assurance fee or Medi-Cal payments
under this article, including capitation payments, if the director,
upon consultation with the hospital community, determines that it is
impossible from an operational perspective to implement a timeline or
timelines without the modification.
(b) The department shall notify the Joint Budget Legislative
Committee and the fiscal and appropriate policy committees of the
Legislature five working days prior to implementing a modified
timeline or timelines under subdivision (a).
(c) The department shall consult with representatives of the
hospital community in developing a modified timeline or timelines
pursuant to this section.
(d) The discretion to modify timelines under this section shall
include, but not be limited to, discretion to accelerate payments to
plans or hospitals.
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 Hospital Quality Assurance Revenue 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.
14169.66. The department shall make disbursements from the
Hospital Quality Assurance Revenue 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 Hospital Quality Assurance Revenue 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.
14169.67. Notwithstanding any other provision of this article,
supplemental payments or other payments under this article shall only
be required and payable in any quarter for which a fee payment
obligation exists.
14169.68. (a) In order to ensure that the proceeds of the quality
assurance fee, the matching amount provided by the federal
government, and any interest earned on those proceeds are used to
supplement existing funding for hospital services provided to
Medi-Cal patients and not supplant such funding, the aggregate
fee-for-service payments under the Medi-Cal program to hospitals for
hospital services furnished on and after January 1, 2014, for each
fiscal year or portion thereof that is in a program period shall not
be less than the aggregate amounts that would have been paid for
those services under the rates and payment methodologies in effect on
December 31, 2013. This provision shall be applied separately for
each category of hospital services.
(b) For purposes of this section, all of the following definitions
shall apply:
(1) "Aggregate amounts" means payments that would have been made
on a fee-for-service basis to a hospital under Medi-Cal where the
nonfederal share of the payments would have been appropriated from
state general funds with the exception of disproportionate share
replacement payments made under Section 14166.11. Aggregate amounts
do not include payments made pursuant to Article 5.228 (commencing
with Section 14169.1).
(2) "Aggregate fee-for-service payments" means all payments made
on a fee-for-service basis to a hospital under Medi-Cal where the
nonfederal share of the payments were appropriated from state general
funds with the exception of disproportionate share replacement
payments made under Section 14166.11. Aggregate fee-for-service
payments do not include payments made under this article.
(3) "Hospital services" means all services covered under Medi-Cal
furnished by a hospital, including, but not limited to, hospital
inpatient services, hospital outpatient services, skilled nursing
facility services furnished by a hospital, and subacute services
furnished by a hospital.
(c) Disproportionate share replacement payments to private
hospitals shall be not less than the amount determined pursuant to
Section 14166.11. For purposes of this subdivision, references to
Section 14166.11 are to the version of Section 14166.11 in effect on
the effective date of this article.
(d) This section shall be implemented only to the extent it does
not violate federal law and only to the extent available federal
financial participation is not jeopardized.
(e) This section shall not require a rate or level of funding to
be maintained where federal financial participation for the rate or
level of funding has been reduced or eliminated by federal law.
14169.69. (a) The director shall do all of the following:
(1) Promptly submit any state plan amendment or waiver request
that may be necessary to implement this article.
(2) Promptly seek federal approvals or waivers as may be necessary
to implement this article and to obtain federal financial
participation to the maximum extent possible for the payments under
this article.
(3) Amend the contracts between the managed health care plans and
the department as necessary to incorporate the provisions of Sections
14169.56 and 14169.57 and promptly seek all necessary federal
approvals of those amendments. The department shall pursue amendments
to the contracts as soon as possible after the effective date of
this article, and shall not wait for federal approval of this article
prior to pursuing amendments to the contracts. The amendments to the
contracts shall, among other provisions, set forth an agreement to
increase capitation payments to managed health care plans under
Section 14169.56 and increase payments to hospitals under Section
14169.57 in a manner that relates back to the beginning of a program
period, or as soon thereafter as possible, conditioned on obtaining
all federal approvals necessary for federal financial participation
for the increased capitation payments to the managed health care
plans.
(b) In implementing this article, the department may utilize the
services of the Medi-Cal fiscal intermediary through a change order
to the fiscal intermediary contract to administer this program,
consistent with the requirements of Sections 14104.6, 14104.7,
14104.8, and 14104.9. Contracts entered into for purposes of
implementing this article shall not be subject to Part 2 (commencing
with Section 10100) of Division 2 of the Public Contract Code.
(c) In the event any hospital, or any party on behalf of a
hospital, initiates a case or proceeding in any state or federal
court in which the hospital seeks any relief of any sort whatsoever,
including, but not limited to, monetary relief, injunctive relief,
declaratory relief, or a writ, based in whole or in part on a
contention that any or all of this article is unlawful and may not be
lawfully implemented, both of the following shall apply:
(1) Payments shall not be made to the hospital pursuant to this
article until the case or proceeding is finally resolved, including
the final disposition of all appeals.
(2) Any amount computed to be payable to the hospital pursuant to
this article for a subject fiscal year shall be withheld by the
department and shall be paid to the hospital only after the case or
proceeding is finally resolved, including the final disposition of
all appeals.
(d) Subject to Section 14169.63, no payment shall be made under
this article until all necessary federal approvals for the payment
and for the fee provisions in this article have been obtained and the
fee has been imposed and collected. Notwithstanding any other law,
payments under this article shall be made only to the extent that the
fee established in this article is collected and available to cover
the nonfederal share of the payments.
(e) All payments made by the department to hospitals and managed
health care plans under this article shall be made only from the
following:
(1) The quality assurance fee set forth in this article, along
with any interest or other investment income thereon.
(2) Federal reimbursement and any other related federal funds.
(f) In order to ensure access to care to hospital services, the
director shall seek federal approval for supplemental payments for
hospital services provided to all Medi-Cal populations, including the
optional and expansion populations.
14169.70. 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 this article by means of provider
bulletins, all plan letters, or other similar instruction, without
taking regulatory action. The department shall also provide
notification to the Joint Legislative Budget Committee and to the
fiscal and appropriate policy committees of the Legislature within
five working days when the above-described action is taken in order
to inform the Legislature that the action is being implemented.
14169.71. Notwithstanding any other provision of this article,
the director may proportionately reduce the amount of any
supplemental payments or increased capitation payments under this
article to the extent that the payment would result in the reduction
of other amounts payable to a hospital or managed health care plan
due to the application of federal law.
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 Hospital Quality
Assurance Revenue 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 Hospital Quality Assurance
Revenue 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 Hospital Quality Assurance Revenue Fund are not used as provided
in Section 14169.68.
14169.73. In the event this article becomes inoperative pursuant
to Section 14169.72, all of the following shall apply:
(a) No hospital shall be required to pay the fee except for any
fee owed prior to the article becoming inoperative.
(b) The director shall execute a declaration stating that he or
she has determined that the article is inoperative and shall state
the basis for this determination. The director shall retain the
declaration and provide a copy, within five working days of the
execution of the declaration, to the fiscal and appropriate policy
committees of the Legislature. In addition, the director shall post
the declaration on the department's Internet Web site and the
director shall send the declaration to the Secretary of State, the
Secretary of the Senate, the Chief Clerk of the Assembly, and the
Legislative Counsel.
(c) Upon execution of the declaration described in subdivision
(b), the director shall implement a plan, in consultation with the
hospital community and the Legislature, to wind down the program
consistent with the purposes of the article, including the recoupment
of payments made under this article if ordered by a court.
14169.74. Beginning with the proposed budget for the 2014-15
fiscal year, and each fiscal year thereafter, the Department of
Finance shall report in the Governor's proposed budget and the May
Revision the difference in General Fund benefit for the upcoming
fiscal year resulting from this article and what was anticipated at
the time the Budget Act of 2013 was enacted. It is the intent of the
Legislature that additional General Fund benefit be appropriated to
supplement, and not supplant, funding for health and human service
programs, which may include the cost of medical interpreters.
14169.75. Notwithstanding Section 14169.72, this article shall
become inoperative on January 1, 2017. No hospital shall be required
to pay the fee after that date unless the fee was owed during the
period in which the article was operative, and no payments authorized
under Section 14169.53 shall be made unless the payments were owed
during the period in which the article was operative.
14169.76. This article is repealed on January 1 of the year
following the date on which the article becomes inoperative.
SEC. 7. Article 5.231 (commencing with Section 14169.81) is added
to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:
Article 5.231. Medi-Cal Hospital Reimbursement Improvement and
Restoration Act of 2013
14169.81. (a) Notwithstanding Sections 14105.191 and 14105.192,
reimbursement for services provided by skilled nursing facilities
that are distinct parts of general acute care hospitals shall be
determined, for dates of service on or after October 1, 2013, without
application of the reductions and limitations set forth in Sections
14105.191 and 14105.192.
(b) The director shall promptly seek all necessary federal
approvals to implement this section.
(c) 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 this section by means of provider bulletins
or notices, policy letters, or other similar instructions, without
taking regulatory action.
14169.82. (a) In consultation with the hospital community, as
defined in Section 14169.51, the department shall develop proposed
modifications to the quality assurance fee program under Article
5.230 (commencing with Section 14169.50) to collect additional fees
solely designated for use under this section. In addition, the
department shall consult with the hospital community to enable
intergovernmental transfers from nondesignated public hospitals
solely designated for use under this section. The department shall
notify the Joint Legislative Budget Committee and fiscal and
appropriate policy committees 30 working days prior to implementing a
modification pursuant to this section.
(b) To the extent federal financial participation is not
jeopardized and consistent with federal law, and subject to the
conditions set forth in subdivision (c), the department shall pay
Medi-Cal managed care plans rate range increases, as defined by
paragraph (4) of subdivision (b) of Section 14301.4, for the purpose
of increasing payments to private hospitals and nondesignated public
hospitals in counties that do not have designated public hospitals.
Nondesignated public hospitals shall be given priority relative to
accessing rate range funds in counties where a nondesignated public
hospital is the only public hospital.
(c) Payments to Medi-Cal managed care plans pursuant to
subdivision (b) are conditioned on both of the following:
(A) The Medi-Cal managed care plan shall pay all of the rate range
increases provided under this section as additional payments to
private hospitals and nondesignated public hospitals for providing
and making available services to Medi-Cal enrollees of the plan.
(B) The amount of the increases to Medi-Cal managed care plans
shall be limited to the total amount of payments possible, including
federal financial participation, based on the amount of fees actually
collected and intergovernmental transfers actually provided pursuant
to subdivision (a) as the nonfederal share for these payments.
14169.83. To the extent permitted by federal law and other
federal requirements, the director shall develop and describe in
provider bulletins and on the department's Internet Web site a
process by which a private general acute care hospital located
outside the state that serves Medi-Cal beneficiaries may opt in to
pay the quality assurance
fee on all applicable categories of patient days and receive
supplemental payments for the Medi-Cal program patient days pursuant
to Article 5.230 (commencing with Section 14169.50), in the same
manner that the hospital could participate if it were located in the
state. Notwithstanding Section 14169.51, the department shall rely on
reliable data to make reasonable estimates or projections made with
respect to the hospital as to 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, used to
calculate the fees due and the supplemental payments. The director
may modify the procedure set forth in this section to the minimum
extent necessary to comply with applicable law, in consultation with
the hospital community as defined in Section 14169.51.
SEC. 8. 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 make the necessary changes to increase Medi-Cal
payments to hospitals and improve access at the earliest time, so as
to allow this act to be operative as soon as approval from the
federal Centers for Medicare and Medicaid Services is obtained by the
State Department of Health Care Services, it is necessary that this
act takes effect immediately.
