Bill Text: CA SB815 | 2015-2016 | Regular Session | Chaptered


Bill Title: Medi-Cal: demonstration project.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2016-07-25 - Chaptered by Secretary of State. Chapter 111, Statutes of 2016. [SB815 Detail]

Download: California-2015-SB815-Chaptered.html
BILL NUMBER: SB 815	CHAPTERED
	BILL TEXT

	CHAPTER  111
	FILED WITH SECRETARY OF STATE  JULY 25, 2016
	APPROVED BY GOVERNOR  JULY 25, 2016
	PASSED THE SENATE  JUNE 27, 2016
	PASSED THE ASSEMBLY  JUNE 23, 2016
	AMENDED IN ASSEMBLY  JUNE 9, 2016
	AMENDED IN ASSEMBLY  JUNE 2, 2016
	AMENDED IN SENATE  MAY 3, 2016
	AMENDED IN SENATE  APRIL 11, 2016

INTRODUCED BY   Senators Hernandez and De León

                        JANUARY 4, 2016

   An act to add Article 5.5 (commencing with Section 14184) to
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 815, Hernandez. Medi-Cal: demonstration project.
   Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services and
under which qualified low-income persons receive health care benefits
and services. The Medi-Cal program is, in part, governed and funded
by federal Medicaid program provisions. Existing law provides for a
demonstration project, known as California's "Bridge to Reform"
Medicaid demonstration project, under the Medi-Cal program until
October 31, 2015, to implement specified objectives, including better
care coordination for seniors and persons with disabilities and
maximization of opportunities to reduce the number of uninsured
individuals.
   Existing law establishes the Medi-Cal Hospital/Uninsured Care
Demonstration Project Act, which revises hospital supplemental
payment methodologies under the Medi-Cal program in order to maximize
the use of federal funds consistent with federal Medicaid law and to
stabilize the distribution of funding for hospitals that provide
care to Medi-Cal beneficiaries and uninsured patients. This act
provides for funding, in supplementation of Medi-Cal reimbursement,
to various hospitals, including designated public hospitals,
nondesignated public hospitals, and private hospitals, as defined, in
accordance with certain provisions relating to disproportionate
share hospitals.
   Existing law establishes both of the following continuously
appropriated funds to be expended by the department:
   (1) The Demonstration Disproportionate Share Hospital Fund, which
consists of federal funds claimed and received by the department as
federal financial participation with respect to certified public
expenditures.
   (2) The Public Hospital Investment, Improvement, and Incentive
Fund, which consists of moneys that a county, other political
subdivision of the state, or other governmental entity in the state
elects to transfer to the department for use as the nonfederal share
of investment, improvement, and incentive payments to participating
designated public hospitals, nondesignated public hospitals, and the
governmental entities with which they are affiliated, that provide
intergovernmental transfers for deposit into the fund.
   Existing law requires the department to seek a subsequent
demonstration project to implement specified objectives, including
maximizing federal Medicaid funding for county public hospitals
health systems and components that maintain a comparable level of
support for delivery system reform in the county public hospital
health systems as was provided under California's "Bridge to Reform"
Medicaid demonstration project.
   This bill would establish the Medi-Cal 2020 Demonstration Project
Act, under which the department is required to implement specified
components of the subsequent demonstration project, referred to as
California's Medi-Cal 2020 demonstration project, consistent with the
Special Terms and Conditions approved by the federal Centers for
Medicare and Medicaid Services.
   The bill would distinguish which payment methodologies and
requirements under the Medi-Cal Hospital/Uninsured Care Demonstration
Project Act apply to the Medi-Cal 2020 Demonstration Project Act.
The bill would, in this regard, retain the continuously appropriated
Demonstration Disproportionate Share Hospital Fund, which will
continue to consist of all federal funds received by the department
as federal financial participation with respect to certified public
expenditures, and would require moneys in this fund to be
continuously appropriated, thereby making an appropriation, to the
department for disbursement to eligible designated public hospitals.
The bill would provide for a reconciliation process for
disproportionate share hospital payment allocations and safety net
care pool payment allocations that were paid to certain designated
public hospitals, as specified.
   The bill would require the department to implement the Global
Payment Program (GPP), under which GPP systems, as defined, would be
eligible to receive global payments that are calculated using a
value-based point methodology, to be developed by the department,
based on the health care they provide to the uninsured. The bill
would provide that these global payments payable to GPP systems are
in lieu of the traditional disproportionate share hospital payments
and the safety net care pool payments previously made available under
the Medi-Cal Hospital/Uninsured Care Demonstration Project Act. The
bill would establish the Global Payment Program Special Fund in the
State Treasury, which would consist of moneys that a designated
public hospital or affiliated governmental agency or entity elects to
transfer to the department for deposit into the fund as a condition
of participation in the program. The bill would provide that these
funds shall be continuously appropriated, thereby making an
appropriation, to the department to be used as the nonfederal share
of global payment program payments authorized under California's
Medi-Cal 2020 demonstration project.
   The bill would require the department to establish and operate the
Public Hospital Redesign and Incentives in Medi-Cal (PRIME) program,
under which participating PRIME entities, as defined, would be
eligible to earn incentive payments by undertaking specified projects
set forth in the Special Terms and Conditions, for which there are
required project metrics and targets. The bill would require the
department to provide participating PRIME entities the opportunity to
earn the maximum amount of funds authorized for the PRIME program
under the demonstration project. The bill would retain the
continuously appropriated Public Hospital Investment, Improvement,
and Incentive Fund for purposes of making PRIME payments to
participating PRIME entities. The Public Hospital Investment,
Improvement, and Incentive Fund would consist of moneys that a
designated public hospital or affiliated governmental agency or
entity, or a district and municipal public hospital-affiliated
governmental agency or entity, elects to transfer to the department
for deposit into the fund. The bill would provide that these funds
are continuously appropriated, thereby making an appropriation, to
the department to be used as the nonfederal share of PRIME program
payments authorized under California's Medi-Cal 2020 demonstration
project.
   The bill would require the department to amend its contract with
its external quality review organization to complete an access
assessment to, among other things, evaluate primary, core specialty,
and facility access to care for managed care beneficiaries, as
specified. The bill would require the department to establish an
advisory committee to provide input into the structure of the access
assessment, which would be comprised of specified stakeholders,
including representatives from consumer advocacy organizations.
   The bill would provide that these provisions shall be implemented
only to the extent that any necessary federal approvals are obtained
and federal financial participation is available and is not otherwise
jeopardized. The bill would require the department to seek any
federal approvals it deems necessary to implement these provisions
during the course of the demonstration term.
   The bill would authorize the department to implement the Medi-Cal
2020 Demonstration Project Act by means of all-county letters,
provider bulletins, or other similar instructions without taking
regulatory action.
   This bill would become operative only if AB 1568 of the 2015-16
Regular Session is enacted and takes effect on or before January 1,
2017.
   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.  Article 5.5 (commencing with Section 14184) is added to
Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:

      Article 5.5.  Medi-Cal 2020 Demonstration Project Act


   14184.  (a) This article shall be known, and may be cited, as the
Medi-Cal 2020 Demonstration Project Act.
   (b) The Legislature finds and declares all of the following:
   (1) The implementation of the federal Patient Protection and
Affordable Care Act (Public Law 111-148) and California's "Bridge to
Reform" Medicaid demonstration project have led to the expansion of
Medi-Cal coverage to more than 13 million beneficiaries, driving
health care delivery system reforms that support expanded access to
care, as well as higher quality, efficiency, and beneficiary
satisfaction.
   (2) California's "Medi-Cal 2020" Medicaid demonstration project,
No. 11-W-00193/9, expands on these achievements by continuing to
focus on expanded health care system capacity, better coordinated
care, and aligned incentives within the Medi-Cal program in order to
improve health outcomes for Medi-Cal beneficiaries, while
simultaneously containing health care costs.
   (3) Public safety net providers, including designated public
hospitals, and nondesignated public hospitals, which are also known
as district and municipal public hospitals, play an essential role in
the Medi-Cal program, providing high-quality care to a
disproportionate number of low-income Medi-Cal and uninsured
populations in the state. Because Medi-Cal covers approximately
one-third of the state's population, the strength of these essential
health care systems and hospitals is of critical importance to the
health and welfare of the people of California.
   (4) As a component of the "Medi-Cal 2020" demonstration project,
the Global Payment Program provides an opportunity to test an
alternative payment model for the remaining uninsured that rewards
value and supports providing care at the appropriate place and time,
aligning incentives to enhance primary and preventive services for
California's remaining uninsured seeking care in participating public
health care systems.
   (5) As a component of the "Medi-Cal 2020" demonstration project,
the Public Hospital Redesign and Incentives in Medi-Cal (PRIME)
program seeks to improve health outcomes for patients served by
participating entities by building on the delivery system
transformation work from the "Bridge to Reform" demonstration
project. Using evidence-based quality improvement methods, the PRIME
program is intended to be ambitious in scope in order to accelerate
transformation in care delivery and maximize value for patients,
providers, and payers. The PRIME program also seeks to strengthen the
ability of designated public hospitals to successfully perform under
risk-based alternative payment models (APMs) in the long term.
   (6) As a component of the "Medi-Cal 2020" demonstration project,
the Whole Person Care pilot program creates an opportunity for
counties, Medi-Cal managed care plans, and community providers to
establish a new model for integrated care delivery that incorporates
health care needs, behavioral health, and social support for the
state's most vulnerable, high-user populations. The Whole Person Care
pilot program encourages coordination among local partners to
address the root causes of poor health outcomes, including immediate
health needs and other factors, such as housing and recidivism, that
impact a beneficiary's health status.
   (7) As a component of the "Medi-Cal 2020" demonstration project,
the Dental Transformation Initiative creates innovative opportunities
for the Medi-Cal Dental Program to improve access to dental care,
continuity of care, and increase the utilization of preventive
services aimed at reducing preventable dental conditions for Medi-Cal
beneficiaries identified within the project.
   (c) The implementation of the "Medi-Cal 2020" demonstration
project, as set forth in this article, will support all of the
following goals:
   (1) Improving access to health care and health care quality for
California's Medi-Cal and uninsured populations.
   (2) Promoting value and improving health outcomes for low-income
populations.
   (3) Supporting whole person care by better integrating physical
health, behavioral health, and social support services for high-risk,
high-utilizing Medi-Cal beneficiaries.
   (4) Improving the capacity of public safety net providers that
provide high-quality care to a disproportionate number of low-income
patients with complex health needs in the state.
   (5) Transitioning from a cost-based reimbursement system toward a
reimbursement structure that incentivizes quality and value by
financially rewarding alternative models of care that support
providers' ability to deliver care in the most appropriate and
cost-effective manner to patients.
   14184.10.  For purposes of this article, the following definitions
shall apply:
   (a) "Demonstration project" means the California Medi-Cal 2020
Demonstration, Number 11-W-00193/9, as approved by the federal
Centers for Medicare and Medicaid Services, effective for the period
from December 30, 2015, to December 31, 2020, inclusive, and any
applicable extension period.
   (b) "Demonstration term" means the entire period during which the
demonstration project is in effect, as approved by the federal
Centers for Medicare and Medicaid Services, including any applicable
extension period.
   (c) "Demonstration year" means the demonstration year as
identified in the Special Terms and Conditions that corresponds to a
specific period of time as set forth in paragraphs (1) to (6),
inclusive. Individual programs under the demonstration project may be
operated on program years that differ from the demonstration years
identified in paragraphs (1) to (6), inclusive.
   (1) Demonstration year 11 corresponds to the period of January 1,
2016, to June 30, 2016, inclusive.
   (2) Demonstration year 12 corresponds to the period of July 1,
2016, to June 30, 2017, inclusive.
   (3) Demonstration year 13 corresponds to the period of July 1,
2017, to June 30, 2018, inclusive.
   (4) Demonstration year 14 corresponds to the period of July 1,
2018, to June 30, 2019, inclusive.
   (5) Demonstration year 15 corresponds to the period of July 1,
2019, to June 30, 2020, inclusive.
   (6) Demonstration year 16 corresponds to the period of July 1,
2020, to December 31, 2020, inclusive.
   (d) "Dental Transformation Initiative" or "DTI" means the waiver
program intended to improve oral health services for children, as
authorized under the Special Terms and Conditions and described in
Section 14184.70.
   (e) "Designated state health program" shall have the same meaning
as set forth in the Special Terms and Conditions.
   (f) (1) "Designated public hospital" means any one of the
following hospitals, and any successor or differently named hospital,
which is operated by a county, a city and county, the University of
California, or special hospital authority described in Chapter 5
(commencing with Section 101850) or Chapter 5.5 (commencing with
Section 101852) of Part 4 of Division 101 of the Health and Safety
Code, or any additional public hospital, to the extent identified as
a "designated public hospital" in the Special Terms and Conditions.
Unless otherwise provided for in law, in the Medi-Cal State Plan, or
in the Special Terms and Conditions, all references in law to a
designated public hospital as defined in subdivision (d) of Section
14166.1 shall be deemed to refer to a hospital described in this
section effective as of January 1, 2016, except as provided in
paragraph (2):
   (A) UC Davis Medical Center.
   (B) UC Irvine Medical Center.
   (C) UC San Diego Medical Center.
   (D) UC San Francisco Medical Center.
   (E) UCLA Medical Center.
   (F) Santa Monica/UCLA Medical Center, also known as the Santa
Monica-UCLA Medical Center and Orthopaedic Hospital.
   (G) LA County Health System Hospitals:
   (i) LA County Harbor/UCLA Medical Center.
   (ii) LA County Olive View UCLA Medical Center.
   (iii) LA County Rancho Los Amigos National Rehabilitation Center.
   (iv) LA County University of Southern California Medical Center.
   (H) Alameda Health System Hospitals, including the following:
   (i) Highland Hospital, including the Fairmont and John George
Psychiatric facilities.
   (ii) Alameda Hospital.
   (iii) San Leandro Hospital.
   (I) Arrowhead Regional Medical Center.
   (J) Contra Costa Regional Medical Center.
   (K) Kern Medical Center.
   (L) Natividad Medical Center.
   (M) Riverside University Health System-Medical Center.
   (N) San Francisco General Hospital.
   (O) San Joaquin General Hospital.
   (P) San Mateo Medical Center.
   (Q) Santa Clara Valley Medical Center.
   (R) Ventura County Medical Center.
   (2) For purposes of the following reimbursement methodologies, the
hospitals identified in clauses (ii) and (iii) of subparagraph (H)
of paragraph (1) shall be deemed to be a designated public hospital
as of the following effective dates:
   (A) For purposes of the fee-for-service payment methodologies
established and implemented under Section 14166.4, the effective date
shall be the date described in paragraph (3) of subdivision (a) of
Section 14184.30.
   (B) For purposes of Article 5.230 (commencing with Section
14169.50), the effective date shall be January 1, 2017.
   (g) "Disproportionate share hospital provisions of the Medi-Cal
State Plan" means those applicable provisions contained in Attachment
4.19-A of the California Medicaid state plan, approved by the
federal Centers for Medicare and Medicaid Services, that implement
the payment adjustment program for disproportionate share hospitals.
   (h) "Federal disproportionate share hospital allotment" means the
amount specified for California under Section 1396r-4(f) of Title 42
of the United States Code for a federal fiscal year.
   (i) "Federal medical assistance percentage" means the federal
medical assistance percentage applicable for federal financial
participation purposes for medical services under the Medi-Cal State
Plan pursuant to Section 1396b(a)(1) of Title 42 of the United States
Code.
   (j) "Global Payment Program" or "GPP" means the payment program
authorized under the demonstration project and described in Section
14184.40 that assists participating public health care systems that
provide health care for the uninsured and that promotes the delivery
of more cost-effective, higher-value health care services and
activities.
   (k) "Nondesignated public hospital" means a public hospital as
that term is defined in paragraph (25) of subdivision (a) of Section
14105.98, excluding designated public hospitals.
   (l) "Nonfederal share percentage" means the difference between 100
percent and the federal medical assistance percentage.
   (m) "PRIME" means the Public Hospital Redesign and Incentives in
Medi-Cal program authorized under the demonstration project and
described in Section 14184.50.
   (n) "Total computable disproportionate share hospital allotment"
means the federal disproportionate share hospital allotment for a
federal fiscal year, divided by the applicable federal medical
assistance percentage with respect to that same federal fiscal year.
   (o) "Special Terms and Conditions" means those terms and
conditions issued by the federal Centers for Medicare and Medicaid
Services, including all attachments to those terms and conditions and
any subsequent amendments approved by the federal Centers for
Medicare and Medicaid Services, that apply to the demonstration
project.
   (p) "Uninsured" means an individual for whom there is no source of
third-party coverage for the health care services the individual
receives, as determined pursuant to the Special Terms and Conditions.

   (q) "Whole Person Care pilot program" means a local collaboration
among local governmental agencies, Medi-Cal managed care plans,
health care and behavioral health providers, or other community
organizations, as applicable, that are approved by the department to
implement strategies to serve one or more identified target
populations, pursuant to Section 14184.60 and the Special Terms and
Conditions.
   14184.20.  (a) Consistent with federal law, the Special Terms and
Conditions, and this article, the department shall implement the
Medi-Cal 2020 demonstration project, including, but not limited to,
all of the following components:
   (1) The Global Payment Program, as described in Section 14184.40.
   (2) The Public Hospital Redesign and Incentives in Medi-Cal
(PRIME) program, as described in Section 14184.50.
   (3) The Whole Person Care pilot program, as described in Section
14184.60.
   (4) The Dental Transformation Initiative, as described in Section
14184.70.
   (b) In the event of a conflict between any provision of this
article and the Special Terms and Conditions, the Special Terms and
Conditions shall control.
   (c) The department, as appropriate, shall consult with the
designated public hospitals, district and municipal public hospitals,
and other local governmental agencies with regard to the
implementation of the components of the demonstration project under
subdivision (a) in which they will participate, including, but not
limited to, the issuance of guidance pursuant to subdivision (d).
   (d) 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, interpret, or make specific this article or
the Special Terms and Conditions, in whole or in part, by means of
all-county letters, plan letters, provider bulletins, or other
similar instructions, without taking regulatory action. The
department shall provide notification to the Joint Legislative Budget
Committee and to the Senate Committees on Appropriations, Budget and
Fiscal Review, and Health, and the Assembly Committees on
Appropriations, Budget, and Health within 10 business days after the
above-described action is taken. The department shall make use of
appropriate processes to ensure that affected stakeholders are timely
informed of, and have access to, applicable guidance issued pursuant
to this authority, and that this guidance remains publicly available
until all payments related to the applicable demonstration component
are finalized.
   (e) For purposes of implementing this article or the Special Terms
and Conditions, the department may enter into exclusive or
nonexclusive contracts, or amend existing contracts, on a bid or
negotiated basis. Contracts entered into or amended pursuant to this
subdivision shall be exempt from Chapter 6 (commencing with Section
14825) of Part 5.5 of Division 3 of Title 2 of the Government Code
and Part 2 (commencing with Section 10100) of Division 2 of the
Public Contract Code, and shall be exempt from the review or approval
of any division of the Department of General Services.
   (f) During the course of the demonstration term, the department
shall seek any federal approvals it deems necessary to implement the
demonstration project and this article. This shall include, but is
not limited to, approval of any amendment, addition, or technical
correction to the Special Terms and Conditions, and any associated
state plan amendment, as deemed necessary. This article shall be
implemented only to the extent that any necessary federal approvals
are obtained and federal financial participation is available and is
not otherwise jeopardized.
   (g) The director may modify any process or methodology specified
in this article to the extent necessary to comply with federal law or
the Special Terms and Conditions of the demonstration project, but
only if the modification is consistent with the goals set forth in
this article for the demonstration project, and its individual
components, and does not significantly alter the relative level of
support for participating entities. If the director, after consulting
with those entities participating in the applicable demonstration
project component and that would be affected by that modification,
determines that the potential modification would not be consistent
with the goals set forth in this article or would significantly alter
the relative level of support for affected participating entities,
the modification shall not be made and the director shall execute a
declaration stating that this determination has been made. 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, and shall work with
the affected participating entities and the Legislature to make the
necessary statutory changes. 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 and the Legislative Counsel.
   (h) In the event of a determination that the amount of federal
financial participation available under the demonstration project is
reduced due to the application of penalties set forth in the Special
Terms and Conditions, the enforcement of the demonstration project's
budget neutrality limit, or other similar occurrence, the department
shall develop the methodology by which payments under the
demonstration project shall be reduced, in consultation with the
potentially affected participating entities and consistent with the
standards and process specified in subdivision (h). To the extent
feasible, those reductions shall protect the ability to claim the
full amount of the total computable disproportionate share allotment
through the Global Payment Program.
   (i) During the course of the demonstration term, the department
may work to develop potential successor payment methodologies that
could continue to support entities participating in the demonstration
project following the expiration of the demonstration term and that
further the goals set forth in this article and in the Special Terms
and Conditions. The department shall consult with the entities
participating in the payment methodologies under the demonstration
project, affected stakeholders, and the Legislature in the
development of any potential successor payment methodologies pursuant
to this subdivision.
   (j) The department may seek to extend the payment methodologies
described in this article through demonstration year 16 or to
subsequent time periods by way of amendment or extension of the
demonstration project, amendment to the Medi-Cal State Plan, or any
combination thereof, consistent with the applicable federal
requirements. This subdivision shall only be implemented after
consultation with the entities participating in, or affected by,
those methodologies, and only to the extent that any necessary
federal approvals are obtained and federal financial participation is
available and is not otherwise jeopardized.
   (k) (1) Notwithstanding any other law, and to the extent
authorized by the Special Terms and Conditions, the department may
claim federal financial participation for expenditures associated
with the designated state health programs identified in the Special
Terms and Conditions for use solely by the department as specified in
this subdivision.
   (2) Any federal financial participation claimed pursuant to
paragraph (1) shall be used to offset applicable General Fund
expenditures. These amounts are hereby appropriated to the department
and shall be available for transfer to the General Fund for this
purpose.
   (3) An amount of General Fund moneys equal to the federal
financial participation that may be claimed pursuant to paragraph (1)
is hereby appropriated to the Health Care Deposit Fund for use by
the department.
   14184.30.  The following payment methodologies and requirements
implemented pursuant to Article 5.2 (commencing with Section 14166)
shall be applicable as set forth in this section.
   (a) (1) For purposes of Section 14166.4, the references to
"project year" and "successor demonstration year" shall include
references to the demonstration term, as defined under this article,
and to any extensions of the prior federal Medicaid demonstration
project entitled "California Bridge to Reform Demonstration (Waiver
No. 11-W-00193/9)."
   (2) The fee-for-service payment methodologies established and
implemented under Section 14166.4 shall continue to apply with
respect to designated public hospitals approved under the Medi-Cal
State Plan.
   (3) For the hospitals identified in clauses (ii) and (iii) of
subparagraph (H) of paragraph (1) of subdivision (f) of Section
14184.10, the department shall seek any necessary federal approvals
to apply the fee-for-service payment methodologies established and
implemented under Section 14166.4 to these identified hospitals
effective no earlier than the 2016-17 state fiscal year. This
paragraph shall be implemented only to the extent that any necessary
federal approvals are obtained and federal financial participation is
available and not otherwise jeopardized. Prior to the effective date
of any necessary federal approval obtained pursuant to this
paragraph, these identified hospitals shall continue to be considered
nondesignated public hospitals for purposes of the fee-for-service
methodology authorized pursuant to Section 14105.28 and the
applicable provisions of the Medi-Cal State Plan.
   (4) The department shall continue to make reimbursement available
to qualifying hospitals that meet the eligibility requirements for
participation in the supplemental reimbursement program for hospital
facility construction, renovation, or replacement pursuant to Section
14085.5 and the applicable provisions of the Medi-Cal State Plan.
The department shall continue to make inpatient hospital payments for
services that were historically excluded from a hospital's contract
under the Selective Provider Contracting Program established under
Article 2.6 (commencing with Section 14081) in accordance with the
applicable provisions of the Medi-Cal State Plan. These payments
shall not duplicate or supplant any other payments made under this
article.
   (b) During the 2015-16 state fiscal year, and subsequent state
fiscal years that commence during the demonstration term, payment
adjustments to disproportionate share hospitals shall not be made
pursuant to Section 14105.98, except as otherwise provided in this
article. Payment adjustments to disproportionate share hospitals
shall be made solely in accordance with this article.
   (1) Except as otherwise provided in this article, the department
shall continue to make all eligibility determinations and perform all
payment adjustment amount computations under the disproportionate
share hospital payment adjustment program pursuant to Section
14105.98 and pursuant to the disproportionate share hospital
provisions of the Medi-Cal State Plan. For purposes of these
determinations and computations, which include those made pursuant to
Sections 14166.11 and 14166.16, all of the following shall apply:
   (A) The federal Medicaid DSH reductions pursuant to Section
1396r-4(f)(7) of Title 42 of the United States Code shall be
reflected as appropriate, including, but not limited to, the
calculations set forth in subparagraph (B) of paragraph (2) of
subdivision (am) of Section 14105.98.
   (B) Services that were rendered under the Low Income Health
Program authorized pursuant to Part 3.6 (commencing with Section
15909) shall be included.
   (2) (A) Notwithstanding Section 14105.98, the federal
disproportionate share hospital allotment specified for California
under Section 1396r-4(f) of Title 42 of the United States Code for
each of federal fiscal years 2016 to 2021, inclusive, shall be
aligned with the state fiscal year in which the applicable federal
fiscal year commences, and shall be distributed solely for the
following purposes:
   (i) As disproportionate share hospital payments under the
methodology set forth in applicable disproportionate share hospital
provisions of the Medi-Cal State Plan, which, to the extent permitted
under federal law and the Special Terms and Conditions, shall be
limited to the following hospitals:
   (I) Eligible hospitals, as determined pursuant to Section 14105.98
for each state fiscal year in which the particular federal fiscal
year commences, that meet the definition of a public hospital, as
specified in paragraph (25) of subdivision (a) of Section 14105.98,
and that are not participating as GPP systems under the Global
Payment Program.
   (II) Hospitals that are licensed to the University of California,
which meet the requirements set forth in Section 1396r-4(d) of Title
42 of the United States Code.
   (ii) As a funding component for payments under the Global Payment
Program, as described in subparagraph (A) of paragraph (1) of
subdivision (c) of Section 14184.40 and the Special Terms and
Conditions.
   (B) The distribution of the federal disproportionate share
hospital allotment to hospitals described in this paragraph shall
satisfy the state's payment obligations, if any, with respect to
those hospitals under Section 1396r-4 of Title 42 of the United
States Code.
   (3) (A) During the 2015-16 state fiscal year and subsequent state
fiscal years that commence during the demonstration term, a public
entity shall not be obligated to make any intergovernmental transfer
pursuant to Section 14163, and all transfer amount determinations for
those state fiscal years shall be suspended. However,
intergovernmental transfers shall be made with respect to the
disproportionate share hospital payment adjustments made in
accordance with clause (ii) of subparagraph (B) of paragraph (6), as
applicable.
   (B) During the 2015-16 state fiscal year and subsequent state
fiscal years that commence during the demonstration term, transfer
amounts from the Medi-Cal Inpatient Payment Adjustment Fund to the
Health Care Deposit Fund, as described in paragraph (2) of
subdivision (d) of Section 14163, are hereby reduced to zero. Unless
otherwise specified in this article or the applicable provisions of
Article 5.2 (commencing with Section 14166), this subparagraph shall
be disregarded for purposes of the calculations made under Section
14105.98 during the 2015-16 state fiscal year and subsequent state
fiscal years that commence during the demonstration term.
   (4) (A) During the state fiscal years for which the Global Payment
Program under Section 14184.40 is in effect, designated public
hospitals that are participating GPP systems shall not be eligible to
receive disproportionate share hospital payments pursuant to
otherwise applicable disproportionate share hospital provisions of
the Medi-Cal State Plan.
                                            (B) Eligible hospitals
described in clause (i) of subparagraph (A) of paragraph (2) that are
nondesignated public hospitals shall continue to receive
disproportionate share hospital payment adjustments as set forth in
Section 14166.16.
   (C) Hospitals described in clause (i) of subparagraph (A) of
paragraph (2) that are licensed to the University of California shall
receive disproportionate share hospital payments as follows:
   (i) Subject to clause (iii), each hospital licensed to the
University of California may draw and receive federal Medicaid
funding from the applicable federal disproportionate share hospital
allotment on the amount of certified public expenditures for the
hospital's expenditures that are eligible for federal financial
participation as reported in accordance with Section 14166.8 and the
applicable disproportionate share hospital provisions of the Medi-Cal
State Plan.
   (ii) Subject to clause (iii) and to the extent the hospital meets
the requirement in Section 1396r-4(b)(1)(A) of Title 42 of the United
States Code regarding the Medicaid inpatient utilization rate or
Section 1396r-4(b)(1)(B) of Title 42 of the United States Code
regarding the low-income utilization rate, each hospital shall
receive intergovernmental transfer-funded direct disproportionate
share hospital payments as provided for under the applicable
disproportionate share hospital provisions of the Medi-Cal State
Plan. The total amount of these payments to the hospital, consisting
of the federal and nonfederal components, shall in no case exceed
that amount equal to 75 percent of the hospital's uncompensated
Medi-Cal and uninsured costs of hospital services as reported in
accordance with Section 14166.8.
   (iii) Unless the provisions of subparagraph (D) apply, the
aggregate amount of the federal disproportionate share hospital
allotment with respect to payments for an applicable state fiscal
year to hospitals licensed to the University of California shall be
limited to an amount calculated as follows:
   (I) The maximum amount of federal disproportionate share hospital
allotment for the state fiscal year, less the amounts of federal
disproportionate share hospital allotment associated with payments to
nondesignated public hospitals under subparagraph (B) and other
payments, if any, required to be made from the federal
disproportionate share hospital allotment, shall be determined.
   (II) For the 2015-16 state fiscal year, the amount determined in
subclause (I) shall be multiplied by 26.296 percent, resulting in the
maximum amount of the federal disproportionate share hospital
allotment available as disproportionate share hospital payments for
the state fiscal year to hospitals that are licensed to the
University of California.
   (III) For the 2016-17 state fiscal year, the amount determined in
subclause (I) shall be multiplied by 24.053 percent, resulting in the
maximum amount of the federal disproportionate share hospital
allotment available as disproportionate share hospital payments for
the state fiscal year to hospitals that are licensed to the
University of California.
   (IV) For the 2017-18 state fiscal year, the amount determined in
subclause (I) shall be multiplied by 23.150 percent, resulting in the
maximum amount of the federal disproportionate share hospital
allotment available as disproportionate share hospital payments for
the state fiscal year to hospitals that are licensed to the
University of California.
   (V) For each of the 2018-19 and 2019-20 state fiscal years, the
amount determined in subclause (I) shall be multiplied by 21.896
percent, resulting in the maximum amount of the federal
disproportionate share hospital allotment available as
disproportionate share hospital payments for the state fiscal year to
hospitals that are licensed to the University of California.
   (VI) To the extent the limitations set forth in this clause result
in payment reductions for the applicable year, those reductions
shall be applied pro rata, subject to clause (vii).
   (iv) Each hospital licensed to the University of California shall
receive quarterly interim payments of its disproportionate share
hospital allocation during the applicable state fiscal year. The
determinations set forth in clauses (i) to (iii), inclusive, shall be
made on an interim basis prior to the start of each state fiscal
year, except that the determinations for the 2015-16 state fiscal
year shall be made as soon as practicable. The department shall use
the same cost and statistical data used in determining the interim
payments for Medi-Cal inpatient hospital services under Section
14166.4, and available payments and uncompensated and uninsured cost
data, including data from the Medi-Cal paid claims file and the
hospital's books and records, for the corresponding period, to the
extent permitted under the Medi-Cal State Plan.
   (v) No later than April 1 following the end of the relevant
reporting period for the applicable state fiscal year, the department
shall undertake an interim reconciliation of payments based on
Medi-Cal, Medicare, and other cost, payment, discharge, and
statistical data submitted by the hospital for the applicable state
fiscal year, and shall adjust payments to the hospital accordingly.
   (vi) Except as otherwise provided in this article, each hospital
licensed to the University of California shall receive
disproportionate share hospital payments subject to final audits of
all applicable Medi-Cal, Medicare, and other cost, payment,
discharge, and statistical data submitted by the hospital for the
applicable state fiscal year.
   (vii) Prior to the interim and final distributions of payments
pursuant to clauses (iv) to (vi), inclusive, the department shall
consult with the University of California, and implement any
adjustments to the payment distributions for the hospitals as
requested by the University of California, so long as the aggregate
net effect of the requested adjustments for the affected hospitals is
zero.
   (D) With respect to any state fiscal year commencing during the
demonstration term for which the Global Payment Program is not in
effect, designated public hospitals that are eligible hospitals as
determined pursuant to Section 14105.98, and hospitals described in
clause (i) of subparagraph (A) of paragraph (2) that are licensed to
the University of California, shall claim disproportionate share
hospital payments in accordance with the applicable disproportionate
share hospital provisions of the Medi-Cal State Plan. The allocation
of federal Medicaid funding from the applicable federal
disproportionate share hospital allotment shall be made in accordance
with the methodology set forth in Section 14166.61.
   (5) For each applicable state fiscal year during the demonstration
term, eligible hospitals, as determined pursuant to Section
14105.98, which are nonpublic hospitals, nonpublic-converted
hospitals, and converted hospitals, as those terms are defined in
paragraphs (26), (27), and (28), respectively, of subdivision (a) of
Section 14105.98, shall continue to receive Medi-Cal disproportionate
share hospital replacement payment adjustments pursuant to Section
14166.11 and other provisions of this article and applicable
provisions of the Medi-Cal State Plan. The payment adjustments so
provided shall satisfy the state's payment obligations, if any, with
respect to those hospitals under Section 1396r-4 of Title 42 of the
United States Code. The provisions of subdivision (j) of Section
14166.11 shall continue to apply with respect to the 2015-16 state
fiscal year and subsequent state fiscal years commencing during the
demonstration term. Except as may otherwise be required by federal
law, the federal share of these payments shall not be claimed from
the federal disproportionate share hospital allotment.
   (6) The nonfederal share of disproportionate share hospital
payments and disproportionate share hospital replacement payment
adjustments described in paragraphs (4) and (5) shall be derived from
the following sources:
   (A) With respect to the payments described in subparagraph (B) of
paragraph (4) that are made to nondesignated public hospitals, the
nonfederal share shall consist solely of state General Fund
appropriations.
   (B) With respect to the payments described in subparagraph (C) or
(D), as applicable, of paragraph (4) that are made to designated
public hospitals, the nonfederal share shall consist of both of the
following:
   (i) Certified public expenditures incurred by the hospitals for
hospital expenditures eligible for federal financial participation as
reported in accordance with Section 14166.8.
   (ii) Intergovernmental transfer amounts for direct
disproportionate share hospital payments provided for under
subparagraph (C) or (D) of paragraph (4) and the applicable
disproportionate share hospital provisions of the Medi-Cal State
Plan. A transfer amount shall be determined for each hospital that is
eligible for these payments, equal to the nonfederal share of the
payment amount established for the hospital. The transfer amount
determined shall be paid by the hospital, or the public entity with
which the hospital is affiliated, and deposited into the Medi-Cal
Inpatient Payment Adjustment Fund established pursuant to subdivision
(b) of Section 14163, as permitted under Section 433.51 of Title 42
of the Code of Federal Regulations or any other applicable federal
Medicaid laws.
   (C) With respect to the payments described in paragraph (5), the
nonfederal share shall consist of state General Fund appropriations.
   (7) The Demonstration Disproportionate Share Hospital Fund
established in the State Treasury pursuant to subdivision (d) of
Section 14166.9 shall be retained during the demonstration term. All
federal funds received by the department with respect to the
certified public expenditures claimed pursuant to subparagraph (C),
and, as applicable in subparagraph (D), of paragraph (4) shall be
transferred to the fund and disbursed to the eligible designated
public hospitals pursuant to those applicable provisions.
Notwithstanding Section 13340 of the Government Code, moneys
deposited in the fund shall be continuously appropriated, without
regard to fiscal year, to the department solely for the purposes
specified in this article.
   (c) (1) Disproportionate share hospital payment allocations under
Sections 14166.3 and 14166.61, and safety net care pool payment
allocations under Section 14166.71, that were paid to designated
public hospitals with respect to the period July 1, 2015, through
October 31, 2015, or for subsequent periods pursuant to Section
14166.253, shall be reconciled to amounts payable to the hospitals
under this article as set forth in this subdivision.
   (2) The disproportionate share hospital payments and safety net
care pool payments described in paragraph (1) that were paid to a
designated public hospital participating in a GPP system under
Section 14184.40 shall be deemed to be interim payments under the
Global Payment Program for GPP program year 2015-16, and will be
reconciled to and offset against the interim payment amount due to
the GPP system under subparagraph (B) of paragraph (4) of subdivision
(d) of Section 14184.40, consistent with the Special Terms and
Conditions.
   (3) The disproportionate share hospital payments described in
paragraph (1) that were paid to designated public hospitals licensed
to the University of California shall be reconciled to and offset
against the disproportionate share hospital payments payable to the
hospitals under subparagraph (C) of paragraph (4) of subdivision (b)
for the 2015-16 state fiscal year.
   (4) The safety net care pool payments described in paragraph (1)
that were paid to designated public hospitals licensed to the
University of California shall be recouped and included as available
funding under the Global Payment Program for the 2015-16 GPP program
year described in subparagraph (B) of paragraph (1) of subdivision
(c) of Section 14184.40.
   (d) During the 2015-16 state fiscal year, and subsequent state
fiscal years that commence during the demonstration term, costs shall
continue to be determined and reported for designated public
hospitals in accordance with Sections 14166.8 and 14166.24, except as
follows:
   (1) (A) The provisions of subdivision (c) of Section 14166.8 shall
not apply.
   (B) Notwithstanding subparagraph (A), the department may require
the reporting of any data the department deems necessary to satisfy
reporting requirements pursuant to the Special Terms and Conditions.
   (2) The provisions of Sections 14166.221 and 15916 shall not apply
with respect to any costs reported for the demonstration term
pursuant to Section 14166.8.
   (e) (1) Notwithstanding subdivision (h) of Section 14166.61 and
subdivision (c) of Section 14166.71, the disproportionate share
hospital allocation and safety net care pool payment determinations
and payments for the 2013-14 and 2014-15 state fiscal years shall be
deemed final as of the April 30 that is 22 months following the close
of the respective state fiscal year, to the extent permitted under
federal law and subject to recoupment pursuant to subdivision (f) if
it is later determined that federal financial participation is not
available for any portion of the applicable payments.
   (2) The determinations and payments shall be finalized using the
best available data, including unaudited data, and reasonable current
estimates and projections submitted by the designated public
hospitals. The department shall accept all appropriate revisions to
the data, estimates, and projections previously submitted, including
revised cost reports, for purposes of this subdivision, to the extent
these revisions are submitted in a timely manner as determined by
the department.
   (f) Upon receipt of a notice of disallowance or deferral from the
federal government related to the certified public expenditures or
intergovernmental transfers of a designated public hospital or
governmental entity with which it is affiliated for disproportionate
share hospital payments or safety net care pool payments claimed and
distributed pursuant to Section 14166.61, 14166.71, or 15916 for the
2013-14 or 2014-15 state fiscal year, the department shall promptly
notify the designated public hospitals and proceed as follows:
   (1) To the extent there are additional certified public
expenditures for the applicable state fiscal year for which federal
funds have not been received, but for which federal funds could have
been received had additional federal funds been available, including
any subsequently allowable expenditures for designated state health
programs, the department shall first respond to the deferral or
disallowance by substituting the additional certified public
expenditures or allowable expenditures for those deferred or
disallowed, consistent with the claiming optimization priorities set
forth in Section 14166.9, in consultation with the designated public
hospitals, but only to the extent that any necessary federal
approvals are obtained or these actions are otherwise permitted by
federal law.
   (2) The department shall consult with the designated public
hospitals and proceed in accordance with paragraphs (2) and (3) of
subdivision (d) of Section 14166.24.
   (3) If the department elects to appeal pursuant to paragraph (3)
of subdivision (d) of Section 14166.24, the department shall not
implement any recoupment of payments from the affected designated
public hospitals, until a final disposition has been made regarding
the deferral or disallowance, including the conclusion of applicable
administrative and judicial review, if any.
   (4) (A) Upon final disposition of the federal deferral or
disallowance, the department shall determine the resulting aggregate
repayment amount of federal funds for each affected state fiscal
year.
   (B) The department shall determine the ratio of the aggregate
repayment amount to the total amount of the federal share of payments
finalized and distributed pursuant to Sections 14166.61 and 14166.71
and subdivision (e) for each affected state fiscal year, expressed
as a percentage.
   (5) Notwithstanding paragraph (1) of subdivision (d) of Section
14166.24, the responsibility for repayment of the federal portion of
any deferral of disallowance for each affected year shall be
determined as follows:
   (A) The provisions of subdivision (g) of Section 15916 shall be
applied to determine the department's repayment responsibility amount
with respect to any deferral or disallowance related to safety net
care pool payments, which shall be in addition to amounts determined
under subparagraph (E).
   (B) Using the most recent data for the applicable fiscal year, and
reflecting modifications to the applicable initial DSH claiming
ability and initial SNCP claiming ability for individual hospitals
resulting from the deferral or disallowance, the department shall
perform the calculations and determinations for each designated
public hospital as set forth in Sections 14166.61 and 14166.71. For
this purpose, the calculations and determinations shall assume no
reduction in the available federal disproportionate share hospital
allotment or in the amount of available safety net care pool payments
as a result of the deferral or disallowance.
   (C) For each designated public hospital, the revised
determinations of disproportionate share hospital and safety net care
pool payment amounts under subparagraph (B) shall be combined and
compared to the combined disproportionate share hospital and safety
net care pool payment amounts determined and received by the hospital
pursuant to subdivision (e). For this purpose and purposes of
subparagraph (D), the applicable data for designated public hospitals
described in subparagraph (G) of paragraph (1) of subdivision (f) of
Section 14184.10 shall be combined, and the applicable data for
designated public hospitals described in subparagraphs (E) and (F) of
paragraph (1) of subdivision (f) of Section 14184.10 shall be
combined.
   (D) (i) Subject to subparagraph (E), the repayment of the federal
portion of the deferral of disallowance, less the department's
responsibility amount for safety net care pool payments, if any,
determined in subparagraph (A), shall be first allocated among each
of those designated public hospitals for which the combined revised
disproportionate share hospital and safety net care pool payments as
determined in subparagraph (B) are less than the combined
disproportionate share hospital and safety net care pool payment
amounts determined and received pursuant to subdivision (e).
Repayment shall be allocated under this initial stage among these
hospitals pro rata on the basis of each hospital's relative reduction
as reflected in the revised calculations performed under
subparagraph (B), but in no case shall the allocation to a hospital
exceed the limit in clause (iii). Repayment amounts that are not
allocated due to this limitation shall be allocated pursuant to
clause (ii).
   (ii) Subject to subparagraph (E), any repayment amounts that were
unallocated to hospitals due to the limitation in clause (iii) shall
be allocated in a second stage among each of the remaining designated
public hospitals that has not reached its applicable repayment
limit, including the hospitals that were not subject to the
allocations under clause (i), based pro rata on the amounts
determined and received by the hospital pursuant to subdivision (e),
except that no repayment amount for a hospital shall exceed the
limitation under clause (iii). The pro rata allocation process will
be repeated in subsequent stages with respect to any repayment
amounts that cannot be allocated in a prior stage to hospitals due to
the limitation under clause (iii), until the entire federal
repayment amount has been allocated among the hospitals.
   (iii) The repayment amount allocated to a designated public
hospital pursuant to this subparagraph shall not exceed an amount
equal to the percentage of the combined payments determined and
received by the hospital pursuant to subdivision (e) that is twice
the percentage computed in subparagraph (B) of paragraph (4).
   (E) Notwithstanding any other law, if the affiliated governmental
entity for the designated public hospital is a county subject to the
provisions of Article 12 (commencing with Section 17612.1) of Chapter
6 of Part 5, the department, in consultation with the affected
designated public hospital, and the Department of Finance, shall
determine how to account for whether any repayment amount determined
for the designated public hospital pursuant to subparagraph (D) for
the 2013-14 and 2014-15 state fiscal years would otherwise have
affected, if at all, the applicable county's redirection obligation
for the applicable state fiscal year pursuant to paragraphs (4) and
(5) of subdivision (a) of Section 17612.3 and shall determine what
adjustments, if any, are necessary to either the repayment amount or
the applicable county's redirection obligation. For purposes of this
subparagraph, the provisions of subdivision (f) of Section 17612.2
and paragraph (7) of subdivision (e) of Section 101853 of the Health
and Safety Code shall apply.
   (g) The provisions of Article 5.2 (commencing with Section 14166)
shall remain in effect until all payments authorized pursuant to that
article have been paid, finalized, and settled, and to the extent
its provisions are retained for purposes of this article.
   14184.40.  (a) (1) The department shall implement the Global
Payment Program authorized under the demonstration project to support
participating public health care systems that provide health care
services for the uninsured. Under the Global Payment Program, GPP
systems receive global payments based on the health care they provide
to the uninsured, in lieu of traditional disproportionate share
hospital payments and safety net care pool payments previously made
available pursuant to Article 5.2 (commencing with Section 14166).
   (2) The Global Payment Program is intended to streamline funding
sources for care for California's remaining uninsured population,
creating a value-based mechanism to increase incentives to provide
primary and preventive care services and other high-value services.
The Global Payment Program supports GPP systems for their key role
providing and promoting effective, higher value services to
California's remaining uninsured. Promoting more cost-effective and
higher value care means that the payment structure rewards the
provision of care in more appropriate venues for patients, and will
support structural changes to the care delivery system that will
improve the options for treating both Medi-Cal and uninsured
patients.
   (3) Under the Global Payment Program, GPP systems will receive
Global Payment Program payments calculated using an innovative
value-based point methodology that incorporates measures of value for
the patient in conjunction with the recognition of costs. To receive
the full amount of Global Payment Program payments, a GPP system
shall provide a threshold level of services, as measured in the point
methodology described in paragraph (2) of subdivision (c), and based
on the GPP system's historical volume, cost, and mix of services.
This payment methodology is intended to support GPP systems that
continue to provide services to the uninsured, while incentivizing
the GPP systems to shift the overall delivery of services for the
uninsured to provide more cost-effective, higher value care.
   (4) The department shall implement and oversee the operation of
the Global Payment Program in accordance with the Special Terms and
Conditions and the requirements of this section, to maximize the
amount of federal financial participation available to participating
GPP systems.
   (b) For purposes of this article, the following definitions shall
apply:
   (1) "GPP system" means a public health care system that consists
of a designated public hospital, as defined in subdivision (f) of
Section 14184.10 but excluding the hospitals operated by the
University of California, and its affiliated and contracted
providers. Multiple designated public hospitals operated by a single
legal entity may belong to the same GPP system, to the extent set
forth in the Special Terms and Conditions.
   (2) "GPP program year" means a state fiscal year beginning on July
1 and ending on June 30 during which the Global Payment Program is
authorized under the demonstration project, beginning with state
fiscal year 2015-16, and, as applicable, each state fiscal year
thereafter through 2019-20, and any years or partial years during
which the Global Payment Program is authorized under an extension or
successor to the demonstration.
   (c) (1) For each GPP program year, the department shall determine
the Global Payment Program's aggregate annual limit, which is the
maximum amount of funding available under the demonstration project
for the Global Payment Program and which is the sum of the components
described in subparagraphs (A) and (B). To the extent feasible, the
aggregate annual limit shall be determined and made available by the
department prior to the implementation of a GPP program year, and
shall be updated and adjusted as necessary to reflect changes or
adjustments to the amount of funding available for the Global Payment
Program.
   (A) A portion of the federal disproportionate share allotment
specified for California under Section 1396r-4(f) of Title 42 of the
United States Code shall be included as a component of the aggregate
annual limit for each GPP program year. The amount of this portion
shall equal the state's total computable disproportionate share
allotment reduced by the maximum amount of funding projected for
payments pursuant to subparagraphs (B) and (C) of paragraph (4) of
subdivision (b) of Section 14184.30 to disproportionate share
hospitals that are not participating in the Global Payment Program.
For purposes of this determination, the federal disproportionate
share allotment shall be aligned with the GPP program year in which
the applicable federal fiscal year commences.
   (B) The aggregate annual limit shall also include the amount
authorized under the demonstration project for the uncompensated care
component of the Global Payment Program for the applicable GPP
program year, as determined pursuant to the Special Terms and
Conditions.
   (2) The department shall develop a methodology for valuing health
care services and activities provided to the uninsured that achieves
the goals of the Global Payment Program, including those values set
forth in subdivision (a) and as expressed in the Special Terms and
Conditions. The points assigned to a particular service or activity
shall be the same across all
            GPP systems. Points for specific services or activities
may be increased or decreased over time as the Global Payment Program
progresses, to incentivize appropriate changes in the mix of
services provided to the uninsured. To the extent necessary, the
department shall obtain federal approval for the methodology and any
applicable changes to the methodology.
   (3) For each GPP system, the department shall perform a baseline
analysis of the GPP system's historical volume, cost, and mix of
services to the uninsured to establish an annual threshold for
purposes of the Global Payment Program. The annual threshold shall be
measured in points established through the methodology developed
pursuant to paragraph (2) and as set forth in the Special Terms and
Conditions.
   (4) The department shall determine a pro rata allocation
percentage for each GPP system by dividing the GPP system's annual
threshold determined in paragraph (3) by the sum of all GPP systems'
thresholds.
   (5) For each GPP system, the department shall determine an annual
budget the GPP system will receive if it achieves its threshold. A
GPP system's annual budget shall equal the allocation percentage
determined in paragraph (4) for the GPP system, multiplied by the
Global Payment Program's aggregate annual limit determined in
paragraph (1).
   (6) In the event of a change in the aggregate annual limit, the
department shall adjust and recalculate each GPP system's annual
threshold and annual budget in proportion to changes in the aggregate
annual limit calculated in paragraph (1) in accordance with the
Special Terms and Conditions.
   (d) The amount of Global Payment Program funding payable to a GPP
system for a GPP program year shall be calculated as follows, subject
to the Special Terms and Conditions:
   (1) The full amount of a GPP system's annual budget shall be
payable to the GPP system if the services it provided to the
uninsured during the GPP program year, as measured and scored using
the point methodology described under paragraph (2) of subdivision
(c), meets or exceeds its threshold for a given year. For GPP systems
that do not achieve their threshold, the amount payable to the GPP
system shall equal its annual budget reduced by the proportion by
which it fell short of its threshold.
   (2) The department shall develop a methodology to redistribute
unearned Global Payment Program funds for a given GPP program year to
those GPP systems that exceeded their respective threshold for that
same year. To the extent sufficient funds are available for all
qualifying GPP systems, the GPP system's redistributed amount shall
equal the GPP system's annual budget multiplied by the percentage by
which the GPP system exceeded its threshold, and any remaining
amounts of unearned funds will remain undistributed. If sufficient
funds are unavailable to make all these payments to qualifying GPP
systems, the amounts of these additional payments will be reduced for
all qualifying GPP systems by the same proportion, so that the full
amount of unearned Global Payment Program funds are redistributed.
Redistributed payment amounts calculated pursuant to this paragraph
shall be added to the amounts payable to a GPP system calculated
pursuant to paragraph (1).
   (3) The department shall specify a reporting schedule for
participating GPP systems to submit an interim yearend report and a
final reconciliation report for each GPP program year. The interim
yearend report and the final reconciliation report shall identify the
services the GPP system provided to the uninsured during the GPP
program year, the associated point calculation, and the amount of
payments earned by the GPP system prior to any redistribution. The
method and format of the reporting shall be established by the
department, consistent with the approved Special Terms and
Conditions.
   (4) Payments shall be made in the manner and within the timeframes
as follows, except if one or more GPP systems fail to provide the
intergovernmental transfer amount determined pursuant to subdivision
(g) by the date specified in this paragraph, the timeframe for the
associated payments shall be extended to the extent necessary to
allow the department to timely process the payments. In no event,
however, shall payment be delayed beyond 21 days after all the
necessary intergovernmental transfers have been made.
   (A) Except as provided in subparagraph (B), for each of the first
three quarters of a GPP program year the department shall notify GPP
systems of their payment amounts and intergovernmental transfer
amounts and make a quarterly interim payment equal to 25 percent of
each GPP system's annual global budget to the GPP system.
   (i) For quarters ending September 30, the payment amount and
intergovernmental transfer amount notice shall be sent by September
15, intergovernmental transfers shall be due by September 22, and
payments shall be made by October 15.
   (ii) For quarters ending December 31, the payment amount and
intergovernmental transfer amount notice shall be sent by December
15, intergovernmental transfers shall be due by December 22, and
payments shall be made by January 15.
   (iii) For quarters ending March 31, the payment amount and
intergovernmental transfer amount notice shall be sent by March 15,
intergovernmental transfers shall be due by March 22, and payments
shall be made by April 15.
   (B) For the 2015-16 GPP program year, the department shall make
the quarterly interim payments described in subdivision (a) in a
single interim payment for the first three quarters as soon as
practicable following approval of the Global Payment Program
protocols as part of the Special Terms and Conditions and receipt of
the associated intergovernmental transfers. The amount of this
interim payment that is otherwise payable to a GPP system shall be
reduced by the payments described in paragraph (2) of subdivision (c)
of Section 14184.30 that were received by a designated public
hospital affiliated with the GPP system.
   (C) By September 15 following the end of each GPP program year,
the department shall determine and notify each GPP system of the
amount the GPP system earned for the GPP program year pursuant to
paragraph (1) based on its interim yearend report, the amount of
additional interim payments necessary to bring the GPP system's
aggregate interim payments for the GPP program year to that amount,
and the transfer amounts calculated pursuant to subdivision (g). If
the GPP system has earned less than 75 percent of its annual budget,
no additional interim payment will be made for the GPP program year.
Intergovernmental transfer amounts shall be due by September 22
following the end of the GPP program year, and interim payments shall
be made by October 15 following the end of each GPP program year.
All interim payments shall be subject to reconciliation after the
submission of the final reconciliation report.
   (D) By June 30 following the end of each GPP program year, the
department shall review the final reconciliation reports and
determine and notify each GPP system of the final amounts earned by
the GPP system for the GPP program year pursuant to paragraph (1), as
well as the redistribution amounts, if any, pursuant to paragraph
(2), the amount of the payment adjustments or recoupments necessary
to reconcile interim payments to those amounts, and the transfer
amount pursuant to subdivision (g). Intergovernmental transfer
amounts shall be due by July 14 following the notification, and final
reconciliation payments for the GPP program year shall be made no
later than August 15 following this notification.
   (e) The Global Payment Program provides a source of funding for
GPP systems to support their ability to make health care activities
and services available to the uninsured, and shall not be construed
to constitute or offer health care coverage for individuals receiving
services. Global Payment Program payments are not paid on behalf of
specific individuals, and participating GPP systems may determine the
scope, type, and extent to which services are available, to the
extent consistent with the Special Terms and Conditions. The
operation of the Global Payment Program shall not be construed to
decrease, expand, or otherwise alter the scope of a county's
obligations to the medically indigent pursuant to Part 5 (commencing
with Section 17000) of Division 9.
   (f) The nonfederal share of any payments under the Global Payment
Program shall consist of voluntary intergovernmental transfers of
funds provided by designated public hospitals or affiliated
governmental agencies or entities, in accordance with this section.
   (1) The Global Payment Program Special Fund is hereby established
in the State Treasury. Notwithstanding Section 13340 of the
Government Code, moneys deposited in the Global Payment Program
Special Fund shall be continuously appropriated, without regard to
fiscal years, to the department for the purposes specified in this
section. All funds derived pursuant to this section shall be
deposited in the State Treasury to the credit of the Global Payment
Program Special Fund.
   (2) The Global Payment Program Special Fund shall consist of
moneys that a designated public hospital or affiliated governmental
agency or entity elects to transfer to the department for deposit
into the fund as a condition of participation in the Global Payment
Program, to the extent permitted under Section 433.51 of Title 42 of
the Code of Federal Regulations, the Special Terms and Conditions,
and any other applicable federal Medicaid laws. Except as otherwise
provided in paragraph (3), moneys derived from these
intergovernmental transfers in the Global Payment Program Special
Fund shall be used as the source for the nonfederal share of Global
Payment Program payments authorized under the demonstration project.
Any intergovernmental transfer of funds provided for purposes of the
Global Payment Program shall be made as specified in this section.
Upon providing any intergovernmental transfer of funds, each
transferring entity shall certify that the transferred funds qualify
for federal financial participation pursuant to applicable federal
Medicaid laws and the Special Terms and Conditions, and in the form
and manner as required by the department.
   (3) The department shall claim federal financial participation for
GPP payments using moneys derived from intergovernmental transfers
made pursuant to this section, and deposited in the Global Payment
Program Special Fund to the full extent permitted by law. The moneys
disbursed from the fund, and all associated federal financial
participation, shall be distributed only to GPP systems and the
governmental agencies or entities to which they are affiliated, as
applicable. In the event federal financial participation is not
available with respect to a payment under this section and either is
not obtained, or results in a recoupment of payments already made,
the department shall return any intergovernmental transfer fund
amounts associated with the payment for which federal financial
participation is not available to the applicable transferring
entities within 14 days from the date of the associated recoupment or
other determination, as applicable.
   (4) As a condition of participation in the Global Payment Program,
each designated public hospital or affiliated governmental agency or
entity, agrees to provide intergovernmental transfer of funds
necessary to meet the nonfederal share obligation as calculated under
subdivision (g) for Global Payment Program payments made pursuant to
this section and the Special Terms and Conditions. Any
intergovernmental transfer of funds made pursuant to this section
shall be considered voluntary for purposes of all federal laws. No
state General Fund moneys shall be used to fund the nonfederal share
of any Global Payment Program payment.
   (g) For each scheduled quarterly interim payment, interim yearend
payment, and final reconciliation payment pursuant to subdivision
(d), the department shall determine the intergovernmental transfer
amount for each GPP system as follows:
   (1) The department shall determine the amount of the quarterly
interim payment, interim yearend payment, or final reconciliation
payment, as applicable, that is payable to each GPP system pursuant
to subdivision (d). For purposes of these determinations, the
redistributed amounts described in paragraph (2) of subdivision (d)
shall be disregarded.
   (2) The department shall determine the aggregate amount of
intergovernmental transfers necessary to fund the nonfederal share of
the quarterly interim payment, interim yearend payment, or final
reconciliation payment, as applicable, identified in paragraph (1)
for all the GPP systems.
   (3) With respect to each quarterly interim payment, interim
yearend payment, or final yearend reconciliation payment, as
applicable, an initial transfer amount shall be determined for each
GPP system, calculated as the amount for the GPP system determined in
paragraph (1), multiplied by the nonfederal share percentage, as
defined in Section 14184.10, and multiplied by the applicable GPP
system-specific IGT factor as follows:
   (A) Los Angeles County Health System: 1.100.
   (B) Alameda Health System: 1.137.
   (C) Arrowhead Regional Medical Center: 0.923.
   (D) Contra Costa Regional Medical Center: 0.502.
   (E) Kern Medical Center: 0.581.
   (F) Natividad Medical Center: 1.183.
   (G) Riverside University Health System-Medical Center: 0.720.
   (H) San Francisco General Hospital: 0.507.
   (I) San Joaquin General Hospital: 0.803.
   (J) San Mateo Medical Center: 1.325.
   (K) Santa Clara Valley Medical Center: 0.706.
   (L) Ventura County Medical Center: 1.401.
   (4) The initial transfer amount for each GPP system determined
under paragraph (3) shall be further adjusted as follows to ensure
that sufficient intergovernmental transfers are available to make
payments to all GPP systems:
   (A) With respect to each quarterly interim payment, interim
yearend payment, or final reconciliation payment, as applicable, the
initial transfer amounts for all GPP systems determined under
paragraph (3) shall be added together.
   (B) The sum of the initial transfer amounts in subparagraph (A)
shall be subtracted from the aggregate amount of intergovernmental
transfers necessary to fund the payments as determined in paragraph
(2). The resulting positive or negative amount shall be the aggregate
positive or negative intergovernmental transfer adjustment.
   (C) Each GPP system-specific IGT factor, as specified in
subparagraphs (A) to (L), inclusive, of paragraph (3) shall be
subtracted from 2.000, yielding an IGT adjustment factor for each GPP
system.
   (D) The IGT adjustment factor calculated in subparagraph (C) for
each GPP system shall be multiplied by the positive or negative
amount in subparagraph (B), and multiplied by the allocation
percentage determined for the GPP system in paragraph (4) of
subdivision (c), yielding the amount to be added or subtracted from
the initial transfer amount determined in paragraph (3) for the
applicable GPP system.
   (E) The transfer amount to be paid by each GPP system with respect
to the applicable quarterly interim payment, interim yearend
payment, or final reconciliation payment, shall equal the initial
transfer amount determined in paragraph (3) as adjusted by the amount
determined in subparagraph (D).
   (5) Upon the determination of the redistributed amounts described
in paragraph (2) of subdivision (d) for the final reconciliation
payment, the department shall, with respect to each GPP system that
exceeded its respective threshold, determine the associated
intergovernmental transfer amount equal to the nonfederal share that
is necessary to draw down the additional payment, and shall include
this amount in the GPP system's transfer amount.
   (h) The department may initiate audits of GPP systems' data
submissions and reports, and may request supporting documentation.
Any audits conducted by the department shall be complete within 22
months of the end of the applicable GPP program year to allow for the
appropriate finalization of payments to the participating GPP
system, but subject to recoupment if it is later determined that
federal financial participation is not available for any portion of
the applicable payments.
   (i) If the department determines, during the course of the
demonstration term and in consultation with participating GPP
systems, that the Global Payment Program should be terminated for
subsequent years, the department shall terminate the Global Payment
Program by notifying the federal Centers for Medicare and Medicaid
Services in accordance with the timeframes specified in the Special
Terms and Conditions. In the event of this type of termination, the
department shall issue a declaration terminating the Global Payment
Program and shall work with the federal Centers for Medicare and
Medicaid Services to finalize all remaining payments under the Global
Payment Program. Subsequent to the effective date for any
termination accomplished pursuant to this subdivision, the designated
public hospitals that participated in the Global Payment Program
shall claim and receive disproportionate share hospital payments, if
eligible, as described in subparagraph (D) of paragraph (4) of
subdivision (b) of Section 14184.30, but only to the extent that any
necessary federal approvals are obtained and federal financial
participation is available and not otherwise jeopardized.
   14184.50.  (a) (1) The department shall establish and operate the
Public Hospital Redesign and Incentives in Medi-Cal (PRIME) program
to build upon the foundational delivery system transformation work,
expansion of coverage, and increased access to coordinated primary
care achieved through the prior California's "Bridge to Reform"
Medicaid demonstration project. The activities supported by the PRIME
program are designed to accelerate efforts by participating PRIME
entities to change care delivery to maximize health care value and
strengthen their ability to successfully perform under risk-based
alternative payment models in the long term and consistent with the
demonstration's goals. Participating PRIME entities consist of two
types of entities: designated public hospital systems and district
and municipal public hospitals.
   (2) Participating PRIME entities shall be eligible to earn
incentive payments by undertaking projects set forth in the Special
Terms and Conditions, for which there are required project metrics
and targets. Additionally, a minimum number of required projects is
specified for each designated public hospital system.
   (3) The department shall provide participating PRIME entities the
opportunity to earn the maximum amount of funds authorized for the
PRIME program under the demonstration project. Under the
demonstration project, funding is available for the designated public
hospital systems and the district and municipal public hospitals
through two separate pools. Subject to the Special Terms and
Conditions, up to one billion four hundred million dollars
($1,400,000,000) is authorized annually for the designated public
hospital systems pool, and up to two hundred million dollars
($200,000,000) is authorized annually for the district and municipal
public hospitals pool, during the first three years of the
demonstration project, with reductions to these amounts in the fourth
and fifth years. Except in those limited instances specifically
authorized by the Special Terms and Conditions, the funding that is
authorized for each respective pool shall only be available to
participating PRIME entities within that pool.
   (4) PRIME payments shall be incentive payments, and are not
payments for services otherwise reimbursable under the Medi-Cal
program, nor direct reimbursement for expenditures incurred by
participating PRIME entities in implementing reforms. PRIME incentive
payments shall not offset payment amounts otherwise payable by the
Medi-Cal program, or to and by Medi-Cal managed care plans for
services provided to Medi-Cal beneficiaries, or otherwise supplant
provider payments payable to PRIME entities.
   (b) For purposes of this article, the following definitions shall
apply:
   (1) "Alternative payment methodology" or "APM" means a payment
made from a Medi-Cal managed care plan to a designated public
hospital system for services covered for a beneficiary assigned to a
designated public hospital system that meets the conditions set forth
in the Special Terms and Conditions and approved by the department,
as applicable.
   (2) "Designated public hospital system" means a designated public
hospital, as listed in the Special Terms and Conditions, and its
affiliated governmental providers and contracted governmental and
nongovernmental entities that constitute a system with an approved
project plan under the PRIME program. A single designated public
hospital system may include multiple designated public hospitals
under common government ownership.
   (3) "District and municipal public hospitals" means those
nondesignated public hospitals, as listed in the Special Terms and
Conditions, that have an approved project plan under the PRIME
program.
   (4) "Participating PRIME entity" means a designated public
hospital system or district and municipal public hospital
participating in the PRIME program.
   (5) "PRIME program year" means the state fiscal year beginning on
July 1 and ending on June 30 during which the PRIME program is
authorized, except that the first PRIME program year shall commence
on January 1, 2016, and, as applicable, means each state fiscal year
thereafter through the 2019-20 state fiscal year, and any years or
partial years during which the PRIME program is authorized under an
extension or successor to the demonstration.
   (c) (1) Within 30 days following federal approval of the protocols
setting forth the PRIME projects, metrics, and funding mechanics,
each participating PRIME entity shall submit a five-year PRIME
project plan containing the specific elements required in the Special
Terms and Conditions. The department shall review all five-year
PRIME project plans and take action within 60 days to approve or
disapprove each five-year PRIME project plan.
   (2) Participating PRIME entities may modify projects or metrics in
their five-year PRIME project plan, to the extent authorized under
the demonstration project and approved by the department.
   (d) (1) Each participating PRIME entity shall submit reports to
the department twice a year demonstrating progress toward required
metric targets. A standardized report form shall be developed jointly
by the department and participating PRIME entities for this purpose.
The mid-year report shall be due March 31 of each PRIME program
year, except that, for the 2015-16 project year only, the submission
of an acceptable five-year PRIME project plan in accordance with the
Special Terms and Conditions shall constitute the submission of the
mid-year report. The yearend report shall be due September 30
following each PRIME program year.
   (2) The submission of the project reports pursuant to paragraph
(1) shall constitute a request for payment. Amounts payable to the
participating PRIME entity shall be determined based on the
achievement of the metric targets included in the mid-year report and
yearend report, as applicable.
   (3) Within 14 days following the submission of the mid-year and
yearend reports, the department shall confirm the amounts payable to
participating PRIME entities and shall issue requests to each
participating PRIME entity for the intergovernmental transfer amounts
necessary to draw down the federal funding for the applicable PRIME
incentive payment to that entity.
   (A) Any intergovernmental transfers provided for purposes of this
section shall be deposited in the Public Hospital Investment,
Improvement, and Incentive Fund established pursuant to Section
14182.4 and retained pursuant to paragraph (1) of subdivision (f).
   (B) Participating PRIME entities or their affiliated governmental
agencies or entities shall make the intergovernmental transfer to the
department within seven days of receiving the department's request.
In the event federal approval for a payment is not obtained, the
department shall return the intergovernmental transfer funds to the
transferring entity within 14 days.
   (C) PRIME payments to a participating PRIME entity shall be
conditioned upon the department's receipt of the intergovernmental
transfer amount from the applicable entity. If the intergovernmental
transfer is made within the appropriate timeframe, the incentive
payment shall be disbursed in accordance with paragraph (4),
otherwise the payment shall be disbursed within 14 days of when the
intergovernmental transfer is provided.
   (4) Subject to paragraph (3), and except with respect to the
2015-16 project year, amounts payable based on the mid-year reports
shall be paid no later than April 30, and amounts payable based on
the yearend report shall be paid no later than October 31. In the
event of insufficient or misreported data, these payment deadlines
may be extended up to 60 days to allow time for the reports to be
adequately corrected for approval for payment. If corrected data is
not submitted to enable payment to be made within the extended
timeframe, the participating entity shall not receive PRIME payment
for the period in question. For the 2015-16 project year only, 25
percent of the annual allocation for the participating PRIME entity
shall be payable within 14 days following the approval of the
five-year PRIME project plan. The remaining 75 percent of the
participating PRIME entity's annual allocation shall be available
following the 2015-16 yearend report, subject to the requirements in
paragraph (2) of subdivision (e).
   (5) The department shall draw down the federal funding and pay
both the nonfederal and federal shares of the incentive payment to
the participating PRIME entity, to the extent federal financial
participation is available.
   (e) The amount of PRIME incentive payments payable to a
participating PRIME entity shall be determined as follows:
   (1) The department shall allocate the full amount of annual
funding authorized under the PRIME project pools across all domains,
projects, and metrics undertaken in the manner set forth in the
Special Terms and Conditions. Separate allocations shall be
determined for the designated public hospital system pool and the
district and municipal hospital pool. The allocations shall determine
the aggregate annual amount of funding that may be earned for each
domain, project, and metric for all participating PRIME entities
within the appropriate pool.
      (A) The department shall allocate the aggregate annual amounts
determined for each project and metric under the designated public
hospital system pool among participating designated public hospital
systems through an allocation methodology that takes into account
available system-specific data, primarily based on the unique number
of Medi-Cal beneficiaries treated, consistent with the Special Terms
and Conditions. For the 2015-16 project year only, the approval of
the five-year PRIME project plans for designated public hospital
systems will be considered an appropriate metric target and will
equal up to 25 percent of a designated public hospital system's
annual allocation for that year.
   (B) The department shall allocate the aggregate annual amounts
determined for each project and metric under the district and
municipal public hospital system pool among participating district
and municipal public hospital systems through an allocation
methodology that takes into account available system-specific data
that includes Medi-Cal and uninsured care, the number of projects
being undertaken, and a baseline floor funding amount, consistent
with the Special Terms and Conditions. For the 2015-16 project year
only, the approval of the five-year PRIME project plans for district
and municipal public hospital systems will be considered an
appropriate metric target and will equal up to 25 percent of a
district and municipal public hospital system's annual allocation for
that year.
   (2) Amounts payable to each participating PRIME entity shall be
determined using the methodology described in the Special Terms and
Conditions, based on the participating PRIME entity's progress toward
and achievement of the established metrics and targets, as reflected
in the mid-year and yearend reports submitted pursuant to paragraph
(1) of subdivision (d).
   (A) Each participating PRIME entity shall be individually
responsible for progress toward and achievement of project specific
metric targets during the reporting period.
   (B) The amounts allocated pursuant to subparagraphs (A) and (B) of
paragraph (1) shall represent the amounts the designated public
hospital system or district and municipal public hospital, as
applicable, may earn through achievement of a designated project
metric target for the applicable year, prior to any redistribution.
   (C) Participating PRIME entities shall earn reduced payment for
partial achievement at both the mid-year and yearend reports, as
described in the Special Terms and Conditions.
   (3) If, at the end of a project year, a project metric target is
not fully met by a participating PRIME entity and that entity is not
able to fully claim funds that otherwise would have been earned for
meeting the metric target, participating PRIME entities shall have
the opportunity to earn unclaimed funds under the redistribution
methodology established under the Special Terms and Conditions.
Amounts earned by a participating PRIME entity through redistribution
shall be payable in addition to the amounts earned pursuant to
paragraph (2).
   (f) The nonfederal share of payments under the PRIME program shall
consist of voluntary intergovernmental transfers of funds provided
by designated public hospitals or affiliated governmental agencies or
entities, or district and municipal public hospitals or affiliated
governmental agencies or entities, in accordance with this section.
   (1) The Public Hospital Investment, Improvement, and Incentive
Fund, established in the State Treasury pursuant to Section 14182.4,
shall be retained during the demonstration term for purposes of
making PRIME payments to participating PRIME entities.
Notwithstanding Section 13340 of the Government Code, moneys
deposited in the Public Hospital Investment, Improvement, and
Incentive Fund shall be continuously appropriated, without regard to
fiscal years, to the department for the purposes specified in this
section. All funds derived pursuant to this section shall be
deposited in the State Treasury to the credit of the Public Hospital
Investment, Improvement, and Incentive Fund.
   (2) The Public Hospital Investment, Improvement, and Incentive
Fund shall consist of moneys that a designated public hospital or
affiliated governmental agency or entity, or a district and municipal
public hospital-affiliated governmental agency or entity, elects to
transfer to the department for deposit into the fund as a condition
of participation in the PRIME program, to the extent permitted under
Section 433.51 of Title 42 of the Code of Federal Regulations, the
Special Terms and Conditions, and any other applicable federal
Medicaid laws. Except as provided in paragraph (3), moneys derived
from these intergovernmental transfers in the Public Hospital
Investment, Improvement, and Incentive Fund shall be used as the
nonfederal share of PRIME program payments authorized under the
demonstration project. Any intergovernmental transfer of funds
provided for purposes of the PRIME program shall be made as specified
in this section. Upon providing any intergovernmental transfer of
funds, each transferring entity shall certify that the transferred
funds qualify for federal financial participation pursuant to
applicable federal Medicaid laws and the Special Terms and
Conditions, and in the form and manner as required by the department.

   (3) The department shall claim federal financial participation for
PRIME incentive payments using moneys derived from intergovernmental
transfers made pursuant to this section and deposited in the Public
Hospital Investment, Improvement, and Incentive Fund to the full
extent permitted by law. The moneys disbursed from the fund, and all
associated federal financial participation, shall be distributed only
to participating PRIME entities and the governmental agencies or
entities to which they are affiliated, as applicable. No moneys
derived from intergovernmental transfers on behalf of district and
municipal public hospitals, including any associated federal
financial participation, shall be used to fund PRIME payments to
designated public hospital systems, and likewise, no moneys derived
from intergovernmental transfers provided by designated public
hospitals or their affiliated governmental agencies or entities,
including any associated federal financial participation, shall be
used to fund PRIME payments to district and municipal public
hospitals. In the event federal financial participation is not
available with respect to a payment under this section that results
in a recoupment of funds from one or more participating PRIME
entities, the department shall return any intergovernmental transfer
fund amounts associated with the payment for which federal financial
participation is not available to the applicable transferring
entities within 14 days from the date of the associated recoupment or
other determination, as applicable.
   (4) This section shall not be construed to require a designated
public hospital, a district and municipal public hospital, or any
affiliated governmental agency or entity to participate in the PRIME
program. As a condition of participation in the PRIME program, each
designated public hospital or affiliated governmental agency or
entity, and each district and municipal public hospital-affiliated
governmental agency or entity agrees to provide intergovernmental
transfers of funds necessary to meet the nonfederal share obligation
for any PRIME payments made pursuant to this section and the Special
Terms and Conditions. Any intergovernmental transfers made pursuant
to this section shall be considered voluntary for purposes of all
federal laws.
   (g) (1) PRIME incentive payments are intended to support
designated public hospital systems in their efforts to change care
delivery and strengthen those systems' ability to participate under
an alternate payment methodology (APM). APMs shift some level of risk
to participating designated public hospital systems through
capitation and other risk-sharing agreements. Contracts entered into,
issued, or renewed between managed care plans and participating
designated public hospital systems shall include language requiring
the designated public hospital system to report on metrics to meet
quality benchmark goals and to ensure improved patient outcomes,
consistent with the Special Terms and Conditions.
   (2) In order to promote and increase the level of value-based
payments made to designated public hospital systems during the course
of the demonstration term, the department shall issue an all-plan
letter to Medi-Cal managed care plans that shall promote and
encourage positive system transformation. The department shall issue
an activities plan supporting designated public hospital system
efforts to meet those aggregate APM targets and requirements as
provided in the Special Terms and Conditions.
   (3) (A) Designated public hospital systems shall contract with at
least one Medi-Cal managed care plan in the service area where they
operate using an APM methodology by January 1, 2018. If a designated
public hospital system is unable to meet this requirement and can
demonstrate that it has made a good faith effort to contract with a
Medi-Cal managed care plan in the service area that it operates in or
a gap in contracting period occurs, the department has the
discretion to waive this requirement.
   (B) Each designated public hospital system shall report to the
department, in a format determined by the department in consultation
with the designated public hospital systems and Medi-Cal managed care
plans, a summary of the contracting arrangement the designated
public hospital system has with Medi-Cal managed care plans and the
scope of services covered under the contract.
   (C) It is the intent of the Legislature to encourage contracting
between designated public hospital systems and multiple Medi-Cal
managed care plans so that Medi-Cal members have access to medically
necessary and appropriate covered services.
   (4) Designated public hospital systems and Medi-Cal managed care
plans shall seek to strengthen their data and information sharing for
purposes of identifying and treating applicable beneficiaries,
including the timely sharing and reporting of beneficiary data,
assessment, and treatment information. Consistent with the Special
Terms and Conditions and the goals of the demonstration project, and
notwithstanding any other state law, the department shall provide
guidelines, state-level infrastructure, and other mechanisms to
support this data and information sharing.
   14184.80.  (a) Within 90 days of the effective date of the act
that added this section, the department shall amend its contract with
the external quality review organization (EQRO) currently under
contract with the department and approved by the federal Centers for
Medicare and Medicaid Services to complete an access assessment. This
one-time assessment is intended to do all of the following:
   (1) Evaluate primary, core specialty, and facility access to care
for managed care beneficiaries based on the current health plan
network adequacy requirements set forth in the Knox-Keene Health Care
Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340)
of Division 2 of the Health and Safety Code) and Medicaid managed
care contracts, as applicable.
   (2) Consider State Fair Hearing and Independent Medical Review
(IMR) decisions, and grievances and appeals or complaints data.
   (3) Report on the number of providers accepting new beneficiaries.

   (b) The department shall submit to the federal Centers for
Medicare and Medicaid Services for approval the access assessment
design no later than 180 days after approval by the federal Centers
for Medicare and Medicaid Services of the EQRO contract amendment.
   (c) The department shall establish an advisory committee that will
provide input into the structure of the access assessment. The EQRO
shall work with the department to establish the advisory committee,
which will provide input into the assessment structure, including
network adequacy requirements and metrics, that should be considered.

   (d) The advisory committee shall include one or more
representatives of each of the following stakeholders to ensure
diverse and robust input into the assessment structure and feedback
on the initial draft access assessment report:
   (1) Consumer advocacy organizations.
   (2) Provider associations.
   (3) Health plans and health plan associations.
   (4) Legislative staff.
   (e) The advisory committee shall do all of the following:
   (1) Begin to convene within 60 days of approval by the federal
Centers for Medicare and Medicaid Services of the EQRO contract
amendment.
   (2) Participate in a minimum of two meetings, including an
entrance and exit event, with all events and meetings open to the
public.
   (3) Provide all of the following:
   (A) Feedback on the access assessment structure.
   (B) An initial draft access assessment report.
   (C) Recommendations that shall be made available on the department'
s Internet Web site.
   (f) The EQRO shall produce and publish an initial draft and a
final access assessment report that includes a comparison of health
plan network adequacy compliance across different lines of business.
The report shall include recommendations in response to any systemic
network adequacy issues, if identified. The initial draft and final
report shall describe the state's current compliance with the access
and network adequacy standards set forth in the Medicaid Managed Care
proposed rule (80 FR 31097) or the finalized Part 438 of Title 42 of
the Code of Federal Regulations, if published prior to submission of
the assessment design to the federal Centers for Medicare and
Medicaid Services.
   (g) The access assessment shall do all of the following:
   (1) Measure health plan compliance with network adequacy
requirements as set forth in the Knox-Keene Health Care Service Plan
Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2
of the Health and Safety Code) and Medicaid managed care contracts,
as applicable. The assessment shall consider State Fair Hearing and
IMR decisions, and grievances and appeals or complaints data, and any
other factors as selected with input from the advisory committee.
   (2) Review encounter data, including a review of data from
subcapitated plans.
   (3) Measure health plan compliance with timely access
requirements, as set forth in the Knox-Keene Health Care Service Plan
Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division
2 of the Health and Safety Code) and Medicaid managed care contracts
using a sample of provider-level data on the soonest appointment
availability.
   (4) Review compliance with network adequacy requirements for
managed care plans, and other lines of business for primary and core
specialty care areas and facility access, as set forth in the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code) and Medicaid managed care contracts, as applicable, across the
entire health plan network.
   (5) Applicable network adequacy requirements of the proposed or
final Notice of Proposed Rulemaking, as determined under the approved
access assessment design, that are not already required under the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code) shall be reviewed and reported on against a metric range as
identified by the department and approved by the federal Centers for
Medicare and Medicaid Services in the access assessment design.
   (6) Determine health plan compliance with network adequacy through
reviewing information or data from a one-year period using validated
network data and utilize it for the time period following conclusion
of the preassessment stakeholder process but no sooner than the
second half of the 2016 calendar year in order to ensure use of the
highest quality data source available.
   (7) Measure managed care plan compliance with network adequacy
requirements within the department and managed care plan contract
service areas using the Knox-Keene Health Care Service Plan Act of
1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code) and network adequacy standards within
Medicaid managed care contracts, accounting for each of the
following:
   (A) Geographic differences, including provider shortages at the
local, state, and national levels, as applicable.
   (B) Previously approved alternate network access standards, as
provided for under the Knox-Keene Health Care Service Plan Act of
1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code) and Medicaid managed care contracts.
   (C) Access to in-network providers and out-of-network providers
separately, presented and evaluated separately, when determining
overall access to care.
   (D) The entire network of providers available to beneficiaries as
the state contractor plan level.
   (E) Other modalities used for accessing care, including
telemedicine.
   (h) The department shall post the initial draft report for a
30-day public comment period after it has incorporated the feedback
from the advisory committee. The initial draft report shall be posted
for public comment no later than 10 months after the federal Centers
for Medicare and Medicaid Services approves the assessment design.
   (i) The department shall also make publicly available the feedback
from the advisory committee at the same time it posts the initial
draft of the report.
   (j) The department shall submit the final access assessment report
to the federal Centers for Medicare and Medicaid Services no later
than 90 days after the initial draft report is posted for public
comment.
  SEC. 2.  This act shall become operative only if Assembly Bill 1568
of the 2015-16 Regular Session is enacted and takes effect on or
before January 1, 2017.
  SEC. 3.  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 changes to state-funded health care programs at
the earliest possible time, it is necessary that this act take effect
immediately.          
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