Medi-Cal: hospital payments: quality assurance fees.

Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services, under which basic health care services are provided to qualified low-income persons. The Medi‑Cal program is partially governed and funded as part of the federal Medicaid Program. Under existing law, the Medi-Cal Hospital/Uninsured Care Demonstration Project Act, specified hospital reimbursement methodologies are applied in order to maximize the use of federal funds consistent with federal Medicaid law and stabilize the distribution of funding for hospitals that provide care to Medi-Cal beneficiaries and uninsured patients. This bill would require the department to make supplemental payments for certain services, as specified, to private hospitals, nondesignated public hospitals, and designated public hospitals, as defined, for subject federal fiscal years, which this bill would define to mean federal fiscal years that end after the latest effective date all federal approvals or waivers necessary for the implementation of these supplemental payments and begin before December 31, 2010. This bill would also require the department to pay direct grants in support of health care expenditures to designated public hospitals for each subject federal fiscal year, as specified. This bill would require the department to make enhanced payments to managed health care plans, as defined, and would require the state to make enhanced payments to mental health plans, as defined, for each subject federal fiscal year, as specified. This bill would require the managed health care plans and mental health plans that received enhanced payments to make supplemental payments to subject hospitals, as defined, pursuant to specified formulas. This bill would provide that the above-described payments shall be made only from the quality assurance fee that is due and payable on or before December 31, 2010, and related matching federal funds. This bill would require the Director of Health Care Services to submit any state plan amendment or waiver request that may be necessary to implement the above provisions. This bill would provide for the imposition, as a condition of participation in state-funded health insurance programs, other than the Medi-Cal program, of a quality assurance fee, as specified, on certain general acute care hospitals through, and including, December 31, 2010. This bill would require the department to seek federal approval, as defined, for assessment of the fee. This bill would provide that no hospital shall be required to pay the quality assurance fee to the department unless and until the state receives and maintains federal approval of the quality assurance fee for the above-described additional payments from the federal Centers for Medicare and Medicaid Services (CMS) . The bill would require hospitals, for calendar quarters prior to federal approval of the fee, and in the calendar quarter in which the department receives notice of federal approval of the fee, to certify to the best of its knowledge, on a form provided by the department, that the hospital is prepared to pay the fee. The bill would provide that within 30 days of when federal approval is received, the hospitals shall pay the amount they certified they were prepared to pay multiplied by certain applicable fee percentages, except that, in the event that the director has made modifications to the fee model to secure federal approval, the hospital shall pay the above-described amount adjusted to reflect the director's modifications. This bill would create the Hospital Quality Assurance Revenue Fund in the State Treasury and require the money collected from the quality assurance fee be deposited into the fund. This bill would provide that the moneys in the fund shall, upon appropriation by the Legislature, be available only for certain purposes, including providing the above-described supplemental payments and health care coverage for children. This bill would require the department to provide the Joint Legislative Budget Committee and the fiscal and appropriate policy committees of the Legislature a status update of the implementation of the above-described provisions, on January 1, 2010, and quarterly thereafter. This bill would provide that the above provisions shall not be implemented with respect to the 2009–10 and 2010–11 federal fiscal years until the earlier of April 30, 2010, or the date the federal government approves a federal waiver for a demonstration that will replace the Medi-Cal Hospital/Uninsured Care Demonstration Project Act. This bill would, under specified conditions, provide that the above provisions shall become inoperative if, among other things, CMS denies approval for, or does not approve before January 1, 2012, the implementation of the above provisions. This bill would, in the event certain conditions occur, retroactively invalidate the requirements for supplemental payments or other payments made pursuant to this bill. This bill would repeal the above provisions on January 1, 2013. This bill would specify that a quality assurance fee is to be imposed pursuant to a subsequent statute, effective January 1, 2011, and subject to federal approval in a manner necessary to obtain federal matching funds, that shall be due and payable to the department by each general acute care hospital at a specified rate for the purpose of making Medi-Cal payments to hospitals.