Medi-Cal: hospitals: quality assurance fee.

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 individuals. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law, subject to federal approval, imposes a quality assurance fee, as specified, on certain general acute care hospitals through and including June 30, 2011. Existing law creates the Hospital Quality Assurance Revenue Fund in the State Treasury and requires that the money collected from the quality assurance fee be deposited into the fund. Existing law, subject to federal approval, requires the department to make supplemental payments for certain services, as specified, to private hospitals, increased capitation payments to Medi-Cal managed health care plans, and increased payments to mental health plans. Existing law provides that the moneys in the Hospital Quality Assurance Revenue Fund shall, upon appropriation by the Legislature, be available only for certain purposes, including paying for health care coverage for children, as specified, and making the supplemental payments to hospitals, increased capitation payments to Medi-Cal managed health care plans, and increased payments to mental health plans. Existing law also establishes the continuously appropriated Distressed Hospital Fund, which consists of moneys transferred to the fund or appropriated by the Legislature and used as the nonfederal share of payments to distressed hospitals, as defined. This bill would, subject to federal approval, impose a quality assurance fee, as specified, on certain general acute care hospitals, for the period of July 1, 2011, through December 31, 2013. This bill would require that the money collected from the quality assurance fee be deposited into the Hospital Quality Assurance Revenue Fund. The bill would, subject to federal approval, provide that the moneys in the Hospital Quality Assurance Revenue Fund shall, upon appropriation by the Legislature, be available only for certain purposes, including paying for health care coverage for children, as specified, and making supplemental payments for certain services to private hospitals, increased capitation payments to Medi-Cal managed care plans, increased payments to mental health plans, and supplemental payments for out-of-network emergency and poststabilization services provided by private hospitals and nondesignated public hospitals to Medi-Cal expansion enrollees in the Low Income Health Program. This bill would also authorize designated and nondesignated public hospitals to be paid direct grants in support of health care expenditures funded by the quality assurance fee. The bill would provide that if quality assurance fee payments are remitted to the department after the date determined by the department to be the final date for calculating the final supplemental payments, the fee payments shall be retained in the fund for purposes of funding supplemental payments supported by a hospital quality assurance fee program under subsequent legislation, but provides that if supplemental payments are not implemented under subsequent legislation, then those quality assurance fee payments shall be deposited into the Distressed Hospital Fund. The bill would also provide that if amounts of the quality assurance fees are collected in excess of the funds required to make the payments above and federal rules prohibit the department from refunding the fee payments to the general acute care hospitals, the excess funds shall be deposited into the Distressed Hospital Fund. By increasing the amount of money that may be deposited into the Distressed Hospital Fund, this bill would make an appropriation. This bill would also create the Low Income Health Program MCE Out-of-Network Emergency Care Services Fund, which would consist of moneys transferred from governmental entities on a voluntary basis and from the Hospital Quality Assurance Revenue Fund in specified amounts. This bill would provide that the moneys in the fund be used by the department, upon appropriation by the Legislature, to fund the nonfederal share of supplemental payments made to private hospitals and nondesignated public hospitals providing emergency and poststabilization services to Medi-Cal expansion enrollees in the Low Income Health Program. Existing law requires the department to seek a demonstration project or federal waiver of Medicaid law to implement specified objectives, which may include better care coordination for seniors, persons with disabilities, and children with special health care needs. Existing law provides that to the extent the provisions under the Medi-Cal Hospital/Uninsured Care Demonstration Project Act do not conflict with the provisions of, or the Special Terms and Conditions of, this demonstration project, the provisions of the Medi-Cal Hospital/Uninsured Care Demonstration Project Act shall apply. Under existing law, the department is required to reduce disproportionate share hospital replacement payments to private hospitals by 10% for the 2009–10 fiscal year, as specified. Existing law also provides that, in addition to the 10% reduction, disproportionate share hospital replacement payments to private hospitals shall be reduced in the 2010–11 fiscal year by an additional $30 million in General Fund moneys and by the corresponding federal financial participation, and in the 2011–12 fiscal year by an additional $75 million in General Fund moneys and by the corresponding federal financial participation. Existing law provides that the additional room under the federal upper payment limit created by these reductions shall be used for specified purposes. This bill would, in relation to the 2010–11 and 2011–12 fiscal year reductions, delete the requirement that the reductions be in addition to the 10% reduction for the 2009–10 fiscal year. This bill would also require the department to reduce disproportionate share hospital replacement payments to private hospital payments by specified amounts in the 2012–13 and 2013–14 fiscal years. Existing law establishes the continuously appropriated Private Hospital Supplemental Fund, which consists of moneys from various sources that are used as the source of the nonfederal share of supplemental payments to private hospitals. This bill would require that the money annually transferred to this fund from the General Fund be reduced by specified amounts for the 2012–13 and 2013–14 fiscal years, and that the reductions in the payments to private hospitals that result from the reductions in the amounts transferred from the General Fund be allocated equally as specified. This bill would appropriate specified amounts from the Hospital Quality Assurance Revenue Fund, the Federal Trust Fund, and the Low Income Health Program MCE Out-of-Network Emergency Care Services Fund to the department to be available for expenditure until January 1, 2015, for specified purposes. This bill would declare that it is to take effect immediately as an urgency statute.