Medi-Cal: hospitals.

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 services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law establishes the continuously appropriated Private Hospital Supplemental Fund, administered by the California Medical Assistance Commission, which consists of moneys from various sources used to fund the nonfederal share of supplemental payments to private hospitals. Existing law requires that the California Medical Assistance Commission be dissolved after June 30, 2012, and requires that, upon dissolution of the commission, all powers, duties, and responsibilities of the commission be transferred to the Director of Health Care Services. This bill, effective the first fiscal year in which reimbursement is provided to private hospitals under a specified methodology, would require the Director of Health Care Services to allocate the fund among eligible private hospitals pursuant to a methodology that is developed in consultation with the statewide associations representing children's hospitals and private DSH hospitals and that ensures, to the extent possible, the hospitals are allocated funding at the level of payments received for the 2011–12 fiscal year, taking into consideration applicable eligibility criteria. Existing law, subject to federal approval, imposes a quality assurance fee, as specified, on certain general acute care hospitals for the period of July 1, 2011, through December 31, 2013. Existing law requires the hospitals to pay the fee in 10 equal installments, as specified, and requires that the moneys collected from the quality assurance fee be deposited into the Hospital Quality Assurance Revenue Fund. Existing law, subject to federal approval, requires that the moneys in the fund be available, upon appropriation by the Legislature, only for certain purposes, including, among other things, making supplemental payments for certain services to private hospitals, increased capitation payments to Medi-Cal managed care plans, and increased payments to mental health plans. Existing law also authorizes designated and nondesignated public hospitals to be paid direct grants in support of health care expenditures funded by the quality assurance fee. Existing law, subject to federal approval of a Medicaid demonstration project, requires the department to authorize local Low Income Health Programs (LIHPs) , as defined, to provide scheduled health care services to eligible individuals, which includes the Medicaid Coverage Expansion (MCE) population, as defined. Existing law establishes the Low Income Health Program MCE Out-of-Network Emergency Care Services Fund, which consists of moneys transferred from governmental entities on a voluntary basis and from the Hospital Quality Assurance Revenue Fund in specified amounts, to 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 that are outside the LIHP coverage network for providing emergency and poststabilization services to the MCE population. Existing law provides that the provisions governing the various payments and grants shall become inoperative on September 1, 2013, if the department has not received federal approval or a specified letter that indicates likely federal approval on or before September 1, 2013. Existing law also provides that the provisions governing the various payments and grants shall remain in effect only until July 1, 2014, the date of the last payment of quality assurance fee payments, or the date of the last payment of specified payments from the department, whichever is later. This bill would modify the calculation of the quality assurance fee and the installment payment provisions, and would make changes to the calculation of the supplemental amounts paid to private hospitals for the provision of hospital inpatient services. This bill would also increase the aggregate amount of the grants to nondesignated public hospitals for each fiscal year. This bill would reduce the amount of the proceeds from the quality assurance fee that would be transferred into the Low Income Health Program MCE Out-of-Network Emergency Care Services Fund per subject fiscal year and would delete nondesignated public hospitals as recipients of moneys from that fund. This bill would authorize the department to make supplemental payments from that fund directly to the private hospitals, as an alternative to, and in lieu of, disbursing moneys from the fund to the LIHPs. This bill would instead provide that the provisions governing the various payments and grants shall become inoperative on December 1, 2013, if the department has not received federal approval or the specified letter indicating likely federal approval. This bill would extend the operative date of the provisions governing the various payments and grants to January 1, 2015, and make related changes. This bill would make other technical, nonsubstantive changes to these provisions. This bill would declare that it is to take effect immediately as an urgency statute.