Diagnosis-related group methodology.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law requires the department, subject to federal approval, to develop and implement a payment methodology based on diagnosis-related groups that reflects that costs and staffing levels associated with quality of care for patients in all general acute care hospitals, as specified. Existing law requires that the methodology developed pursuant to these provisions be implemented on July 1, 2012, or on the date upon which the director executes a declaration certifying that all necessary federal approvals have been obtained and the methodology is sufficient for formal implementation, whichever is later. This bill would require the department, before the diagnosis-related group methodology can be implemented, to develop a methodology, in consultation with the hospital community, for hospitals to review base payment rates proposed by the department. The bill would require the department, commencing July 1, 2013, to begin collecting diagnosis codes and procedure codes to establish a database from which to develop base payment rates and would require the department to develop an education and training program for hospital Medi-Cal billing staff, in consultation with the hospital community, to be conducted between April 1, 2014, and May 13, 2014. This bill would declare that it is to take effect immediately as an urgency statute.