Today's Law As Amended

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AB-468 Medi-Cal: nondesignated public hospitals.(2013-2014)



SECTION 1.

 Section 14166.153 is added to the Welfare and Institutions Code, to read:

14166.153.
 (a) For the 2012–13 fiscal year and each fiscal year thereafter, each of the nondesignated public hospitals shall submit to the department all of the following reports:
(1) The hospital’s Medicare cost report for the project year or successor demonstration year.
(2) Other cost reporting and statistical data necessary for the determination of amounts due the hospital under the demonstration project or successor demonstration project, as requested by the department.
(b) For each project year or successor demonstration year, the reports shall identify all of the following:
(1) To the extent applicable, the costs incurred in providing inpatient hospital services to Medi-Cal beneficiaries on a fee-for-service basis and physician and nonphysician practitioner services costs.
(2) The costs incurred in providing hospital services to uninsured individuals.
(c) Each nondesignated public hospital, or governmental entity with which it is affiliated, that operates nonhospital clinics or provides physician, nonphysician practitioner, or other health care services that are not identified as hospital services under the Special Terms and Conditions for the demonstration project and successor demonstration project, shall report and certify all of the uncompensated Medi-Cal and uninsured costs of the services furnished. The amount of these uncompensated costs to be claimed by the department shall be determined by the department in consultation with the governmental entity so as to optimize the level of claimable federal Medicaid reimbursement.
(d) Reports submitted under this section shall include all allowable costs.
(e) The appropriate public official shall certify to all of the following:
(1) The accuracy of the reports required under this section.
(2) That the expenditures to meet the reported costs comply with Section 433.51 of Title 42 of the Code of Federal Regulations.
(3) That the sources of funds used to make the expenditures certified under this section do not include impermissible provider taxes or donations as defined under Section 1396b(w) of Title 42 of the United States Code or other federal funds. For this purpose, federal funds do not include delivery system reform incentive pool payments or patient care revenue received as payment for services rendered under programs such as nondesignated state health programs, the Low Income Health Program, Medicare, or Medicaid.
(f) The certification of public expenditures made pursuant to this section shall be based on a schedule established by the department in accordance with federal requirements.
(1) The director may require the nondesignated public hospitals to submit quarterly estimates of anticipated expenditures, if these estimates are necessary to obtain interim payments of federal Medicaid funds.
(2) All reported expenditures shall be subject to reconciliation to allowable costs, as determined in accordance with applicable implementing documents for the demonstration project and successor demonstration project.
(g) The director shall seek Medicaid federal financial participation for all certified public expenditures reported by the nondesignated public hospitals and recognized under the successor demonstration project.
(h) The timeframes for data submission and reporting periods may be adjusted as necessary in accordance with federal requirements.

SEC. 2.

 Section 14301.4 of the Welfare and Institutions Code is amended to read:

14301.4.
 (a) It is the intent of the Legislature, to the extent federal financial participation is not jeopardized and consistent with federal law, that the intergovernmental transfers described in this section provide support for the nonfederal share of risk-based payments to managed care health plans to enable those plans to compensate providers designated by the transferring entity for Medi-Cal health care services and for support of the Medi-Cal program.
(b) For the purposes of this section, the following definitions apply:
(1) “Intergovernmental transfer” or “IGT” means the transfer of public funds by the transferring entity to the state in accordance with the requirements of this section.
(2) “Managed care health plan” means a Medi-Cal managed care plan contracting with the department under this chapter or Article 2.7 (commencing with Section 14087.3), Article 2.8 (commencing with Section 14087.5), Article 2.81 (commencing with Section 14087.96), or Article 2.91 (commencing with Section 14089) of Chapter 7.
(3) “Public provider” means any provider that is able to certify public expenditures under state and federal Medicaid law.
(4) “Rate range increases” means increases to risk-based payments to managed care health plans to increase the payments from the lower bound of the range determined to be actuarially sound to the upper bound of that range, as determined by the department’s actuaries to take into account the variations in underwriting, risk, return on investment, and contingencies.
(5) “Transferring entity” means a public entity, which may be a city, county, special purpose district, or other governmental unit in the state, regardless of whether the unit of government is also a health care provider, except as prohibited by federal law.
(c) To the extent permitted by federal law, a transferring entity may elect to make an intergovernmental transfer to the state, and the department may accept all intergovernmental transfers from a transferring entity, for the purposes of providing support for the nonfederal share of risk-based payments to managed care health plans to enable those plans to compensate providers designated by the transferring entity for Medi-Cal health care services and for the support of the Medi-Cal program. The transferring entity shall certify to the department that the funds it proposes to transfer satisfy the requirements of this section and are in compliance with all federal rules and regulations.
(d) (1) Pursuant to paragraphs (2), (3), and (4), the state shall, upon acceptance of the IGT described in subdivision (c), assess a fee of 20 percent on each IGT subject to this section to reimburse the department for the administrative costs of operating the IGT program pursuant to this section and for the support of the Medi-Cal program.
(2) The IGTs subject to the fee shall be limited to those made by a transferring entity to provide the nonfederal share of rate range increases.
(3) The 20-percent assessment shall not apply to IGTs designated for increases to risk-based payments to managed care health plans intended to increase reimbursement for designated public providers and nondesignated public hospitals  for purposes of equaling the amount of reimbursement the public provider would have received through certified public expenditures under the fee-for-service payment methodology.
(4) The 20-percent assessment shall not apply to IGTs authorized pursuant to Sections 14168.7 and 14182.15.
(e) Participation in the intergovernmental transfers pursuant to this section is voluntary on the part of the transferring entities for the purposes of all applicable federal laws.
(f) The director shall seek any necessary federal approvals for the implementation of this section.
(g) To the extent that the director determines that the payments made pursuant to this section do not comply with the federal Medicaid requirements, the director retains the discretion to return the IGTs or not accept the IGTs.
(h) This section shall be implemented only to the extent that federal financial participation is not jeopardized.
(i) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department shall implement this section by means of policy letters or similar instructions, without taking further regulatory action.
(j) This section shall be implemented on July 1, 2011, or the date on which all necessary federal approvals have been received, whichever is later.

SEC. 3.

 Section 14301.56 is added to the Welfare and Institutions Code, to read:

14301.56.
 (a) (1) To the extent federal financial participation is not jeopardized and consistent with federal law, the department shall pay rate range increases, as defined in paragraph (4) of subdivision (b) of Section 14301.4, to Medi-Cal managed care plans that have a contract with the department under Section 14087.98, for the purposes specified in paragraph (2). If a nonfederal share is necessary to fund the rate range increases, an affiliated governmental entity may voluntarily provide intergovernmental transfers as the nonfederal share. The department shall not be required to pay rate range increases pursuant to this section if intergovernmental transfers are not received as the nonfederal share.
(2) The Medi-Cal managed care plans shall pay the rate range increases provided under this section as additional payments to nondesignated public hospitals for providing and making available services to Medi-Cal enrollees of the plan for purposes of equaling the amount of reimbursement the nondesignated public hospital would have received through certified public expenditures under the fee-for-service payment methodology.
(b) The increased payments to Medi-Cal managed care plans that would be paid consistent with actuarial certification and enrollment in the absence of this section, including, but not limited to, payments described in Section 14182.15, shall not be reduced as a consequence of payment under this section.