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SB-608 Medi-Cal: Hospital Quality Assurance Revenue Fund: direct grants.(2017-2018)

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Date Published: 03/28/2017 09:00 PM
SB608:v98#DOCUMENT

Amended  IN  Senate  March 28, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 608


Introduced by Senator Hernandez

February 17, 2017


An act to amend Sections 11839.21, 11839.23, 11839.25, 11839.27, 11839.28, 11839.29, 11839.30, 11839.31, 11839.32, 11839.33, and 11839.34 of the Health and Safety Code, relating to narcotic treatment programs. Section 14169.58 of the Welfare and Institutions Code, relating to Medi-Cal, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


SB 608, as amended, Hernandez. Narcotic treatment programs. Medi-Cal: Hospital Quality Assurance Revenue Fund: direct grants.
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, the Medi-Cal Hospital Reimbursement Improvement Act of 2013, subject to federal approval, imposes a hospital quality assurance fee, as specified, on certain general acute care hospitals to be deposited into the Hospital Quality Assurance Revenue Fund. Existing law provides that moneys in the Hospital Quality Assurance Revenue Fund are continuously appropriated during the first, 2nd, and subsequent program periods, as specified, and are available only for certain purposes, including, among others, paying for health care coverage for children, as specified, and making increased payments and direct grants to hospitals, as specified.
The California Constitution, pursuant to Proposition 52 as approved by voters at the November 8, 2016, statewide general election, prohibits a statute amending or adding to the provisions of the act from becoming effective unless approved by the electors, as specified, but authorizes the Legislature, by a 2/3 vote in each house of the Legislature, to amend or add provisions that further the purposes of the act. Existing law, as amended by Proposition 52, extends the operation of the Hospital Quality Assurance Revenue Fund as long as the act remains operative.
Existing law, for the first program period, sets forth the allocation of direct grant payments to designated and nondesignated public hospitals, as defined, in support of health care expenditures, to be funded by the quality assurance fee. For subsequent program periods, existing law authorizes designated and nondesignated public hospitals to be paid direct grants, as specified, upon appropriation in the annual Budget Act.
This bill would, for the 2nd program period, require that direct grants in support of health care expenditures be paid to designated public hospitals, to be funded by the quality assurance fee, with the aggregate amount of the grants being $25,250,000 in the aggregate for the 2 subject fiscal quarters in the 2016–17 subject fiscal year, as defined, $60,500,000 for the 2017–18 subject fiscal year, and $69,000,000 in the aggregate for the 2018–19 subject fiscal year. The bill would, for the 2nd program period, require that direct grants in support of health care expenditures be paid to nondesignated public hospitals, to be funded by the quality assurance fee, with the aggregate amount of the grants being $21,000,000 in the aggregate for the 2 subject fiscal quarters in the 2016–17 subject fiscal year, $44,400,000 for the 2017–18 subject fiscal year, and $46,800,000 for the 2018–19 subject fiscal year.
By expanding the use of moneys in the Hospital Quality Assurance Revenue Fund, for additional direct grants this bill would make an appropriation. By amending the provisions of the act and expanding the use of moneys in the fund, this bill would require a 2/3 vote of the Legislature.

Under existing law, the State Department of Public Health licenses and regulates laboratories performing substance abuse testing for narcotic treatment programs. The State Public Health Officer may suspend, revoke, or take other disciplinary action against a licensee who, among other things, violates any of the regulations promulgated by the department.

This bill would make technical, nonsubstantive changes to those provisions by replacing obsolete statutory references to the former State Department of Health Services and State Director of Health Services with the State Department of Public Health and the State Public Health Officer, respectively.

Vote: MAJORITY2/3   Appropriation: NOYES   Fiscal Committee: NOYES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 14169.58 of the Welfare and Institutions Code is amended to read:

14169.58.
 (a) (1) For the first program period, designated public hospitals shall be paid direct grants in support of health care expenditures, which shall not constitute Medi-Cal payments, and which shall be funded by the quality assurance fee set forth in this article. For the first program period, the aggregate amount of the grants to designated public hospitals funded by the quality assurance fee set forth in this article shall be forty-five million dollars ($45,000,000) in the aggregate for the two subject fiscal quarters in the 2013–14 subject fiscal year, ninety-three million dollars ($93,000,000) for the 2014–15 subject fiscal year, one hundred ten million five hundred thousand dollars ($110,500,000) for the 2015–16 subject fiscal year, and sixty-two million five hundred thousand dollars ($62,500,000) in the aggregate for the two subject fiscal quarters in the 2016–17 subject fiscal year.
(2) (A) Of the direct grant amounts set forth in paragraph (1), the director shall allocate twenty-four million five hundred thousand dollars ($24,500,000) in the aggregate for the two subject fiscal quarters in the 2013–14 subject fiscal year, fifty million five hundred thousand dollars ($50,500,000) for the 2014–15 subject fiscal year, sixty million five hundred thousand dollars ($60,500,000) for the 2015–16 subject fiscal year, and thirty-four million five hundred thousand dollars ($34,500,000) in the aggregate for the two subject fiscal quarters in the 2016–17 subject fiscal year among the designated public hospitals pursuant to a methodology developed in consultation with the designated public hospitals.
(B) Of the direct grant amounts set forth in subparagraph (A), the director shall distribute six million one hundred twenty-five thousand dollars ($6,125,000) for each subject fiscal quarter in the 2013–14 subject fiscal year, six million three hundred twelve thousand five hundred dollars ($6,312,500) for each subject fiscal quarter in the 2014–15 subject fiscal year, seven million five hundred sixty-two thousand five hundred dollars ($7,562,500) for each subject fiscal quarter in the 2015–16 subject fiscal year, and eight million six hundred twenty-five thousand dollars ($8,625,000) for each subject fiscal quarter in the 2016–17 subject fiscal year in accordance with the timeframes specified in subdivision (a) of Section 14169.66.
(C) Of the direct grant amounts set forth in subparagraph (A), the director shall distribute six million one hundred twenty-five thousand dollars ($6,125,000) for each subject fiscal quarter in the 2013–14 subject fiscal year, six million three hundred twelve thousand five hundred dollars ($6,312,500) for each subject fiscal quarter in the 2014–15 subject fiscal year, seven million five hundred sixty-two thousand five hundred dollars ($7,562,500) for each subject fiscal quarter in the 2015–16 subject fiscal year, and eight million six hundred twenty-five thousand dollars ($8,625,000) for each subject fiscal quarter in the 2016–17 subject fiscal year only upon 100 percent of the rate range increases being distributed to managed health care plans pursuant to subparagraph (D) for the respective subject fiscal quarter. If the rate range increases pursuant to subparagraph (D) are distributed to managed health care plans, the direct grant amounts described in this subparagraph shall be distributed to designated public hospitals no later than 30 days after the rate range increases have been distributed to managed health care plans pursuant to subparagraph (D).
(D) Of the direct grant amounts set forth in paragraph (1), twenty million five hundred thousand dollars ($20,500,000) in the aggregate for the two subject fiscal quarters in the 2013–14 subject fiscal year, forty-two million five hundred thousand dollars ($42,500,000) for the 2014–15 subject fiscal year, fifty million dollars ($50,000,000) for the 2015–16 subject fiscal year, and twenty-eight million dollars ($28,000,000) in the aggregate for the two subject fiscal quarters in the 2016–17 subject fiscal year shall be withheld from payment to the designated public hospitals by the director, and shall be used as the nonfederal share for rate range increases, as defined in paragraph (4) of subdivision (b) of Section 14301.4, to risk-based payments to managed care health plans that contract with the department to serve counties where a designated public hospital is located. The rate range increases shall apply to managed care rates for beneficiaries other than newly eligible beneficiaries, as defined in subdivision (s) of Section 17612.2, and shall enable plans to compensate hospitals for Medi-Cal health services and to support the Medi-Cal program. Each managed health care plan shall expend 100 percent of the rate range increases on hospital services within 30 days of receiving the increased payments. Rate range increases funded under this subparagraph shall be allocated among plans pursuant to a methodology developed in consultation with the hospital community.
(3) Notwithstanding any other provision of law, any amounts withheld from payment to the designated public hospitals by the director as the nonfederal share for rate range increases, including those described in subparagraph (D) of paragraph (2), shall not be considered hospital fee direct grants as defined under subdivision (k) of Section 17612.2 and shall not be included in the determination under paragraph (1) of subdivision (a) of Section 17612.3.
(b) (1) For the first program period, nondesignated public hospitals shall be paid direct grants in support of health care expenditures, which shall not constitute Medi-Cal payments, and which shall be funded by the quality assurance fee set forth in this article. For the first program period, the aggregate amount of the grants funded by the quality assurance fee set forth in this article to nondesignated public hospitals shall be twelve million five hundred thousand dollars ($12,500,000) in the aggregate for two subject fiscal quarters in the 2013–14 subject fiscal year, twenty-five million dollars ($25,000,000) for the 2014–15 subject fiscal year, thirty million dollars ($30,000,000) for the 2015–16 subject fiscal year, and seventeen million five hundred thousand dollars ($17,500,000) in the aggregate for the two subject fiscal quarters in the 2016–17 subject fiscal year.
(2) (A) Of the direct grant amounts set forth in paragraph (1), the director shall allocate two million five hundred thousand dollars ($2,500,000) in the aggregate for the two subject fiscal quarters in the 2013–14 subject fiscal year, five million dollars ($5,000,000) for the 2014–15 subject fiscal year, six million dollars ($6,000,000) for the 2015–16 subject fiscal year, and three million five hundred thousand dollars ($3,500,000) in the aggregate for the two subject fiscal quarters in the 2016–17 subject fiscal year among the nondesignated public hospitals pursuant to a methodology developed in consultation with the nondesignated public hospitals.
(B) Of the direct grant amounts set forth in paragraph (1), ten million dollars ($10,000,000) in the aggregate for the two subject fiscal quarters in the 2013–14 subject fiscal year, twenty million dollars ($20,000,000) for the 2014–15 subject fiscal year, twenty-four million dollars ($24,000,000) for the 2015–16 subject fiscal year, and fourteen million dollars ($14,000,000) in the aggregate for the two subject fiscal quarters in the 2016–17 subject fiscal year shall be withheld from payment to the nondesignated public hospitals by the director, and shall be used as the nonfederal share for rate range increases, as defined in paragraph (4) of subdivision (b) of Section 14301.4, to risk-based payments to managed care health plans that contract with the department. The rate range increases shall enable plans to compensate hospitals for Medi-Cal health services and to support the Medi-Cal program. Each managed health care plan shall expend 100 percent of the rate range increases on hospital services within 30 days of receiving the increased payments. Rate range increases funded under this subparagraph shall be allocated among plans pursuant to a methodology developed in consultation with the hospital community.
(c) If the amounts set forth in this section for rate range increases are not actually used for rate range increases as described in this section, the direct grant amounts set forth in this section that are withheld pursuant to subparagraph (D) of paragraph (2) of subdivision (a) and subparagraph (B) of paragraph (2) of subdivision (b) shall be returned to the fund subject to paragraph (4) of subdivision (l) of Section 14169.52.
(d) (1) For the second program period, designated public hospitals shall be paid direct grants in support of health care expenditures, which shall not constitute Medi-Cal payments, and which shall be funded by the quality assurance fee set forth in this article. For the second program period, the aggregate amount of the grants to designated public hospitals funded by the quality assurance fee set forth in this article shall be twenty-five million two hundred fifty thousand dollars ($25,250,000) in the aggregate for the two subject fiscal quarters in the 2016–17 subject fiscal year, sixty million five hundred thousand dollars ($60,500,000) for the 2017–18 subject fiscal year, and sixty-nine million dollars ($69,000,000) in the aggregate for the 2018–19 subject fiscal year.
(2) For the second program period, nondesignated public hospitals shall be paid direct grants in support of health care expenditures, which shall not constitute Medi-Cal payments, and which shall be funded by the quality assurance fee set forth in this article. For the second program period, the aggregate amount of the grants funded by the quality assurance fee set forth in this article to nondesignated public hospitals shall be twenty-one million dollars ($21,000,000) in the aggregate for the two subject fiscal quarters in the 2016–17 subject fiscal year, forty-four million four hundred thousand dollars ($44,400,000) for the 2017–18 subject fiscal year, and forty-six million eight hundred thousand dollars ($46,800,000) for the 2018–19 subject fiscal year.

(d)

(e) For subsequent program periods, designated public hospitals and nondesignated public hospitals may be paid direct grants pursuant to subdivision (e) of Section 14169.59 upon appropriation in the annual Budget Act.

SECTION 1.Section 11839.21 of the Health and Safety Code is amended to read:
11839.21.

The State Department of Public Health shall establish criteria for acceptable performance from those laboratories performing urinalysis or other body fluid analysis and shall not permit utilization of laboratories unable to meet an acceptable level of performance. The results of any performance evaluation of any laboratory shall immediately be made available to the local programs upon request. Nothing in this section shall prohibit body fluid analysis to be performed by a licensed narcotic treatment program upon approval of the State Department of Health Care Services.

SEC. 2.Section 11839.23 of the Health and Safety Code is amended to read:
11839.23.

The State Department of Public Health shall adopt and publish rules and regulations to be used in approving and governing the operation of laboratories engaging in the performance of tests referred to in Section 11839.24, including, but not limited to, the qualifications of the laboratory employees who perform the tests, and that the department determines are reasonably necessary to ensure the competence of the laboratories and employees to prepare, analyze, and report the results of the tests.

SEC. 3.Section 11839.25 of the Health and Safety Code is amended to read:
11839.25.

Each laboratory in this state that performs the tests described in Section 11839.24 shall be licensed by the State Public Health Officer. The laboratory, other than a laboratory operated by the state, county, city, city and county, or other public agency, or a clinical laboratory licensed pursuant to subdivision (f) of Section 1300 of the Business and Professions Code, shall, upon application for licensing, pay a fee to the State Department of Public Health in an amount to be determined by that department, which fee will reimburse the department for the costs incurred by the department in the issuance and renewal of the licenses. On or before July 1 of each year thereafter, the laboratory shall pay to the State Department of Public Health a fee, determined by the department, for the renewal of its license.

SEC. 4.Section 11839.27 of the Health and Safety Code is amended to read:
11839.27.

The State Department of Public Health shall annually publish a list of approved and licensed laboratories engaging in the performance of tests referred to in Section 11839.24.

SEC. 5.Section 11839.28 of the Health and Safety Code is amended to read:
11839.28.

Every laboratory that has been approved and for which a license has been issued shall be periodically inspected by a duly authorized representative of the State Department of Public Health. Reports of this inspection shall be prepared by the representative conducting it upon forms prepared and furnished by the State Department of Public Health and shall be filed with that department.

SEC. 6.Section 11839.29 of the Health and Safety Code is amended to read:
11839.29.

A license issued pursuant to Section 11839.25 may be suspended or revoked by the State Public Health Officer. The State Public Health Officer may refuse to issue a license to any applicant. Proceedings under this article shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the State Public Health Officer shall have the powers and duties granted in that chapter.

SEC. 7.Section 11839.30 of the Health and Safety Code is amended to read:
11839.30.

The State Public Health Officer may deny a license if any of the following apply to the applicant, or any partner, officer, or director thereof:

(a)The person fails to meet the qualifications established by the State Department of Public Health pursuant to this chapter for the issuance of the license applied for.

(b)The person was previously the holder of a license issued under this chapter, and that license has been revoked and never reissued or was suspended and the terms of the suspension have not been fulfilled.

(c)The person has committed an act involving dishonesty, fraud, or deceit, whereby another was injured or whereby the applicant has benefited.

SEC. 8.Section 11839.31 of the Health and Safety Code is amended to read:
11839.31.

The State Public Health Officer may suspend, revoke, or take other disciplinary action against a licensee as provided in this chapter, if the licensee, or a partner, officer, or director thereof, does any of the following:

(a)Violates any of the regulations promulgated by the State Department of Public Health pursuant to this article.

(b)Commits an act of dishonesty, fraud or deceit, by which another is injured or by which the licensee benefited.

(c)Misrepresents any material fact in obtaining a license.

SEC. 9.Section 11839.32 of the Health and Safety Code is amended to read:
11839.32.

The State Public Health Officer may take disciplinary action against any licensee after a hearing as provided in this article by any of the following:

(a)Imposing probation upon terms and conditions to be set forth by the State Public Health Officer.

(b)Suspending the license.

(c)Revoking the license.

SEC. 10.Section 11839.33 of the Health and Safety Code is amended to read:
11839.33.

All accusations against licensees shall be filed within three years after the act or omission alleged as the ground for disciplinary action, except with respect to an accusation alleging a violation of subdivision (c) of Section 11839.31, the accusation shall be filed within two years after the discovery by the State Department of Public Health of the alleged facts constituting the fraud or misrepresentation prohibited by that section.

SEC. 11.Section 11839.34 of the Health and Safety Code is amended to read:
11839.34.

After suspension or revocation of the license upon any of the grounds set forth in this article, the license shall not be reinstated or reissued within a period of one year after the effective date of suspension or revocation. One year after the effective date of the suspension or revocation, the State Department of Public Health may reinstate the license upon proof of compliance by the applicant with all provisions of the decision as to reinstatement.