(a)For purposes of this section, the following terms have the following meanings:
(1)“Administrator” means the administrator as that term is used in Section 494.180(a) of Title 42 of the Code of Federal Regulations as it read on December 31, 2016.
(2)“Chief Executive Officer” means the chief executive officer as that term is used in Section 494.180(a) of Title 42 of the Code of Federal Regulations as it read on December 31, 2016.
(3)“Direct patient care services costs” means costs claimed by a chronic dialysis clinic under lines one to 10, inclusive, 12, and 14 to 21, inclusive, of the Centers for Medicare and
Medicaid Services Worksheet A of Form CMS-265-11, as it read on December 31, 2016, and similar costs as the department may identify through regulation.
(4)“Health care quality improvement costs” means costs required to maintain, access, or exchange electronic health information, support health information technologies, train nonmanagerial personnel engaged in direct patient care, and provide patient-centered education and counseling.
(A)Upon request by a chronic dialysis clinic, the department may deem other expenditures to have been made for health care quality improvements if all of the following apply:
(i)The chronic dialysis clinic shows that its expenditure was for activities or items designed to improve health quality and increase the likelihood of desired health outcomes in ways that are capable of being
objectively measured and of producing verifiable results and achievements.
(ii)The chronic dialysis clinic actually paid the cost.
(iii)The cost was spent on services offered at the chronic dialysis clinic to chronic dialysis patients.
(B)The department may permit the chronic dialysis clinic to apply a health care quality improvement cost incurred in one year proportionally over a period not to exceed five years upon a finding that the chronic dialysis clinic has demonstrated that the cost is reasonably expected to provide health care quality improvements for that period.
(5)“Payer” means the person or persons who paid or are financially responsible for payments for a treatment provided to a particular patient, and may include the patient or other
individuals, primary insurers, secondary insurers, and other entities, including Medicare and any other federal, state, county, city, or other local government payer.
(6)“Treatment” means each instance when the chronic dialysis clinic provides services to a patient for which costs are reported to the department under subparagraph (A) of paragraph (1) of subdivision (b).
(7)“Treatment revenue” means the total amount the chronic dialysis clinic collects from payers for treatments.
(b)(1)For each fiscal year starting on or after January 1, 2019, a chronic dialysis clinic shall submit to the department a report concerning the total treatment revenue of the chronic dialysis clinic for the fiscal year and the amounts and percentages of that total treatment revenue the chronic dialysis has expended
on all of the following:
(A)Direct patient care services costs.
(B)Health care quality improvements costs.
(C)Federal and state taxes, and facility license fees paid pursuant to Section 1266.
(D)All other costs.
(2)The chronic dialysis clinic shall annually submit the report required by this subdivision to the department on a schedule, in a format, and on a form prescribed by the department, provided that the chronic dialysis clinic shall submit the information no later than 150 days after the end of its fiscal year. The chief executive officer or administrator of the chronic dialysis clinic shall personally certify that he or she is satisfied, after review, that the report submitted
to the department under paragraph (1) is accurate and complete.
(c)(1)For each fiscal year starting on or after January 1, 2019, a chronic dialysis clinic shall calculate the costs described in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) and the total treatment revenue. If the costs described in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) total less than 85 percent of treatment revenue, the chronic dialysis clinic shall issue a rebate and a reduction in billed amount to payers, other than Medicare or any other federal, state, county, city, or other local government payer, on a pro rata basis, in an amount that is sufficient to result in a ratio of at least 85 percent of costs described in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) to total treatment revenue less rebates and reductions in billed amounts to payers issued in the same fiscal year, as
follows:
(A)The chronic dialysis clinic shall issue the rebate or reduction in billed amount together with interest thereon of 10 percent per annum, which shall accrue from the last day of the fiscal year to which the rebate or reduction relates.
(B)Where a rebate must be paid or an amount billed but not yet paid must be reduced pursuant to this section, and more than one payer is responsible, the clinic shall divide and distribute the total required rebate or reduction in billed amounts among the payers consistent with the payers’ relative obligations to pay for the treatment.
(C)The chronic dialysis clinic shall issue the rebate or reduction in billed amount no later than 210 days after the end of the fiscal year to which the rebate or reduction relates.
(2)For each fiscal year starting on or after January 1, 2019, a chronic dialysis clinic shall maintain and provide to the department, on a form and schedule prescribed by the department, a report of all rebates and reductions it issued under paragraph (1), including a description of each instance during the period covered by the submission when the rebate or reduction required under paragraph (1) was not timely issued in full, and the reasons and circumstances therefore. The chief executive officer or administrator of the chronic dialysis clinic shall personally certify that he or she is satisfied, after review, that all information submitted to the department under this paragraph is accurate and complete.
(d)It is the intent of the Legislature that California taxpayers not be financially responsible for implementation and enforcement of this section. In order to effectuate that intent, when calculating, assessing, and collecting
fees imposed on chronic dialysis clinics pursuant to Section 1266, the department shall take into account all costs associated with implementing and enforcing this section.