Bill Text: CA AB2599 | 2009-2010 | Regular Session | Chaptered
Bill Title: Medi-Cal: South Los Angeles.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Passed) 2010-09-24 - Chaptered by Secretary of State - Chapter 267, Statutes of 2010. [AB2599 Detail]
Download: California-2009-AB2599-Chaptered.html
BILL NUMBER: AB 2599 CHAPTERED
BILL TEXT
CHAPTER 267
FILED WITH SECRETARY OF STATE SEPTEMBER 24, 2010
APPROVED BY GOVERNOR SEPTEMBER 23, 2010
PASSED THE SENATE AUGUST 25, 2010
PASSED THE ASSEMBLY AUGUST 27, 2010
AMENDED IN SENATE AUGUST 20, 2010
AMENDED IN SENATE AUGUST 17, 2010
AMENDED IN ASSEMBLY JUNE 1, 2010
INTRODUCED BY Assembly Members Bass and Hall
(Coauthor: Assembly Member Fuentes)
FEBRUARY 19, 2010
An act to add Article 5.15 (commencing with Section 14165.50) to
Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, relating to Medi-Cal.
LEGISLATIVE COUNSEL'S DIGEST
AB 2599, Bass. Medi-Cal: South Los Angeles.
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
benefits. The Medi-Cal program is, in part, governed and funded by
federal Medicaid provisions.
Existing law authorizes the California Medical Assistance
Commission to negotiate selective provider contracts with eligible
hospitals to provide inpatient hospital services to Medi-Cal
beneficiaries. Existing law also provides for the provision of
inpatient and outpatient hospital services under the Medi-Cal program
on a fee-for-service basis. Existing law provides for supplemental
payments to hospitals providing Medi-Cal services in accordance with
prescribed provisions of law.
Existing law requires the County of Los Angeles, for the 2007-08,
2008-09, and 2009-10 state fiscal years, to make intergovernmental
transfers to fund the nonfederal share of increased Medi-Cal payments
to those private hospitals that serve the South Los Angeles
population formerly served by Los Angeles County Martin Luther King,
Jr.-Harbor Hospital.
This bill would enact Medi-Cal funding provisions for a new
hospital, as defined, that would be a private nonprofit entity that
would serve the population of South Los Angeles formerly served by
the Los Angeles County Martin Luther King Jr.-Harbor Hospital.
The bill would authorize the hospital to negotiate an inpatient
hospital services contract with the commission, as provided for under
existing law, and would contain provisions relating to inpatient
hospital services reimbursement if a contract is not negotiated under
these provisions.
The bill would also contain provisions relating to reimbursement
for outpatient hospital services provided by the new hospital and to
the making of supplemental payments to the new hospital.
The bill would establish various conditions for its
implementation, including the receipt of all necessary federal
approvals and the receipt of federal financial participation.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Until August 2007, the County of Los Angeles operated the Los
Angeles County Martin Luther King, Jr.-Harbor Hospital, which
provided inpatient and outpatient hospital services to the population
of South Los Angeles.
(b) During the 2007-08 Regular Session of the Legislature, the
Legislature enacted Senate Bill 474, which, among other things,
created the South Los Angeles Medical Services Preservation Fund.
Senate Bill 474 provided for the South Los Angeles Medical Services
Preservation Fund to be continuously appropriated for each of the
2007-08, 2008-09, and 2009-10 project years for the purpose of
reimbursing the county for its specified costs of meeting the health
care needs of the population formerly serviced by the Los Angeles
County Martin Luther King, Jr.-Harbor Hospital. The Legislature
anticipated that funds from the Medi-Cal Hospital/Uninsured Care
Demonstration Project, as provided under Senate Bill 474, would be
available to help fund the restoration of hospital services on the
site of the former Los Angeles County Martin Luther King, Jr.-Harbor
Hospital campus.
(c) The County of Los Angeles and the University of California are
working together to open a new hospital on the former Los Angeles
County Martin Luther King, Jr.-Harbor Hospital campus. Both entities
have approved, in principle, the key terms for opening the new
hospital under a private nonprofit entity, which include a
substantial funding commitment by the County of Los Angeles. The new
hospital will serve as a safety net provider in South Los Angeles,
treating a high volume of Medi-Cal and uninsured patients.
(d) It is contemplated that the new hospital would be located in
the seismically compliant patient tower on the campus of the former
Los Angeles County Martin Luther King, Jr.-Harbor Hospital. The
patient tower meets the requirements as an eligible project pursuant
to Section 14085.5 of the Welfare and Institutions Code.
(e) It is the intent of the Legislature that adequate and
predictable funding in support of the new hospital shall include the
continuation of funding provided to the County of Los Angeles through
the South Los Angeles Medical Services Preservation Fund as set
forth in Section 14166.25 of the Welfare and Institutions Code, or
equivalent funding under successor or modified payment systems, for
purposes related to meeting the health care needs of the population
formerly served by the Los Angeles County Martin Luther King,
Jr.-Harbor Hospital.
(f) It is the intent of the Legislature that a new private
nonprofit hospital that will serve the population of South Los
Angeles that was formerly served by the Los Angeles County Martin
Luther King, Jr.-Harbor Hospital shall not be eligible to receive
disproportionate share hospital replacement payments as provided for
in Section 14166.11 of the Welfare and Institutions Code, or
equivalent funding under successor or modified payment systems.
(g) It is the intent of the Legislature to facilitate the success
of the new hospital in providing critical health care to the South
Los Angeles population, which is dependent upon adequate and
predictable funding levels.
SEC. 2. Article 5.15 (commencing with Section 14165.50) is added
to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:
Article 5.15. Medi-Cal Funding for South Los Angeles
14165.50. (a) To facilitate the financial viability of a new
private nonprofit hospital that will serve the population of South
Los Angeles that was formerly served by the Los Angeles County Martin
Luther King, Jr.-Harbor Hospital, Medi-Cal funding shall at a
minimum be made available, as specified in this section, or pursuant
to mechanisms that provide equivalent funding under successor or
modified Medi-Cal payment systems.
(b) (1) (A) Payment for Medi-Cal inpatient hospital services
provided by the new hospital, including, but not limited to,
supplemental payments, may be negotiated under the selective provider
contracting program, as set forth in Article 2.6 (commencing with
Section 14081). The negotiations for per diem payments shall include
consideration of the new hospital's projected Medi-Cal costs for
providing the services and level of Medi-Cal reimbursement thereof,
exclusive of any supplemental payments, necessary for the financial
viability of the new hospital, and all other factors allowable under
Section 14083.
(B) Notwithstanding any other provision of law, Medi-Cal
supplemental payment for debt service costs shall be made to the new
hospital pursuant to Section 14085.5 with respect to capital projects
located at the site of the new hospital that previously were
determined eligible under Section 14085.5 based on the debt service
costs incurred by the County of Los Angeles, and if applicable, the
new hospital. Alternatively, the rate required to be paid to the new
hospital pursuant to subparagraph (A) may be increased to take into
account the amount of the supplemental payments for debt service
during the time the payments would be due. Nothing in this
subparagraph shall be construed to increase the department's
obligations set forth in paragraph (2) of subdivision (g) of Section
14085.5.
(2) Notwithstanding any other provision of law, in the event the
new hospital does not enter into a contract under the selective
provider contracting program as described in paragraph (1), all of
the following shall apply:
(A) Health facility planning area 935, or a successor health
facility planning area, that includes the area in which the new
hospital will operate, shall be opened to enable the cost-based
reimbursement methodology for Medi-Cal inpatient hospital services
set forth in the Medi-Cal state plan to apply with respect to
services provided by the new hospital.
(B) The department shall seek federal approval, as necessary, to
enable the new hospital to receive Medi-Cal supplemental payments in
addition to the cost-based reimbursement provided for in subparagraph
(A). The nonfederal share of the supplemental payments may be funded
with public funds that are transferred to the state from the County
of Los Angeles, at the county's election, pursuant to Section 14164.
(C) (i) Any public funds transferred to the state as described in
subparagraph (B) for supplemental payments to the new hospital with
respect to a fiscal period shall be expended solely for the
nonfederal share of the supplemental payments, except for an amount
that may be retained by the state for the benefit of the Medi-Cal
program negotiated between the department and the County of Los
Angeles, limited as follows:
(I) For each fiscal year before the 2017-18 fiscal year, the
retained amount shall not be more than the amount of the nonfederal
share of the reimbursement, exclusive of any supplemental payments,
for the fiscal year to be paid pursuant to the cost-based
reimbursement methodology described in subparagraph (A) that exceeds
77 percent of the new hospital's projected Medi-Cal costs.
(II) For the 2017-18 fiscal year and each subsequent fiscal year,
the retained amount shall not be more than the amount of the
nonfederal share of the reimbursement, exclusive of any supplemental
payments, for the fiscal year to be paid pursuant to the cost-based
reimbursement methodology described in subparagraph (A) that exceeds
72 percent of the new hospital's projected Medi-Cal costs.
(ii) For purposes of this subparagraph, the new hospital's
projected Medi-Cal costs shall be based on the cost finding
principles applied under subdivision (b) of Section 14166.4, and are
not subject to the reimbursement limitations set forth in Article 7.5
(commencing with Section 51536) of Chapter 3 of Subdivision 1 of
Division 3 of Title 22 of the California Code of Regulations. The new
hospital's projected Medi-Cal costs may take into account audit
adjustments to allowable costs for prior periods.
(D) Reimbursement under this paragraph shall be available to the
new hospital only if the necessary federal approval described in
subparagraph (B) is obtained. If the necessary federal approval is
not obtained, the new hospital shall be reimbursed for Medi-Cal
inpatient hospital services as set forth in paragraph (1) and the per
diem payments shall reimburse the hospital at no less than 72
percent of the hospital's projected Medi-Cal costs for providing the
services, exclusive of any supplemental payments and the payments
described in subparagraph (B) of paragraph (1).
(3) Notwithstanding any other provision of law, and only to the
extent federal approval is obtained, the new hospital shall be
reimbursed for Medi-Cal outpatient services under the cost-based
reimbursement methodology established in Section 14105.24. The
department shall seek federal approval, as necessary, to expand the
methodology to include outpatient services provided to Medi-Cal
beneficiaries by the new hospital.
(c) Nothing in this section shall be construed to preclude the new
hospital from receiving any other payment for which it is eligible
in addition to the payments provided for by this section.
(d) Notwithstanding the rulemaking provisions of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, the department may implement this section by
means of all facility letters, all county letters, or similar
instructions, without taking further regulatory action. Nothing in
this section shall be construed to preclude the department from
adopting regulations.
(e) (1) Except as otherwise provided herein, this section shall be
implemented only if, and to the extent that, federal financial
participation is available and this section does not jeopardize the
federal financial participation available for any other state
program.
(2) This section shall be implemented only if, and to the extent
that, necessary approval from the federal Centers for Medicare and
Medicaid Services is obtained.
(f) For purposes of this article, "new hospital" means a health
facility that is certified under Title XVIII and Title XIX of the
federal Social Security Act, and is licensed pursuant to Chapter 2
(commencing with Section 1250) of Division 2 of the Health and Safety
Code to provide acute inpatient hospital services, and includes all
components of the facility, with an inpatient hospital service
location on the campus of the former Los Angeles County Martin Luther
King, Jr.-Harbor Hospital.
