Issues

Welcome to the "State Issues" section of Children's Hospital's CAN website. Please find below a summary of the major public policy issues at the state level impacting Children's Hospital.

Hospital Provider Fee Program

In Fall 2009, Governor Schwarzenegger signed legislation enacting the Hospital Provider Fee Program. Under the plan, hospitals would be assessed a fee that would be used to secure matching federal funds to make supplemental Medi-Cal payments to hospitals and to provide the state with additional funding for children's health care coverage. The Fee Program terminates December 31, 2010. The Center for Medicare and Medicaid Services (CMS), which must be approve the Fee Program before it can be implemented, is waiting for California to enact AB 1653, which makes several technical changes to the program that were requested by CMS. The bill recently was passed by the legislature and now awaits the Governor's signature. He is expected to sign it.

Once CMS approves the Fee Program, the state Department of Health Care Services will begin collecting the “Quality Assurance Fee” and making supplemental Medi-Cal payments to hospitals. In addition to generating $2.6 billion in supplemental Medi-Cal payments to hospitals statewide, the Fee Program will also provide the state with $560 million to help pay for children’s health care coverage.

State Budget

On August 31, both the Assembly and Senate took up and voted on competing state budget proposals — the Democrat’s version and the Republican’s version. As expected, neither spending plan was able to get the required two-thirds vote needed for passage. The Republican version, in general, reflects the spending plan put forth in the Governor’s May revision proposal, including the freeze on inpatient hospital Medi-Cal rates, extension of the current 10% reduction to hospital Medi-Cal DSH funding, and increased cost sharing requirements for Medi-Cal and Healthy Family enrollees. The Democrat version rejects most of these cuts, except the Medi-Cal rate freeze. At this time, the Governor is not expected to call a special session on the budget. He has indicated that the Legislature will be able to complete work on the budget in one of the special sessions still open.

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