California 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
At the state level, still no budget deal, however the threat of the state running out of money sometime in September is creating added urgency to the discussions.
The Budget Conference Committee has finished its work and has agreed to freeze inpatient hospital rates for 2010-11 to the rates in effect on January 1, 2010. The rate freeze would apply to both non-contract and contract hospitals. It will apply to reimbursements for inpatient hospital services provided to Medi-Cal beneficiaries between July 1, 2010, and June 30, 2011. This proposal is expected to save Medi-Cal approximately $84 million (General Fund). CHA is looking into the legality of this rate freeze. The Committee also agreed to include trailer bill language to proceed with the design of a diagnosis-related group reimbursement method under the Medi-Cal program, as in effect under the federal Medicare program. It is expected to take four years before it is fully implemented. Also, the Committee rejected proposals to reduce funding by 10 percent to DSH hospitals.
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