SB 608: 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 201617 subject fiscal year, as defined, $60,500,000 for the 201718 subject fiscal year, and $69,000,000 in the aggregate for the 201819 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 201617 subject fiscal year, $44,400,000 for the 201718 subject fiscal year, and $46,800,000 for the 201819 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.