The administration of this chapter shall be carried out by the same agents as are authorized by the several boards of supervisors to administer the public assistance programs.

For purposes of administering this chapter and Chapter 8 (commencing with Section 14200) of this part, the director shall have those powers and duties necessary to conform to requirements for securing approval of a state plan under the provisions of the applicable federal law, and the department shall be the single state agency for purposes of Title XIX of the federal Social Security Act.

directly connected with the administration of the Medi-Cal program. However, in the context of a petition for the appointment of a conservator for a person with respect to whom this information is made or kept, and in the context of a criminal prosecution for a violation of Section 368 of Penal Code with respect to such a person, all of the following shall apply:

A public officer or employee of any such agency may answer truthfully, at any proceeding related to the petition or prosecution, when asked if he or she is aware of information that he or she believes is related to the legal mental capacity of that aid recipient or the need for a conservatorship for that aid recipient. If the officer or employee states that he or she is aware of this information, the court may order the officer or employee to testify about his or her observations and to disclose any relevant agency records if the court has an other independent reason to believe that the officer or employee

has information that would facilitate the resolution of the matter.

not limited to: establishing eligibility and methods of reimbursement; determining the amount of medical assistance; providing services for recipients; conducting or assisting an investigation, prosecution, or civil or criminal proceeding related to the administration of the Medi-Cal program; and conducting or assisting a legislative investigation or audit related to the administration of the Medi-Cal program.

auditing the administration of the Medi-Cal program, Chapter 8 (commencing with Section 14200), or Chapter 8.7 (commencing with Section 14520), and shall not use that information for commercial or political purposes. In any case where disclosure of information is authorized by this section, the Joint Legislative Audit Committee or the State Auditor shall not disclose the identity of any applicant or recipient, except in the case of a criminal or civil proceeding conducted in connection with the administration of the Medi-Cal program.

pertaining to the administration of the laws relating to the Medi-Cal program, Chapter 8 (commencing with Section 14200), or Chapter 8.7 (commencing with Section 14520). The rules and regulations shall be binding on all departments, officials, and employees of the state, or of any political subdivision of the state and may provide for giving information to or exchanging information with agencies, public, or political subdivisions of the state, and may provide for giving information to or exchanging information with agencies, public or private, which are engaged in planning, providing, or securing such services for or in behalf of recipients or applicants; and for making case records available for research purposes, provided that that research will not result in the disclosure of the identity of applicants for or recipients of those services.

(commencing with Section 14081) all computer tapes and any modifications thereto, including paid claims, connected with the administration of the Medi-Cal program which are in the possession or under the control of the department, including tapes prepared prior to the effective date of this section.

To ensure compliance with federal law and regulations, the department shall make the minimum necessary modifications to its computer tapes prior to releasing the tapes to the negotiator in order to assure the confidentiality of the identity of all applicants for, or recipients of, those services. The department shall not make any modifications to paid claims tapes that affect information regarding beneficiaries’ aid categories or counties of origin.

Medi-Cal benefits or benefits under Chapter 8 (commencing with Section 14200) or Chapter 8.7 (commencing with Section 14520) for which state or federal funds are made available in violation of this section is guilty of a misdemeanor.

(A) To the extent permitted by federal law, exercise its option under Section 1396a(a)(7)(B) of Title 42 of the United States Code, in coordination with the State Department of Education, to exchange the information necessary to perform direct verification of the eligibility of children for free or reduced price meals.

(B) To the extent permitted by federal law, in coordination with the State Department of Education,

exchange the information necessary to perform direct certification for enrolling children to receive free or reduced price meals.

CMS.

(A) Purchase of medical care and services.

(B) County and other local assistance administration.

(C) Rate increases.

cost and other data or information needed to support the estimate.

and projected workload and expenditures in a format which will permit evaluation of forecasts. Unallocated funds and funds for special projects or special problems shall be separately identified.

in subdivision (a) available to the public, the department shall post this information on its Internet Web site.

The department, in cooperation with the Controller, shall establish a method of providing to the Controller, periodically, updated information regarding changes in the roster of Medi-Cal providers.

exemption from the requirements of subdivision (a).

estimated billings, and shall not be less than twenty-five thousand dollars ($25,000).

participation among providers who are subject to the requirement of subdivision (a) to determine if the requirement is a deterrent to Medi-Cal program participation among provider applicants.

Professional Corporation Act provided for pursuant to Part 4 (commencing with Section 13400) of Division 3 of Title 1 of the Corporations Code.

as amended, and that is enrolled as a provider in the Medi-Cal program. In the event of inconsistent requirements between the medicaid and Medicare programs, medicaid requirements shall take precedence.

the effective date of the regulation.

to participate in the medicaid or Medicare program, each provider of durable medical equipment shall obtain, and thereafter maintain, a surety bond meeting the requirements of the final federal regulation, as amended, as a condition of participation in the Medi-Cal program.

The director may contract with other state agencies for services in connection with the administration of this chapter, Chapter 8 (commencing with Section 14200), Chapter 8.5 (commencing with Section 14500), and Chapter 8.7 (commencing with Section 14520) of this part.

The department shall enter into an agreement with the Secretary of Health, Education and Welfare under which such secretary will determine eligibility for Medi-Cal in the case of aged, blind or disabled persons under this state’s medical assistance plan approved under Title XIX of the Social Security Act. The state shall pay the Secretary of Health, Education and Welfare an amount equal to one-half of the cost of carrying out the agreement, but in computing such cost with respect to individuals eligible for benefits under Title XVI of the Social Security Act, such payment shall include only those costs which are additional to the costs incurred in carrying out such

title.

The department and the State Department of Social Services shall provide to the other any information necessary for the performance of such department’s duties under this chapter.

The Workers’ Compensation Appeals Board and the department shall exchange information and cooperate to assure that health services provided by Medi-Cal which are reimbursable by Workers’ Compensation are identified, and that Workers’ Compensation reimburses the department for those services.

applicable federal approval.

to be derived from, as appropriate depending on the data element, CalHEERS, MEDS, or the Statewide Automated Welfare System:

number of eligibility determinations that resulted in an approval for coverage.

(ii) The program or programs for which the individuals in clause (i) were determined eligible.

(iii) The number of applications that were denied for any coverage and the reason or reasons for the denials.

(E) The number of days for eligibility determinations to be completed.

of ineligibility.

Chairpersons of the Senate and Assembly Health Committees and the Chairperson of the Joint Legislative Budget Committee.

amendments.

Whenever the director determines that the services or products of a provider cost the program in excess of reasonable value received, the provider shall thereafter be disqualified from participation in the program. The disqualification shall not become effective until an opportunity for a public hearing has been granted.

The department shall conduct a continuing review of reimbursements to all hospitals participating in the program in order to determine if any reimbursements are in excess of reasonable value

received.

The director, with the advice of the Medicaid Advisory Committee required by federal law or regulation, shall determine which of the health care and related remedial or preventive services are elective. The director and the committee shall consult with representatives of providers of such services before making a determination.

the nature of the emergency or life threatening situation, including relevant clinical information about the patient’s condition.

immediate diagnosis and treatment of unforeseen medical conditions which, if not immediately diagnosed and treated, could lead to significant disability or death.

The department shall develop procedure codes for durable medical equipment and orthotic and prosthetic equipment and services, to enable the fiscal intermediary to efficiently and expeditiously process claims for the equipment or services.

For the purposes of this section, durable medical equipment, orthotics, and prosthetics shall include such equipment and accessories as the director may provide by regulation, as authorized by this chapter.

Prior authorization may be required by the director for services or items prescribed or ordered by a practitioner who has been determined by the director to have been prescribing or ordering medically unnecessary or excessive services or items for Medi-Cal beneficiaries. When this requirement has been imposed upon a practitioner, the department shall give written notice to the practitioner, and shall also give written notice identifying the practitioner to all Medi-Cal providers who may be requested by that practitioner to furnish ordered or prescribed services or items. Payment may not be denied for services or items provided pursuant to an order or

prescription issued by these practitioners prior to written notification by the department that these services or items must have prior authorization. After this notice has been received, it shall be the duty of the practitioner to seek prior authorization for all ordered or prescribed services or items within the scope of the director’s requirement. Where a practitioner fails to obtain prior authorization for a service or item within the scope of the director’s requirement and the service or item is provided or dispensed to a beneficiary by another provider, the prescribing practitioner shall be financially responsible for payment. The department shall not deny payment to the provider for the prescribing practitioner’s failure to obtain prior authorization, but shall reimburse the provider as otherwise provided by law and recover the payment from the prescribing practitioner.

review under the California Children’s Services Act prior to submission to the Medi-Cal fiscal intermediary.

review of services provided to beneficiaries whose health care is funded solely from state or local sources without federal participation under Title XIX of the Social Security Act.

contractor:

submitted to the contractor and under the contractor’s control, as set forth in the request for proposal, shall be processed and paid in 30 days and 99 percent of all claims submitted to the contractor and under the contractor’s control, as set forth in the request for proposal, shall be processed and paid in 90 days. If it is determined by the contractor that additional evidence of validity is required, the evidence shall be requested within 18 days from the date the bill is received by the contractor. In any event, notice shall be given within 30 days from the date the bill is received concerning the status of the bill submitted if the bill is held for peer review by the contractor beyond 18 days. In no event, shall the number of bills not processed for payment within 30 days of receipt exceed 9 percent of the total bills inventory.

contract, the director shall publish notice soliciting bids.

identified by the department.

provider claims processing.

necessary approvals from the federal Centers for Medicare and Medicaid Services to implement this section. The department shall implement this section only in a manner that is consistent with federal Medicaid law and regulations, and only to the extent that the necessary approvals are obtained and federal financial participation is not jeopardized.

Notwithstanding any other provision of law, the director shall by regulation adopt such procedures as are necessary for the review of a grievance or complaint concerning the processing or payment of money alleged by a provider of services to be payable by reason of any of the provisions of this chapter. After complying with these procedures, if the provider is not satisfied with the director's decision on his or her

claim, he or she may not later than one year after receiving notice of the decision, file a petition for writ of mandate pursuant to Section 1085 of the Code of Civil Procedure in the superior court. This section shall be the exclusive remedy available to the provider of services for moneys alleged to be payable by reason of this chapter.

This section shall not apply to those grievances or complaints arising from the findings of an audit or examination made by or on behalf of the director pursuant to Sections 10722 and 14170. Article 5.3 (commencing with Section 14170) shall govern the grievances or complaints.

No Medi-Cal fiscal intermediary contract shall be approved, renewed or continued if a state employee is employed in a management, consultant or technical position by the contractor or a subcontractor to the contractor within one year after the state employee terminated state employment.

For purposes of this section, “state employee” means any appointive or civil service employee of the Governor’s office, the Health and Welfare Agency, the State Department of Health Services, the Controller’s office, the Attorney

General, or the Legislature who, within two years prior to leaving state employment, had responsibilities related to development, negotiation, contract management, supervision, technical assistance or audit of a Medi-Cal fiscal intermediary.

The requirements of this section shall not apply to any state employee who terminated state employment prior to the operative date of this section.

The Director of the Department of Health Services shall negotiate a modification of the contract with Computer Sciences Corporation for the provision of fiscal intermediary services for the Medi-Cal program in effect on the effective date of this section to establish providers of durable medical equipment, prosthetic and orthotic devices, and emergency and nonemergency medical transportation as a distinct and separate provider classification for claim processing purposes. The director shall determine which providers qualify as providers for the purposes of this section. The contract shall be further amended to provide that claims of this type shall be

processed for payment within an average of 25 days from the date of receipt. If the contractor fails to process such claims within the 25-day standard, the department shall assess maximum liquidated damages against the contractor, per day, until the performance standard is met.

to acquire the system produced by Computer Sciences Corporation for the purposes of monitoring the contract awarded by the department to Computer Sciences Corporation and ascertaining if the system meets contract requirements.

services for a period of five years from the date of the contract.

based upon findings and recommendations produced under subdivision (d).

Any Medi-Cal contract for fiscal intermediary services entered into on or after January 1, 1992, shall permit the submission of all paper claims for hospital services using billing forms that are as similar as possible to the UB-82, also known as the HCFA-1450. These billing forms shall be designed to be both optically scanned and automatically microfilmed.

for one year from the date of posting.

The policies and regulations shall include rates for payment for services not rendered under a contract pursuant to Chapter 8 (commencing with Section 14200). In order to implement expeditiously the budgeting

decisions of the Legislature, the director shall, to the extent permitted by federal law, adopt regulations setting rates that reflect these budgeting decisions within one month after the enactment of the Budget Act and of any other appropriation that changes the level of funding for Medi-Cal services. The proposed regulations shall be submitted to the Department of Finance no later than five days prior to the date of adoption. With the written approval of the Department of Finance, the director shall adopt the regulations as emergency regulations in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Part 1, Division 3, Title 2 of the Government Code). For purposes of that act, the adoption of these regulations shall be deemed an emergency and necessary for the immediate preservation of the public peace, health, and safety or general welfare.

consistent with the efficient and economical administration of this part, the department shall afford recipients of public assistance a choice of managed care arrangements under which they shall receive health care benefits and a choice of primary care providers under each managed care arrangement.

the primary care provider.

of Title 2 of the Government Code. For the purposes of the Administrative Procedure Act, the adoption of the regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare. These regulations shall become effective immediately upon filing with the Secretary of State.

reimbursement provided for any of those services prior to the operative date of this subdivision. The director may exclude emergency surgical services performed in the emergency department of a general acute care hospital. To be excluded, emergency surgical services must be performed by an emergency room physician or a physician on the emergency department’s on-call list.

July 1, 1993, and June 30, 1995.

On or after July 1, 1995, those facilities shall submit the copies to the department on the date that the Medicare cost reports are submitted to the Medicare fiscal intermediary.

the department’s compliance with federal medicaid law or regulations relating to the adoption of Medi-Cal reimbursement rates.

implement subdivision (a). These regulations shall be adopted as emergency regulations in accordance with the rulemaking provisions of the Administrative Procedure Act, Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. For purposes of this section, the adoption of regulations shall be deemed an emergency and necessary for the immediate preservation of the public peace, health, and safety or general welfare.

necessary federal approvals for the implementation of this section. This section shall be implemented only to the extent that federal approval is obtained.

cutting enrollment standards or benefits during times of economic crisis, it is crucial to find areas within the program where reimbursement levels are higher than required under the standard provided in Section 1902(a)(30)(A) of the federal Social Security Act and can be reduced in accordance with federal law.

Care Services has unique expertise that can inform decisions that set or adjust reimbursement methodologies and levels consistent with the requirements of federal law.

for the developmentally disabled, licensed pursuant to subdivision (e), (g), or (h) of Section 1250 of the Health and Safety Code, and facilities providing continuous skilled nursing care to developmentally disabled individuals pursuant to the pilot project established by Section 14132.20, as determined by the applicable methodology for setting reimbursement rates for these facilities, shall not exceed the reimbursement rates that were applicable to those providers in the 2008–09 rate year, reduced by 10 percent.

with subdivision (d).

care health plans that contract with the department pursuant to this chapter and Chapter 8 (commencing with Section 14200), except for contracts with the Senior Care Action Network and AIDS Healthcare Foundation, and to the extent that these services are provided through any of those contracts, payments shall be reduced by the actuarial equivalent amount of the reduced provider reimbursements specified in subdivision (c) pursuant to contract amendments or change orders effective on July 1, 2011, or thereafter.

applicable to the reimbursement methodology associated with the type of facility.

cost of complying with new state or federal mandates.

and for each rate year thereafter, the reimbursement rate established for an intermediate care facility for the developmentally disabled or a facility providing continuous skilled nursing care to developmentally disabled individuals pursuant to Section 14132.20 shall be the greater of that facility’s reimbursement rate established pursuant to paragraphs (1) and (2), or the approved Medi-Cal State Plan reimbursement rate, inclusive of the temporary increased Medicaid payments associated with the COVID-19 Public Health Emergency, plus the Proposition 56 supplemental payment amount, in effect for that facility on the last day of the COVID-19 Public Health Emergency.

developmentally disabled and facilities providing continuous skilled nursing care to developmentally disabled individuals, pursuant to Section 14132.20.

modify any methodology or provision specified in this section to the extent it deems necessary to meet the requirements of federal law or regulations, to obtain or maintain federal approval, or to ensure federal financial participation is available or is not otherwise jeopardized, only if that modification does not violate the spirit, purposes, and intent of this section.

radiology services shall not exceed 80 percent of the lowest maximum allowance established under the federal Medicare Program for the same or similar services with dates of service on or after October 1, 2010.

implement that rate and may revise the rate as necessary to comply with the federal Medicaid requirements.

Notwithstanding any other provision of law, if subdivision (b) of Section 3.94 of the Budget Act of 2011 is operative, effective on or after January 1, 2012, the payment reductions in Sections 14105.07, 14105.192, 14126.033, 14131.05, and 14131.07 shall apply to managed care health plans that contract with the department pursuant to Chapter 8.75 (commencing with Section 14591) and to contracts with the Senior Care Action

Network and AIDS Healthcare Foundation, to the extent that the services are provided through any of these contracts, payments shall be reduced by the actuarial equivalent amount of the payment reductions pursuant to contract amendments or change orders effective on July 1, 2011, or thereafter.

on October 1, 1981, or as shortly thereafter as reasonably possible and consistent with federal law, to accomplish a rate of payment increase to hospitals for inpatient services for the period of July 1, 1981 to June 30, 1982, which is consistent with the provisions of this section.

department by an acute care hospital.

subdivision (a) that would otherwise be reimbursable to the department by that acute care hospital.

subdivision.

2 of the Health and Safety Code shall satisfy all of the following requirements:

on a shift basis.

may control or freeze charges in order to carry out this section.

hospitals are pending. Collection of overpayments shall be made in accordance with Section 14172.5.

less.

home infusion supplies and services with respect to all of the following:

11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500), of Part 1 of Division 3 of Title 2 of the Government Code), and shall not be subject to the review and approval of the Office of Administrative Law.

covered outpatient services rendered to Medi-Cal eligible persons.

expenses under Title XIX of the federal Social Security Act (Subchapter 19 (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code). If federal approval is not obtained for implementation of this section, this section shall become inoperative.

the Office of Administrative Law for filing with the Secretary of State and publication in the California Code of Regulations, and shall remain in effect for no more than 180 days. If the department adopts emergency regulations pursuant to this section, the department shall seek prior input from representatives of the hospital industry, including the California Healthcare Association.

Section 12693.26 of the Insurance Code.

Section 14132.

instructions, without taking regulatory action.

benefits for dates of service on and after July 1, 2008, through and including dates of service on February 28, 2009.

of Title 42 of the United States Code.

established by Section 14495.10.

assistance contracts and interagency agreements to the extent the funding is not included in the funds appropriated to the department in the annual Budget Act.

services rendered by any provider who may be authorized to bill for the service, including, but not limited to, physicians, podiatrists, nurse practitioners, certified nurse-midwives, nurse anesthetists, and organized outpatient clinics.

department shall promptly seek any necessary federal approvals for the implementation of this section.

fee-for-service benefits for dates of service on and after March 1, 2009.

fee-for-service payments to pharmacies shall be reduced by 5 percent.

payments to hospitals that are not under contract with the State Department of Health Care Services pursuant to Article 2.6 (commencing with Section 14081) for inpatient hospital services provided to Medi-Cal beneficiaries and that are subject to Section 14166.245 shall be governed by that section.

U.S.C. Sec. 1315(a)).

Closure of Agnews Developmental Center.

including, but not limited to, physicians, podiatrists, nurse practitioners, certified nurse midwives, nurse anesthetists, and organized outpatient clinics.

rate year:

of Division 3 of Title 2 of the Government Code, the department may implement and administer this section by means of provider bulletins, or similar instructions, without taking regulatory action.

reimbursement levels can be reduced consistent with the standard provided in Section 1902(a)(30)(A) of the federal Social Security Act and consistent with federal and state law and policies, including exemptions contained in the act that added this section, provided that the reductions in reimbursement shall not exceed 10 percent on an aggregate basis for all providers, services, and products.

with Section 14200), except contracts with Senior Care Action Network and AIDS Healthcare Foundation, payments shall be reduced by the actuarial equivalent amount of the payment reductions specified in this section pursuant to contract amendments or change orders effective on July 1, 2011, or thereafter.

one or more categories of Medi-Cal providers, or for one or more products or services rendered, or any combination thereof, if the resulting reductions to any category of Medi-Cal providers, in the aggregate, total no more than 10 percent.

both of the following apply:

(ii) If Section 14105.07 is added to the Welfare and Institutions Code during the 2011–12 Regular Session of the Legislature, then for dates of service on and after June 1, 2011, payments to intermediate care facilities for the developmentally disabled licensed pursuant to subdivision (e), (g), or (h) of Section 1250 of the Health and Safety Code, and facilities providing continuous skilled nursing care to developmentally disabled individuals pursuant to the pilot project established by Section 14132.20, shall be governed by the applicable methodology for setting reimbursement rates for these facilities and by Section 14105.07.

vendor for the purposes of implementing this section on a bid or nonbid basis. In order to achieve maximum cost savings, the Legislature declares that an expedited process for contracts under this subdivision is necessary. Therefore, contracts entered into to implement this section and all contract amendments and change orders shall be exempt from Chapter 2 (commencing with Section 10290) of Part 2 Division 2 of the Public Contract Code.

qualified health center status pursuant to a waiver pursuant to subsection (a) of Section 1115 of the federal Social Security Act (42 U.S.C. Sec. 1315(a)).

described in paragraph (3) of subdivision (d) only to the extent that they are also exempt from reduction pursuant to subdivision (l).

dates of service on or after July 1, 2015, or the effective date of any necessary federal approvals as required by subdivisions (n) and (o), whichever is later, dental services and applicable ancillary services.

Title 22 of the California Code of Regulations.

as described in Section 51147 of Title 22 of the California Code of Regulations.

(AA) Portable imaging services, as described in Section 51193.1 of Title 22 of the California Code of Regulations.

(AB) The following primary care or specialty clinics, as determined by the department:

(ii) Free clinics, as defined in Section 1204 of the Health and Safety Code.

(iii) Surgical clinics, as defined in Section 1204 of the Health and Safety Code.

(iv) Rehabilitation clinics, as defined in Section 1204 of the Health and Safety Code.

Section 1206 of the Health and Safety Code, including nonhospital county-operated community clinics.

(AC) Services provided under the California Children’s Services Program, established pursuant to Article 5 (commencing with Section 123845) of Chapter 3 of Part 2 of Division 106 of the Health and Safety Code, and under the Genetically Handicapped Persons Program, established pursuant to Article 1 (commencing with Section 125125) of Chapter 2 of Part 5 of Division 106 of the Health and Safety Code, as determined by the department.

(AD) Community-Based Adult Services (CBAS), as described in Section 14186.3 and as covered pursuant to subdivision (e) of Section 14184.201.

(o), whichever is later, both of the following providers:

services as described in Section 14132.24.

(ii) Abortion services, as defined in subdivision (d) of Section 14124.161, subject to reimbursement pursuant to Section 14124.165.

(B) If the voters approve the addition of Chapter 7.5 (commencing with Section 14199.100) to this part at the November 5, 2024, statewide general election, this paragraph shall be inoperative as of January 1, 2025.

described in subdivision (f) of Section 14105.191, reduced by 10 percent:

the same meaning as defined in Section 51215.5 of Title 22 of the California Code of Regulations.

instructions, without taking regulatory action.

whether the payments comply with applicable federal Medicaid program requirements, including those set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code.

shall not be implemented until federal approval is obtained.

provider bulletins or similar instructions, pursuant to subdivision (k).

complying with new state or federal mandates.

Fund expenses for reimbursement to pediatric subacute care units for dates of service on and after June 1, 2011.

11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement and administer this section by means of provider bulletins, or similar instructions, without taking regulatory action.

determines that the payments do not comply with the federal Medicaid requirements or that federal financial participation is not available with respect to any payment that is reduced pursuant to this section, the director retains the discretion not to implement the particular payment reduction or adjustment and may adjust the payment as necessary to comply with federal Medicaid requirements.

2021–22 fiscal year, and for each fiscal year thereafter, the reimbursement rates for freestanding pediatric subacute care units shall account for, and be inclusive of, supplemental payments, as described under the California Healthcare, Research and Prevention Tobacco Tax Act of 2016, or Proposition 56, if the Budget Act of that fiscal year appropriates funds from the Healthcare Treatment Fund, as established pursuant to subdivision (a) of Section 30130.55 of the Revenue and Taxation Code, to the department to make those supplemental payments to the freestanding pediatric subacute care units.

temporary Medicaid payments.

participation is available and is not otherwise jeopardized.

determines that a modification is necessary pursuant to paragraph (1), the department shall consult with affected providers and stakeholders to the extent practicable.

reimbursement for these facilities pursuant to Sections 14105.191 and 14105.192 for dates of service on or after June 1, 2011, and on or before September 30, 2013.

Taxation Code:

part, by means of provider bulletins or other similar instructions, without taking any further regulatory action.

equity for Medi-Cal beneficiaries and promote provider participation in the Medi-Cal program.

assessment and construction.

at the November 8, 2016, statewide general election) that were implemented with funds from the Healthcare Treatment Fund, as established pursuant to subdivision (a) of Section 30130.55 of the Revenue and Taxation Code, in effect as of December 31, 2023, as determined by the department:

(A) Primary care services, including those provided by physicians or nonphysician health professionals, as defined in Section 51170.5 of Title 22 of the California Code of Regulations.

(B) Obstetric care services, and doula services as described in Section 14132.24.

(C) Outpatient mental health services that are not the financial responsibility of county mental health plans operating pursuant to Chapter 8.9 (commencing with Section 14700).

annually review and revise the reimbursement rates in accordance with paragraph (1) based on changes to the lowest maximum allowance established by the federal Medicare Program for the same or similar services. Any revisions to the reimbursement rates determined in accordance with paragraph (1) shall be considered as part of the annual budget development process and take effect beginning on January 1, 2025, and each subsequent January 1 thereafter, of the calendar year following the department’s annual review.

(B) Medi-Cal managed care plans that reimburse a network provider furnishing the services identified in subparagraphs (A) to (C), inclusive, of paragraph (1) of subdivision (a) on a capitated basis shall ensure that the network provider receives reimbursement that is equal to, or projected to be equal to, the level of reimbursement required in subparagraph (A) for the applicable services and, as applicable, shall increase reimbursement to the network provider to

comply with this subparagraph.

Taxation Code.

section.

the department shall consider provider related costs of the product that include, but are not limited to, shipping, handling, storage, and delivery.

Notwithstanding the provisions of the Administrative Procedure Act, Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of the Government Code, actions under this section shall not be subject to the rulemaking provisions of the Administrative Procedure Act or to the review and approval of the Office of Administrative Law.

laboratories or laboratory services pursuant to this subdivision.

2022, 80 percent of the lowest maximum allowance established by the federal Medicare program for the same or similar services.

(ii) For dates of service on or after July 1, 2022, 100 percent of the lowest maximum allowance established by the federal Medicare program for the same or similar services.

of the California Code of Regulations, for dates of service on and after July 1, 2012. The payment reductions pursuant to this paragraph shall continue until the new rate methodology under this subdivision has been approved

by the federal Centers for Medicare and Medicaid Services.

(ii) For purposes of clause (i), “reporting year” means 2019 and

every third year thereafter.

(B) A data report submitted pursuant to subparagraph (A) shall specify the provider’s lowest amounts other payers are paying, including other state Medicaid programs and private insurance, minus discounts and rebates. The specific data required for submission under this subparagraph and the format for the data submission shall be determined and specified by the department after receiving stakeholder input pursuant to paragraph (7).

(C) The data submitted pursuant to subparagraph (A) may be used to determine reimbursement rates by procedure code based on an average of the lowest amount other payers are paying providers for similar clinical laboratory or laboratory services, excluding significant deviations of cost or volume factors and with consideration

to geographical areas. The department shall have the discretion to determine the specific methodology and factors used in the development of the lowest average amount under this subparagraph to ensure compliance with federal Medicaid law and regulations as specified in paragraph (9).

(D) For purposes of subparagraph (C), the department may contract with a vendor for the purposes of collecting payment data reports from clinical laboratories, analyzing payment information, and calculating a proposed rate.

(E) The proposed rates calculated by the vendor, as described in subparagraph (D), may be used in determining the lowest reimbursement rate for clinical laboratories or laboratory services in accordance with paragraph (3).

(F) Data

reports submitted to the department shall be certified by the provider’s certified financial officer or an authorized individual.

(G) Clinical laboratory providers that fail to submit data reports within 30 working days from the time requested by the department shall be subject to the suspension standards of subdivisions (a) and (c) of Section 14123.

participation is available, the director shall determine whether the rates and payments comply with applicable federal Medicaid requirements, including those set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code.

Notwithstanding Section 51501(a) of Title 22 of the California Code of Regulations, donation of, or discounts for, clinical laboratory tests or examinations or laboratory services to a federally qualified health center, as defined in Section 1396d(l)(2)(B) of Title 42 of the United States Code, for the purpose of serving its uninsured patients, shall not be considered as a basis for the reduction of Medi-Cal payments below the reimbursement rate established pursuant to Section

14105.22.

14105.22 for dates of service from January 1, 2020, to June 30, 2021, inclusive. Any overpayments for clinical laboratory or laboratory services resulting from the reductions implemented pursuant to Section 14105.192 shall continue to be recouped.

(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this section, in whole or in part, by means of provider bulletins or notices, policy letters, or other similar instructions, without taking any further regulatory action.

Division 3 of Title 2 of the Government Code, the director may establish the rates of reimbursement for the services described in subdivision (a) by means of a provider bulletin or manual, or similar instructions.

methodology on and after July 1, 2005.

outlined in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations. In the event of a conflict between the provisions of Part 405 and Part 413, the provisions of Part 405 shall govern.

on the effective date established by the federal Centers for Medicare and Medicaid Services for an amendment to the California Medicaid State Plan that approves the cost-based reimbursement methodology for the clinics and hospitals described in subdivision (b).

Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement and administer the cost-based rates of reimbursement described in this section by means of provider bulletins or manuals, or similar instructions.

the rate of reimbursement for any service or item, as required, to comply with subdivision (a).

review agency after January 1, 2000, and before January 1, 2003. For purposes of this section, “capital project” means the construction, expansion, replacement, remodeling, or renovation of an eligible facility, including buildings and fixed equipment. A “capital project” does not include the provision of furnishings or of equipment that is not fixed equipment.

facilities defined in subdivision (a) or (b), or both, of Section 1250 of the Health and Safety Code.

and that are available and accessible to patients eligible for services under this chapter.

obtained from audits performed by the department, and shall be applied to the corresponding fiscal year of debt service on the revenue bonds or other financing instruments issued to finance the capital project.

with that received from all other sources dedicated exclusively to debt service exceed 100 percent of the debt service for the capital project over the life of the loan, revenue bond, or other financing mechanism.

Financing Administration for the payment methodology to be utilized, and shall not make any payment pursuant to this section prior to obtaining that approval.

provided in subdivision (g). Any amount of the costs of the capital project that are not reimbursed by federal funds shall be borne solely by the eligible facility.

specified by the department.

in a special account, the funds of which shall be used exclusively for the payment of expenses related to the eligible capital project.

the federal Health Care Financing Administration that the supplemental reimbursement provided in this section must be made to any facility not described therein, this section shall become immediately inoperative.

reimbursement pursuant to this section shall be calculated and paid as follows:

to this section.

agreement with the department for the purposes of implementing this section and reimbursing the department for the costs of administering this section.

facility services are eligible for federal financial participation.

agreement with the department for the purpose of implementing this section.

reconciliation process established in the Medi-Cal State Plan to ensure that it is not made in excess of allowable costs, and to ensure that it is made up to allowable costs.

state, including Medicare critical access hospitals, but excluding public hospitals, psychiatric hospitals, and rehabilitation hospitals, which include alcohol and drug rehabilitation hospitals.

(ii) The payment methodology developed pursuant to this section shall be implemented on July 1, 2012, or on the date upon which the director executes a declaration certifying that all necessary federal approvals have been obtained and the methodology is sufficient for formal implementation, whichever is later.

(B) The diagnosis-related group-based payments shall apply to all claims, except claims for psychiatric inpatient days, rehabilitation inpatient days, managed care inpatient days, and swing bed stays for long-term care services, provided, however, that psychiatric and rehabilitation inpatient days shall be excluded regardless of whether the stay was in a distinct-part unit. The

department may exclude or include other claims and services as may be determined during the development of the payment methodology.

(C) Implementation of the new payment methodology shall be coordinated with the development and implementation of the replacement Medicaid Management Information System pursuant to the contract entered into pursuant to Section 14104.3, effective on May 3, 2010.

location, hospital size, teaching status, the local hospital wage area index, and any other variables that may be relevant.

requirements of the federal Health Insurance Portability and Accountability Act of 1996.

systems. The rate setting system described in subdivision (b) shall be developed with all possible expediency. This subdivision establishes an accelerated process for issuing contracts pursuant to this section and contracts entered into pursuant to this subdivision shall be exempt from the requirements of Chapter 1 (commencing with Section 10100) and Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code.

safety, or general welfare. Initial emergency regulations and the one readoption of those regulations shall be exempt from review by the Office of Administrative Law. The initial emergency regulations and the one readoption of those regulations authorized by this section shall be submitted to the Office of Administrative Law for filing with the Secretary of State and publication in the California Code of Regulations.

bulletin, all-county letter, manual, or other similar instruction, at least five days prior to issuance. In addition, the department shall provide a copy of any provider bulletin, all-county letter, manual, or other similar instruction issued under this paragraph to the fiscal and appropriate policy committees of the Legislature.

into account the amount of base payments when combined with supplemental payments made to inpatient hospitals, including payments provided as a result of the hospital fee set forth in Article 5.22 (commencing with Section 14167.31) and Article 5.225 (commencing with Section 14167.41), it is necessary to impose the rate freeze enacted in this section.

rates in effect on July 1, 2010, to the extent that those rates are lower than the rates in effect on January 1, 2010, as provided in paragraph (1) of subdivision (c).

services for all hospitals, except designated public hospitals, as defined in subdivision (d) of Section 14166.1, that receive Medi-Cal reimbursement from the State Department of Health Care Services, both under contract with the Selective Provider Contracting Program as well as noncontract hospitals, shall be frozen to the lesser of the amount paid on January 1, 2010, or the amount paid on July 1, 2010. The rate freeze shall be in effect for reimbursements for inpatient hospital services provided to Medi-Cal beneficiaries beginning on July 1, 2010, through and including the date on which the Medicaid Management Information System converts to claim processing based on the new reimbursement methodology developed pursuant to Section 14105.28 and described in paragraph (1) of subdivision (b) of that section.

rates as provided in paragraph (1) as a contract hospital for inpatient hospital services provided to Medi-Cal eligible individuals while the rate freeze specified in paragraph (1) remains in effect.

categories of inpatient services allowable by Medi-Cal and shall not include any supplemental payments. The reimbursement includes the amounts paid for routine services together with all related ancillary services.

any other provision of this section, for the 2011–12 fiscal year and each fiscal year thereafter, or portion thereof, in which subdivision (c) remains in effect, the department shall, subject to an appropriation in the annual Budget Act applicable to the particular fiscal year, apply an increase in reimbursement rates for all hospital services that result from the freeze imposed pursuant to subdivision (c).

established by this section, will comply with applicable federal Medicaid requirements and that federal financial participation will be available.

not available with respect to any rate of reimbursement described by this section, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with the federal Medicaid requirements.

programs, which may include, but are not limited to, salaries, benefits, physician oversight, and allocated overhead costs incurred for interns and residents in medicine, osteopathy, dentistry, podiatry, nursing, and allied health and paramedical programs.

graduate medical education payments shall be inflation adjusted.

revenue to the extent the fee-for-service payments do not otherwise recognize graduate medical education costs, or incentive payments.

specified in this section. All funds derived pursuant to this section shall be deposited in the State Treasury to the credit of the DPH GME Special Fund.

consultation with the transferring entities. The department shall determine the intergovernmental transfer amounts for each applicable state fiscal year such that they are sufficient to fund the nonfederal share of the associated graduate medical education payments for that year, plus five percent of the aggregate nonfederal share that would be associated with the graduate medical education payments made pursuant to this section in that applicable state fiscal year as if the federal medical assistance percentage were 50 percent. Upon providing any intergovernmental transfer of funds, each transferring entity shall certify that the transferred funds qualify for federal financial participation pursuant to applicable federal Medicaid laws, and in the form and manner as required by the department.

intergovernmental transfers made pursuant to this section, and deposited in the DPH GME Special Fund to the full extent permitted by law. In the event federal financial participation is not available with respect to a payment under this section and either is not obtained, or results in a recoupment of payments already made, the department shall return any intergovernmental transfer fund amounts associated with the payment for which federal financial participation is not available to the applicable transferring entities within 14 days from the date of the associated recoupment or other determination, as applicable.

obtained and federal financial participation is available and is not otherwise jeopardized.

public hospitals with regard to the development and implementation, and any subsequent modification, of the payment programs established pursuant to this section.

components described in paragraph (2) of subdivision (a) of Section 14105.29.

this section. No state General Fund moneys shall be used to fund the nonfederal share of payments under this section.

Section 433.51 of Title 42 of the Code of Federal Regulations and any other applicable federal Medicaid laws. Moneys derived from these intergovernmental transfers in the DMPH GME Special Fund shall be used as the source for the nonfederal share of graduate medical education payments authorized under this section, for reimbursing the department’s administrative costs in implementing this section, and to otherwise support the Medi-Cal program. The timing and amounts of the intergovernmental transfers shall be determined by the department in consultation with the transferring entities. The department shall determine the intergovernmental transfer amounts for each applicable state fiscal year such that they are sufficient to fund the nonfederal share of the associated graduate medical education payments for that year, plus 5 percent of the aggregate nonfederal share that would be associated with the graduate medical education payments made pursuant to this section in that applicable state fiscal year as if the

federal medical assistance percentage were 50 percent. Upon providing any intergovernmental transfer of funds, each transferring entity shall certify that the transferred funds qualify for federal financial participation pursuant to applicable federal Medicaid laws, and in the form and manner as required by the department.

applicable transferring entities within 14 days from the date of the associated recoupment or other determination, as applicable.

federal financial participation available under such a program.

plan letters, provider bulletins, or other similar instructions, without taking regulatory action. The department shall timely inform, or provide access to, applicable guidance issued pursuant to this authority to affected district and municipal hospitals and their affiliated government entities. This guidance shall remain publicly available until all payments made pursuant to this section are finalized.

Division 2 of the Business and Professions Code and the regulations adopted thereunder, and Section 263a of Title 42 of the United States Code and the regulations adopted thereunder.

include, but are not limited to, blood factors and immunizations, the department may enter into contracts with providers licensed to dispense dangerous drugs or devices pursuant to Chapter 9 (commencing with Section 4000) of Division 2 of the Business and Professions Code, for programs that qualify for federal funding pursuant to the Medicaid state plan, or waivers, and the programs authorized by Article 5 (commencing with Section 123800) of Chapter 3 of Part 2 of, and Article 1 (commencing with Section 125125) of Chapter 2 of Part 5 of, Division 106 of the Health and Safety Code, in accordance with this subdivision.

drugs, contract with a nonexclusive number of providers that meet the needs of the affected population, covers all geographic regions in California, and reflects the distribution of the specialty drug in the community. The department may use a single provider in the event the product manufacturer designates a sole-source delivery mechanism. The department shall consult with interested parties and appropriate stakeholders in implementing this section with respect to all of the following:

exclusion of drugs into the specialty pharmacy program.

intermediary to establish provider contracts pursuant to this section for programs that qualify for federal funding pursuant to the Medicaid state plan, or waivers, and the programs authorized by Article 5 (commencing with Section 123800) of Chapter 3 of Part 2 of, and Article 1 (commencing with Section 125125) of Chapter 2 of Part 5 of, Division 106 of the Health and Safety Code.

Section 10100) of Division 2 of the Public Contract Code and any policies, procedures, or regulations authorized by these provisions.

statewide association of clinical laboratories and other appropriate stakeholders on the implementation of the contracting provisions specified in this section to ensure maximum access for Medi-Cal patients consistent with the savings targets projected by the 2002–03 budget conference committee for clinical laboratory services provided under the Medi-Cal program.

For purposes of the Medi-Cal contract drug list, the following definitions shall apply:

another manufacturer is approved by the federal Food and Drug Administration under the provisions for an Abbreviated New Drug Application.

relabeling, and distribution of drugs.

for reimbursement by the manufacturer, as specified in the contract, in addition to the Medicaid rebate.

data from the department’s prescription drug paid claims tapes within 30 days of receipt of the federal Centers for Medicare and Medicaid Services’ file of manufacturer rebate information. In lieu of paying the entire invoiced amount, a manufacturer may contest the invoiced amount pursuant to procedures established by the federal Centers for Medicare and Medicaid Services’ Medicaid Drug Rebate Program Releases or regulations by mailing a notice, that shall set forth its grounds for contesting the invoiced amount, to the department within 38 days of the department’s mailing of the state invoice and supporting utilization data. For purposes of state accounting practices only, the contested balance shall not be considered an accounts receivable amount until final resolution of the dispute pursuant to procedures established by the federal Centers for Medicare and Medicaid Services’ Medicaid Drug Rebate Program Releases or regulations that results in a finding of an underpayment by the manufacturer. Manufacturers

may request, and the department shall timely provide, at cost, Medi-Cal provider level drug utilization data, and other Medi-Cal utilization data necessary to resolve a contested department-invoiced rebate amount.

(ii) Capitated plans that include a prescription drug benefit in the capitated rate, and that have negotiated contracts for rebates or discounts with manufacturers.

(B) This paragraph shall become inoperative on July 1, 2014.

this chapter, Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591), that qualify for federal drug rebates pursuant to Section 1927 of the federal Social Security Act (42 U.S.C. Sec. 1396r-8) or that otherwise qualify for federal funds under Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.) pursuant to the Medicaid state plan or waivers.

drugs not subject to the requirements of paragraph (5), utilization data used to determine the state rebate shall include all data from health plans, except for health maintenance organizations, as defined in Section 300e(a) of Title 42 of the United States Code, including those organizations that contract pursuant to Section 1396b(m) of Title 42 of the United States Code.

Code. Notwithstanding Section 10231.5 of the Government Code, beginning six months after the effective date of this section, the department shall provide a status report to the Legislature on a semiannual basis, in compliance with Section 9795 of the Government Code, until regulations have been adopted.

department shall select the therapeutic categories to be included on the list of contract drugs, and the order in which it seeks contracts for those categories. The department may establish different contracting schedules for single-source and multiple-source drugs within a given therapeutic category.

However, in no event shall a beneficiary be denied continued use of a drug that is part of a prescribed therapy in effect as of September 2, 1992, until the prescribed therapy is no longer prescribed.

contracts under this section is necessary. Therefore, contracts entered into on a nonbid basis shall be exempt from Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code.

contract drugs. The notice shall include a description of the beneficiary’s right to a fair hearing and shall encourage the beneficiary to consult a physician to determine if an appropriate substitute medication is available from Medi-Cal.

that begin on or after the effective date of the act that added this subdivision.

payment is not received, the department shall send overdue notices to the manufacturer at 38, 68, and 98 days after the date of mailing of the invoice, and supporting utilization data. If the department has not received a rebate payment, including interest, within 180 days of the date of mailing of the invoice, including supporting utilization data, the manufacturer’s contract with the department shall be deemed to be in default and the contract may be terminated in accordance with the terms of the contract. For all other manufacturers, if the department has not received a rebate payment, including interest, within 180 days of the date of mailing of the invoice, including supporting utilization data, all of the drug products of those manufacturers shall be made available only through prior authorization effective 270 days after the date of mailing of the invoice, including utilization data sent to manufacturers.

payment or evidence of payment to the department at least 40 days prior to the proposed date the drug is to be made available only through prior authorization pursuant to subdivision (o), the department shall terminate its actions to place the manufacturers’ drug products on prior authorization.

January 1, 2026, a beneficiary may obtain covered drugs placed on prior authorization pursuant to subdivision (o) only if their pharmacy provider or prescriber initiates a prior authorization request that is subsequently approved by the department.

resolve rebate payment disputes within 90 days of notification by the manufacturer to the department of a dispute in the calculation of rebate payments.

State and federal rebates that are owed to the state for drugs dispensed to Medi-Cal beneficiaries shall not be reduced to the state if a manufacturer reports, to the federal Centers for Medicare and Medicaid Services or the department, a revised drug product’s average manufacturer price or best price as these terms are defined pursuant to Section 1927 of the federal Social Security Act (42 U.S.C. Sec. 1396r-8) for any

calendar quarter in which the rebate was due.

Code.

are obtained and federal financial participation is available and is not otherwise jeopardized.

2 of the Government Code, Section 19130 of the Government Code, Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and the State Administrative Manual, and shall be exempt from the review or approval of any division of the Department of General Services. Contracts entered into or amended pursuant to this section shall be confidential and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).

provided to the federal Centers for Medicare and Medicaid Services. The report shall include the following expenditure and receipt information:

The department shall, in writing, invite any manufacturer with single-source drug products on the formulary as of July 1, 1990, to enter into negotiations

relative to the retention of its drug or drugs. As to the issue of cost, the department shall accept the manufacturer’s best price as sufficient for purposes of entering into a contract to retain the drug or drugs on the list of contract drugs.

If the department and a manufacturer enter into a contract for retention of a drug or drugs on the list of contract drugs, the drug or drugs shall be retained on the list of contract drugs for the effective term of the contract.

If a manufacturer refuses to enter into negotiations with the department pursuant to this subdivision, or if after 30 days of negotiation, the manufacturer has not agreed to execute a contract for a drug at the manufacturer’s best price, the department may suspend from the list of contract drugs the manufacturer’s single-source drug in question for a period of at least 180 days. The department shall lift the suspension upon execution of a contract for that

drug. Consistent with the provisions of this section, the department shall delete the Medi-Cal drug formulary specified in paragraphs (b), (c), (d), and (e) of Section 59999 of Title 22 of the California Code of Regulations.

intermediary.

department to discontinue negotiations into which it has entered with any manufacturer as of the effective date of this section. Contracts entered into as a result of these negotiations shall be exempt from the initial therapeutic category review in which they would normally be considered.

children, adults, seniors, and persons with disabilities enrolled in the Medi-Cal program.

categories.

When the department determines that a drug should be removed from the list of contract drugs, the department shall provide individual notice to impacted beneficiaries, at least 60 calendar days prior to the drug being removed from the list of contract drugs, that the drug is only obtainable through the prior authorization process. The notice shall include a description of the beneficiary’s right to a fair hearing and shall encourage the beneficiary to consult a physician to determine if an appropriate substitute medication is available from Medi-Cal. The department shall also provide provider notice about the removal at least 60 calendar days prior to the drug being removed from the list of contract drugs on the department’s internet website.

(A) The request is made within 12 months of approval for marketing by the federal Food and Drug Administration.

(B) The manufacturer agrees to negotiate a contract with the department to provide

the drug at the manufacturer’s best price.

(C) (i) The manufacturer provides the department with necessary information, as specified by the department, in the request.

(ii) Notwithstanding clause (i), either of the following may be submitted by the manufacturer in lieu of the Summary Basis of Approval prepared by the federal Food and Drug Administration for that drug:

(I) The federal Food and Drug Administration’s approval or approvable letter for the drug and federal Food and Drug Administration’s approved labeling.

(II) The federal Food and Drug Administration’s medical officers’ and pharmacologists’ reviews and the federal Food and Drug Administration’s approved labeling.

(D) The department had concluded contracting for the therapeutic category in which the drug is included prior to approval of the drug by the federal Food and Drug Administration.

contract with the department to provide the drug at the manufacturer’s best price.

(A) The safety of the drug.

(B) The effectiveness of the

drug.

(C) The essential need for the drug.

(D) The potential for misuse of the drug.

(E) The cost of the drug.

of the department’s written decision.

list of preferred prior authorization drugs that is hereby established as a subset of the list of contract drugs. To ensure that the health needs of Medi-Cal beneficiaries are met, the department shall evaluate the request pursuant to subdivision (c). The department shall give preference for prior authorization drugs based on the medical need or continuing care of the beneficiary. The department may contract with manufacturers of drugs on the list of preferred prior authorization drugs. Contracts executed pursuant to this subdivision are subject to Section 14105.33.

approval of the Office of Administrative Law.

treatment authorization request for that drug until a final decision is adopted by the director. Should the beneficiary seek judicial review of the director’s decision, a treatment authorization request shall be granted for that drug until a final decision is issued by the court.

declaratory relief to review the director’s decision to delete or suspend a drug from the list of contract drugs.

The director shall, in considering suspension or deletion of drugs from the list of contract drugs, ensure that the department has the ability to process drug treatment authorization requests (TARs) without substantial degradation of the level of service, including response time, to providers which was in effect July 1, 1990.

In considering suspension or deletion of drugs, the director shall seek the advice of the Chief of the Field Services Branch and the Medi-Cal Contract Drug Advisory Committee.

If the treatment authorization request

reports provided in subdivision (b) of Section 14105.42 indicate a substantial degradation in the level of service, including response time, for processing TARs, the director shall, within 60 days, hold a public hearing on the functioning of the TAR system.

Subsequent to the hearing, the director shall consult with at least two members of each group represented on the Medi-Cal Contract Drug Advisory Committee as provided in subdivision (b) of Section 14105.4 and take appropriate action to remedy the problem areas discussed in the report and in the public hearing.

Based upon the information gathered as a result of the reports and public hearing referred to above, and in consultation with the Medi-Cal Contract Drug Advisory Committee, the director may add drugs which previously had been suspended or deleted to the list of contract drugs.

Moneys accruing to the department from contracts executed pursuant to Section 14105.33 shall be deposited in the Health Care Deposit Fund, and shall be subject to appropriation by the Legislature.

cost-effectiveness of contracts executed pursuant to Section 14105.33.

The provisions of Sections 14105.4 to 14105.41, inclusive, and Section 14105.65 shall not preclude the department from taking emergency regulatory action as it deems appropriate.

This section shall become operative on January 1, 1997.

the period prior to the completion of the procedures established pursuant to Section 14105.33.

approved by the federal Food and Drug Administration or recognized for that use in a compendia listed in Section 1927 of the federal Social Security Act (42 U.S.C. Sec. 1396r-8).

to be approved pursuant to paragraph (1) of subdivision (a) shall be immediately added to the Medi-Cal list of contract drugs, and shall be exempt from the contract requirements of Section 14105.33.

AIDS-related condition within 15 days of that approval, the department shall be granted an additional 30 days to comply with subdivision (a). Written notification from the drug manufacturer shall include a copy of the United States Food and Drug Administration approval letter and the official labeling for the drug.

drug for which the department does not obtain a rebate pursuant to subdivision (a). The department may only use those mechanisms in the event that, by February 1, 2003, the manufacturer refuses to provide the additional rebate. This subdivision shall become inoperative on January 1, 2010.

Code, and those capitated plans that include a prescription drug benefit in the capitated rate and that have negotiated contracts for rebates or discounts with manufacturers.

Medi-Cal utilization data for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2:

who have not entered into a supplemental rebate agreement pursuant to subdivisions (e) and (f) shall provide to the department a state rebate, in addition to rebates pursuant to other provisions of state or federal law, equal to an amount not less than 20 percent of the average manufacturer price based on Medi-Cal utilization data for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2 prior to January 1, 2010. If the pharmaceutical manufacturer does not enter into a supplemental rebate agreement by March 1, 2010, the manufacturer’s drug product shall be made available only through an approved treatment authorization request pursuant to subdivision (i).

subdivision (e). If the pharmaceutical manufacturer does not enter into a supplemental rebate agreement within 60 days after the addition of the drug to the Medi-Cal list of contract drugs, the manufacturer shall provide to the department a state rebate equal to not less than 25 percent of the average manufacturer price based on Medi-Cal utilization data for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2. If the pharmaceutical manufacturer does not enter into a supplemental rebate agreement within 120 days after the addition of the drug to the Medi-Cal list of contract drugs, the pharmaceutical manufacturer’s drug product shall be made available only through an approved treatment authorization request pursuant to subdivision (i). For supplemental rebate agreements executed more than 120 days after the addition of the drug product to the Medi-Cal list of contract drugs, the state rebate shall equal an amount not less than 25 percent of the

average manufacturer price based on Medi-Cal utilization data for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2.

of the Office of Administrative Law.

Notwithstanding the provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, emergency regulations adopted by the department in order to implement subdivision (b) shall not be subject to the review and approval of the Office of Administrative Law. These regulations shall become effective immediately upon filing with the Secretary of State.

Act (42 U.S.C. Sec. 1396r-8).

by the federal Food and Drug Administration (FDA), as those drug products having the same chemical ingredients.

drug” means any drug whose labeling does not contain the statement referenced in paragraph (7).

beneficiary or caregiver, or specialized nursing facility services, or may include extended patient education, counseling, monitoring, or clinical support.

wholesaler acquisition cost in the department’s primary price reference source.

(A) The drug ingredient cost plus a professional dispensing fee.

(B) The pharmacy’s usual and customary charge as defined in Section 14105.455.

residing in a skilled nursing facility or intermediate care facility shall be eight dollars ($8) per dispensed prescription. For purposes of this paragraph, “skilled nursing facility” and “intermediate care facility” have the same meaning as those terms are defined in Division 5 (commencing with Section 70001) of Title 22 of the California Code of Regulations.

(ii) Ninety thousand or

more claims per year, the professional dispensing fee shall be ten dollars and five cents ($10.05).

(C) If the department determines that a change in the amount of the professional dispensing fee is necessary pursuant to this section in order to meet federal Medicaid requirements, the department shall establish a new professional dispensing fee through the state budget process.

(ii) The department shall consult with interested parties and appropriate stakeholders in implementing this subparagraph.

the mean of the average manufacturer’s price of drugs generically equivalent to the particular innovator drug plus a percent markup determined by the department to be necessary for the MAIC to represent the average purchase price paid by retail pharmacies in California.

(ii) Pursuant to a contract with a vendor for

the purpose of surveying drug price information, collecting data, and calculating a proposed MAIC.

(iii) Based on the volume weighted actual acquisition cost of drugs generically equivalent to the particular innovator drug adjusted by the department to represent the average purchase price paid by Medi-Cal pharmacy providers.

(D) The department shall publish the list of MAICs in pharmacy provider bulletins and manuals, update the MAICs at least annually, and notify Medi-Cal providers at least 30 days prior to the effective date of a MAIC.

(E) The department shall establish a process for providers to seek a change to a specific MAIC when the providers believe the MAIC does not reflect current available market prices.

If the department determines a MAIC change is warranted, the department may update a specific MAIC prior to notifying providers.

(F) In determining the average purchase price, the department shall consider the provider-related costs of the products that include, but are not limited to, shipping, handling, and storage. Costs of the provider that are included in the costs of the dispensing shall not be used to determine the average purchase price.

purchase price paid by retail pharmacies in California.

(ii) Based on the proposed actual acquisition cost as calculated by the vendor pursuant to subparagraph (B).

(iii) Based on a national pricing benchmark obtained from the federal Centers for Medicare and Medicaid Services or on a similar benchmark listed in the department’s primary price reference source adjusted by the department to verify that the actual acquisition cost represents the average purchase price paid by retail pharmacies in California.

(B) For the purposes of paragraph (3), the department may contract with a vendor for the purposes of surveying drug price information, collecting data from providers, wholesalers, or drug manufacturers, and

calculating a proposed actual acquisition cost.

(C) (i) Medi-Cal pharmacy providers shall submit drug price information to the department or a vendor designated by the department for the purposes of establishing the actual acquisition cost. The information submitted by pharmacy providers shall include, but not be limited to, invoice prices and all discounts, rebates, and refunds known to the provider that would apply to the acquisition cost of the drug products purchased during the calendar quarter. Pharmacy warehouses shall be exempt from the survey process, but shall provide drug cost information upon audit by the department for the purposes of validating individual pharmacy provider acquisition costs.

(ii) Pharmacy providers that fail to submit drug price

information

to the department or the vendor as required by this subparagraph shall receive notice that if they do not provide the required information within five working days, they shall be subject to suspension under subdivisions (a) and (c) of Section 14123.

(D) (i) For new drugs or new formulations of existing drugs, if drug price information is unavailable pursuant to clause (i) of subparagraph (C), drug manufacturers and wholesalers shall submit drug price information to the department or a vendor designated by the department for the purposes of establishing the actual acquisition cost. Drug price information shall include, but not be limited to, net unit sales of a drug product sold to retail pharmacies in California divided by the total number of units of the drug sold by the manufacturer or wholesaler in a

specified period of time determined by the department.

(ii) Drug products from manufacturers and wholesalers that fail to submit drug price information to the department or the vendor as required by this subparagraph shall not be a reimbursable benefit of the Medi-Cal program for those manufacturers and wholesalers until the department has established the actual acquisition cost for those drug products.

(E) Drug pricing information provided to the department or a vendor designated by the department for the purposes of establishing the actual acquisition cost pursuant to this section shall be confidential and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).

(F) Prior to the implementation of an actual acquisition cost methodology, the department shall collect data through a survey of pharmacy providers for purposes of establishing a professional dispensing fee or fees in compliance with federal Medicaid requirements.

(ii) For drug products provided by pharmacy providers pursuant to subdivision (f) of Section 14105.3, a differential professional fee or payment for services to provide specialized care may be considered as part of the contracts established pursuant to that section.

(G) When the department implements the actual acquisition cost methodology, the department shall update the Medi-Cal claims processing system to reflect the actual acquisition cost of drugs not later than 30 days after the department has established actual acquisition cost pursuant to subparagraph (A).

(H) Notwithstanding any other law, if the department implements actual acquisition cost pursuant to clause (i) or (ii) of subparagraph (A), the department shall update actual acquisition costs at least every three months and notify Medi-Cal providers at least 30 days prior to the effective date of any change in an actual acquisition cost.

(I) The department shall make available a process for providers to seek a change

to a specific actual acquisition cost when the providers believe the actual acquisition cost does not reflect current available market prices. If the department determines an actual acquisition cost change is warranted, the department may update a specific actual acquisition cost prior to notifying providers.

this section by means of a provider bulletin or notice, policy letter, or other similar instructions, without taking regulatory action.

applicable federal Medicaid requirements and that federal financial participation will be available.

actual acquisition cost methodology pursuant to this section.

(A) The United States Department of Health and Human Services has identified the critical need for state Medicaid agencies to establish pharmacy reimbursement rates based on a pricing benchmark that reflects actual acquisition costs.

(B) The Medi-Cal program currently uses a methodology based on average wholesale price (AWP).

(C) Investigations by the federal Office of Inspector General have found that average wholesale price is inflated relative to average acquisition cost.

wholesale price to a methodology based on actual acquisition cost.

California, excluding Medi-Cal managed care plans and Medicare Part D prescription drug plans.

Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of a provider bulletin or notice, policy letter, or other similar instructions, without taking regulatory action.

same meaning as that term is defined in Section 14105.45.

less than the Medicare rate.

whether federal financial participation is available, the director shall determine whether the rates comply with the federal Medicaid requirements, including those set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code. To the extent that the director determines that a rate of reimbursement described in this section does not comply with the federal Medicaid requirements, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with the federal Medicaid requirements.

requirements.

beneficiaries.

reimbursement.

process, which shall include representatives of qualifying nonhospital 340B community clinics. Representatives shall be geographically diverse and consist of qualifying nonhospital 340B community clinics with differing pharmacy arrangements, including those that operate in-house pharmacies and those with contract pharmacy arrangements. The stakeholder process shall be utilized to develop and implement the methodology for distribution of supplemental pool payments to qualifying nonhospital 340B community clinics. This shall include the eligibility criteria for receipt of supplemental payments, the aggregate amount of pool funding available in a respective fiscal year, the criteria for apportioning the pool funding among qualifying nonhospital 340B community clinics, and the timing, frequency, and amount of the resultant supplemental payments.

methodology for distribution no later than October 1, 2020.

considered separate and apart from the prospective payment system (PPS) reimbursement the clinic receives pursuant to Section 1396a(bb) of Title 42 of the United States Code and shall not be considered during annual reconciliation of the PPS rate.

modification is made, the department shall notify qualifying nonhospital 340B community clinics, the Joint Legislative Budget Committee, and the relevant policy and fiscal committees of the Legislature within 10 business days of that modification.

retained by the director, stating that implementation of Section 14105.468 has commenced and that all closeout activities associated with this section have been completed. This section shall become inoperative one year after the date that the director executes the declaration and shall be repealed on January 1 of the year following the date upon which this section becomes inoperative.

with Section 14199.100) to this part at the November 5, 2024, statewide general election, this paragraph shall be inoperative as of January 1, 2025.

law, directed payments received by qualifying nonhospital 340B community clinics pursuant to this section shall be considered separate and apart from the prospective payment system (PPS) reimbursement the clinic receives pursuant to subsection (bb) of Section 1396a of Title 42 of the United States Code and shall not be considered during annual reconciliation of the PPS rate.

to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.

county, or hospital authority that is exempt from licensure under subdivision (b) of Section 1206 of the Health and Safety Code, and that is a 340B covered entity pursuant to Section 256b of Title 42 of the United States Code for the duration of each applicable fiscal year for which the department implements this section.

that are available in California. For purposes of this section, “wholesale selling price” means the price, including discounts and rebates, paid by a provider to a wholesaler, distributor, or manufacturer for a medical supply product.

Section 14105.3.

demonstrated experience of a significant variation in performance among the products subject to this particular contracting process.

consider for addition, products of that manufacturer in the selected product categories.

the department shall add the product to its respective list.

publication of the changes in provider bulletins.

14105.47, 14105.8, and Sections 14125 to 14125.9, inclusive, may file an appeal of that decision with the director within 30 calendar days of the department’s written decision.

Program for the same or similar item or service, or (3) the guaranteed acquisition cost negotiated by means of the contracting process provided for pursuant to Section 14105.3 plus a percentage markup to be established by the department.

equipment billed to the Medi-Cal program utilizing codes with no specified maximum allowable rate shall be the lesser of (1) the amount billed pursuant to Section 51008.1 of Title 22 of the California Code of Regulations, (2) the guaranteed acquisition cost negotiated by means of the contracting process provided for pursuant to Section 14105.3 plus a percentage markup to be established by the department, (3) the actual acquisition cost plus a markup to be established by the department, (4) the manufacturer’s suggested retail purchase price on or prior to the date of service, and documented by a printed catalog or a hard copy of an electronic catalog page showing that price, reduced by a percentage discount not to exceed 20 percent, or not to exceed 15 percent for wheelchairs and wheelchair accessories if the provider employs or contracts with a qualified rehabilitation technology professional, as defined in Section 14132.85, or (5) a price established through targeted product-specific cost containment

provisions developed with providers.

pursuant to Section 14105.3, plus a percentage markup to be established by the department.

Budget Committee of the State Department of Health Services’ findings and recommended changes to ensure program integrity.

section with respect to all of the following:

Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of the Government Code), actions of the department under this section shall not be subject to the rulemaking provisions of the Administrative Procedure Act or to the review and approval of the Office of Administrative Law.

The director or prepaid health plans shall make no payment for services rendered prior to January 1, 1977, to any health facility that secures a license under the provisions of Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code after July 1, 1970, covering a new facility or additional bed capacity or the conversion of existing bed capacity to a different license category, unless the licensee received a favorable final decision by the voluntary area health planning agency in the area, the consumer members of a voluntary area

health planning agency acting as an appeals body or the Advisory Health Council pursuant to Sections 127155 to 127235, inclusive, of the Health and Safety Code; or unless the licensee had filed an application for a license prior to January 1, 1970, and the application met all then-existing requirements and regulations of the appropriate state agency at the time of application including, at least, preliminary submission of plans, and if the licensee commences construction of his or her project prior to July 1, 1971, and if the licensee has on file with the department a notarized affidavit from the building department having jurisdiction indicating that substantial progress on the approved project was attained by January 1, 1973, and the licensee has on file with the county recorder and department a valid notice of construction completion indicating January 1, 1974, as the completion date; except that the department shall extend the foregoing dates by no more than a total of two years in the case of projects

where delay has resulted from the death of the original applicant, and shall extend the foregoing dates by no more than a total of one year in the case of projects where other good cause has been shown why the extension should be granted. The exception provided for in the preceding sentence with respect to applications filed prior to January 1, 1970, except for transfers executed before November 30, 1970, or after July 1, 1971, shall not apply to transferees of the applications of the original applicants.

Voluntary area health planning agencies may extend, until July 1, 1972, the date upon which applicants, qualifying under the exception in this section, shall commence construction, if the voluntary area health planning agencies declare that good cause has been shown why the extension should be granted, provided that an applicant applying for the extension had, prior to January 1, 1970, received approval of a health planning association in the county wherein the

applicant is located. Applicants receiving extension of the construction commencement date shall have on file with the department a notarized affidavit from the building department having jurisdiction indicating that substantial progress on the approved project was attained by January 1, 1974, and have on file with the county recorder and department a valid notice of construction completion indicating January 1, 1975, as the completion date; except that the department shall extend each of the foregoing dates by no more than a total of one year in the case of projects where good cause has been shown why the extension should be granted.

rough-in; the rough flooring; the exterior walls and windows; and the finished roof.

with final architectural plans and specifications approved by the agency.

not exceed 80 percent of the lowest maximum allowance for California established by the federal Medicare program for the same or similar item or service.

discuss the items.

No health facility licensed under the provisions of Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code shall be entitled to receive, or shall receive, any payment whatsoever from the director, or from any prepaid health plan, for any services rendered to any Medi-Cal program beneficiary if the health facility has commenced construction of a project after January 1, 1977, and the health facility has failed to obtain a certificate of need covering such project issued pursuant to Part 1.5 (commencing with Section 437) of Division 1 of the Health and Safety Code. Upon commencement of such a project, or as soon thereafter as possible, the

director or the prepaid health plan shall notify the facility in writing of termination of all payments for any services rendered in any portion of the facility after 30 days from the date the notice is mailed.

For the purposes of this section, a “project” shall mean any project for which a certificate of need is required pursuant to Part 1.5 (commencing with Section 437) of Division 1 of the Health and Safety Code.

product cost reimbursement or removing a drug from the Medi-Cal list of contract drugs shall be operative until at least 30 days after eligible pharmacies have been mailed a notice of the reimbursement limitation by the department or the fiscal intermediary.

policy shall be published in the Medi-Cal provider bulletin that immediately follows that 180-day period. The effective date of the drug utilization policy shall be no later than the publication date of the bulletin.

controls, and publish all utilization controls in both the final drug utilization policy and the Medi-Cal provider bulletin.

decision to execute a contract, and when evaluating enteral nutrition products for retention on, addition to, or deletion from, the list of enteral nutrition products, consider all of the following criteria:

(A) The safety of the product.

(B) The effectiveness of the product.

(C) The essential need for the product.

(D) The potential for misuse of the product.

(E) The immediate or long-term cost effectiveness of the product.

support a decision that the product should be deleted from, should not be added to, or should not be retained on, the list of medical supplies. However, the superiority of a product under one criterion may be sufficient to warrant the addition or retention of the product, notwithstanding a deficiency in another criterion.

Medi-Cal program. The department may deem an incomplete product a benefit for patients with diagnoses, including, but not limited to, malabsorption and inborn errors of metabolism, when the product either appropriately lacks only an offending nutrient, or has been shown to not be investigational nor experimental when used as part of a therapeutic regimen to prevent serious disability or death, or when both conditions apply.

products shall become effective no sooner than 30 days after publication of the changes in provider bulletins.

Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and shall not be subject to the review and approval of the Office of Administrative Law.

prior to the date the product was deleted. A beneficiary shall remain eligible for continuing care status provided that a claim is submitted for the enteral nutrition product in question at least every 100 days and the date of service of the claim is within 100 days of the date of service of the last claim submitted for the same enteral nutrition product.

however the interest rate shall be increased by 10 percentage points.

providers.

Blood factors include, but are not limited to, all of the following:

(ii) Factor VIII, porcine.

(iii) Factor VIII, recombinant.

(iv) Factor IX, nonrecombinant.

(vi) Factor IX, recombinant.

(vii) Antithrombin III.

(viii) Anti-inhibitor factor.

(ix) Von Willebrand factor.

(B) Immune Globulin Intravenous.

(C) Alpha-1 Proteinase Inhibitor.

reporting a projected sales price for a new product shall report the first monthly average manufacturer price reported to the federal Centers for Medicare and Medicaid Services. The reporting of an average sales price that does not meet the requirement of this subdivision shall result in that blood factor no longer being considered a covered benefit.

the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.) pursuant to the Medicaid state plan or waivers and the programs authorized by Article 5 (commencing with Section 123800) of Chapter 3 of Part 2 of, and Article 1 (commencing with Section 125125) of Chapter 2 of Part 5 of, Division 106 of the Health and Safety Code.

not execute an agreement to pay additional rebates pursuant to this section shall have their blood factors available only through an approved treatment or service authorization request. All blood factors that meet the definition of a covered outpatient drug pursuant to Section 1927 of the federal Social Security Act (42 U.S.C. Sec. 1396r-8) shall remain a benefit subject to the utilization controls provided for in this section.

qualifies for continuing care status. To be eligible for continuing care status, a beneficiary must be taking the blood factor and the department has reimbursed a claim for the blood factor with a date of service that is within 100 days prior to the date the blood factor was placed on treatment authorization request status. A beneficiary may remain eligible for continuing care status, provided that a claim is submitted for the blood factor in question at least every 100 days and the date of service of the claim is within 100 days of the date of service of the last claim submitted for the same blood factor.

Government Code), and shall not be subject to the review and approval of the Office of Administrative Law.

enrolled as a Medi-Cal provider for the period being claimed.

calculated and paid as follows:

under a payment methodology based on ground emergency medical transportation services provided to Medi-Cal beneficiaries by eligible providers on a per-transport basis or other federally permissible basis. The department shall obtain approval from the federal Centers for Medicare and Medicaid Services for the payment methodology to be utilized, and may not make any payment pursuant to this section prior to obtaining that approval.

section and reimbursing the department for the costs of administering this section.

of the following:

eligible provider is entitled, and any other records required by the federal Centers for Medicare and Medicaid

Services.

expenditures under federal law.

period in which Section 14105.945 is implemented, in whole or in part. The department may conduct any necessary and remaining administrative duties related to any time period during which this provision remained operative, even after this section becomes inoperative, and may receive all compensation for those activities until paid in full.

transports

to Medi-Cal beneficiaries.

conveyances, nor shall it include transportation by an air ambulance provider. An “emergency medical transport” does not occur if a transport is not provided following evaluation of a patient.

department has obtained necessary federal approvals.

statewide add-on increase to be provided under the program as follows:

schedule for an emergency medical transport during the time period of the applicable cost-report to an eligible provider, and weighted according to those services provided by all eligible providers during

the applicable time period.

actuarial standards.

section. During the Medi-Cal managed care rating period that the requirements of this section are implemented, any reimbursement to a noncontract emergency medical transport provider that is not an eligible provider shall be made in accordance with subdivision (b) of Section 14129.3.

managed care plan to account for the add-on increase obligations of these plans pursuant to this section in federally approved risk based capitation rates developed in accordance with Section 14301.1.

by the department, that the transferred funds qualify for federal financial participation pursuant to applicable laws relating to the federal Medicaid program. Any intergovernmental transfer of funds made pursuant to this section shall be voluntary for purposes of federal law.

providers, a protocol and schedule for funding the nonfederal share of expenditures during a Medi-Cal managed care rating period that this section is implemented using voluntary intergovernmental transfers.

shall cease to be operative on the first day of the Medi-Cal managed care rating period beginning on or after the date the department determines, after consultation with participating eligible providers, that implementation of this section is no longer financially and programmatically supportive of the Medi-Cal

program. The department shall make this determination if the projected amount of nonfederal share funds available for an applicable Medi-Cal managed care rating period is insufficient to support implementation of this section in the subject Medi-Cal managed care rating period. The department shall post notice of the determination on its internet website.

describing the modification. The director shall retain the declaration and provide a copy, within five working days of the execution of the declaration, to the fiscal and appropriate policy committees of the Legislature. The director shall post the declaration on the department’s internet website.

federal approvals are obtained.

fiscal year, and thereafter:

received as a result of the claims submitted pursuant to paragraph (2) of subdivision (g).

section prior to obtaining that approval.

described in subdivision (b), as a condition of receiving supplemental reimbursement under this section, shall enter into, and maintain, a contract with the department for the purpose of implementing this section, and to reimburse the department for its administrative costs of implementing this section.

participation for the expenditures for the services described in subdivision (e) that are allowable expenditures under federal law.

described in this section.

fiscal year, and thereafter:

facility, as described in subdivision (b), shall be equal to the amount of federal financial participation received as a result of the claims submitted pursuant to paragraph (2) of subdivision (g).

Medicare and Medicaid Services for the payment methodology to be utilized, and may not make any payment pursuant to this section prior to obtaining that approval.

owned or operated by the entity, shall do all of the following:

Medicare and Medicaid Services.

Medi-Cal payments in direct proportion to the level of the hospital’s disproportionate factor. This subdivision shall only apply to payments for services provided by disproportionate share hospitals on or after July 1, 1993.

county indigent programs gross total revenue, by multiplying that ratio by county indigent programs contractual adjustments. The outpatient component of other charity deductions from revenue shall be determined by calculating the ratio of other payors gross outpatient revenue to other payors gross total revenue, and multiplying that ratio by the sum of other charity deductions from revenue and teaching allowances for University of California teaching hospitals.

section, a hospital shall submit to the office by April 1 of each year any adjustments to its quarterly reports for the preceding calendar year. The office shall make its statewide data base, as adjusted, available to the department by April 20 of each year.

Code, and included on a disproportionate share list.

which is listed in subdivision (a), or subdivisions (c) to (g), inclusive, of Section 16996.

of Regulations, or that is a licensed provider of comprehensive emergency medical services as described in Sections 70451 to 70459, inclusive, of Title 22 of the California Code of Regulations.

adjustment” means a lump-sum amount paid under this section for acute inpatient hospital services provided by a disproportionate share hospital.

Section 1396r-4(f) of Title 42 of the United States Code.

described in paragraph (25).

adjustment year, was a public hospital as described in paragraph (25), whether or not the hospital or such component currently is located at the same site as it was located when it was a public hospital.

public hospital.

expenditures with respect to that same federal fiscal year.

provisions of this section. The payments are intended to support health care services rendered by disproportionate share hospitals.

(j), as applicable, to any hospital qualifying under subdivision (e). In addition, the department shall pay to each of those hospitals any supplemental lump-sum payment adjustment amounts that are payable, and shall adjust payment amounts, in accordance with applicable provisions of this section. The nonfederal share of all payment adjustment amounts shall be funded by amounts from the fund. The department shall obtain federal matching funds for the payment adjustment program through customary Medi-Cal accounting procedures.

federal agencies of an amendment to the Medi-Cal State Plan, as referred to in subdivision (o), and (ii) confirmation by appropriate federal agencies regarding the availability of federal financial participation for the payment adjustment program at a level of at least 40 percent of the percentage of federal financial participation that is normally applicable for Medi-Cal expenditures for acute inpatient hospital services. At the time federal approval is first obtained, the department shall proceed pursuant to subparagraphs (A) and (B) in connection with the suspended payment adjustment amounts.

payment adjustment program.

compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate.

respect to the 1995–96 payment adjustment year shall be deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate.

approvals have been obtained, the amendments enacted during the period August 1, 1996, to September 30, 1996, inclusive, shall be implemented effective as of the earliest effective date permissible under federal law. Notwithstanding any other provision of law, on or after the date that federal approval is obtained, the payments made prior to that date with respect to the 1996–97 payment adjustment year shall be deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate.

inclusive, shall not be implemented until the department has obtained any approvals that are appropriate under federal law. Until appropriate federal approvals are obtained, the payment adjustment program shall continue as though amendments had not been enacted during the period September 1, 1997, to September 30, 1997, inclusive. When appropriate federal approvals have been obtained, the amendments enacted during the period September 1, 1997, to September 30, 1997, inclusive, shall be implemented effective as of the earliest effective date permissible under federal law. Notwithstanding any other provision of law, on or after the date that federal approval is obtained, the payments made prior to that date with respect to the 1997–98 payment adjustment year shall be deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the

federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate.

deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate.

of June 1, 1999, to June 30, 1999, inclusive, shall be implemented effective as of the earliest effective date permissible under federal law. Notwithstanding any other provision of law, on or after the date that federal approval is obtained, the payments made prior to that date with respect to the particular payment adjustment year shall be deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate.

approvals that are appropriate under federal law. Until appropriate federal approvals are obtained, the payment adjustment program shall continue as though amendments had not been enacted during the period of June 1, 2000, to June 30, 2000, inclusive. When appropriate federal approvals have been obtained, the amendments enacted during the period of June 1, 2000, to June 30, 2000, inclusive, shall be implemented effective as of the earliest effective date permissible under federal law. Notwithstanding any other provision of law, on or after the date that federal approval is obtained, the payments made prior to that date with respect to the particular payment adjustment year shall be deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the

difference, if any, shall be paid or recouped by the department, as appropriate.

medicaid inpatient utilization rate for hospitals receiving medicaid payments in the state.

department quarterly access to the edited and unedited confidential patient discharge data files for all Medi-Cal eligible patients. The department shall maintain the confidentiality of that data to the same extent as is required of the Office of Statewide Health Planning and Development. In addition, the Office of Statewide Health Planning and Development shall provide to the department no later than March 1 of each year, the data specified by the department, as the data existed on the statewide data base file as of February 1 of each year (except that for the 1991–92 payment adjustment year, the Office of Statewide Health Planning and Development shall provide data as it existed on the statewide data base file as of August 30, 1991), from all of the following:

(A) Hospital annual disclosure reports, filed with the Office of Statewide Health Planning and Development pursuant to Section 443.31 or 128735 of the Health and Safety Code, for

hospital fiscal years which ended during the calendar year ending 13 months prior to the applicable February 1.

(B) Annual reports of hospitals, filed with the Office of Statewide Health Planning and Development pursuant to Section 439.2 or 127285 of the Health and Safety Code, for the calendar year ending 13 months prior to the applicable February 1.

(C) Hospital patient discharge data reports, filed with the Office of Statewide Health Planning and Development pursuant to subdivision (g) of Section 443.31 or 128735 of the Health and Safety Code, for the calendar year ending 13 months prior to the applicable February 1.

(D) Any other materials on file with the Office of Statewide Health Planning and Development.

show all of the following:

operations under present or previous ownership.

pursuant to this section shall not be included for any purpose in the calculations and determinations made pursuant to this section.

annual data filed with the Office of Statewide Health Planning and Development. This shall be done by the department in order to ensure that low-income utilization rates are determined in a manner as equivalent as possible to the approach and methodology used for the 1991–92 payment adjustment year.

(ii) The efforts of the department to obtain and apply data for the purposes described in clause (i) shall include a survey to collect, from one or more hospitals, any data necessary to calculate the low-income utilization rates in accordance with clause (i). The purpose for the survey shall be to clarify the data already included by hospitals in their annual reports submitted to the Office of Statewide Health Planning and Development. The data requested by the department in the survey may include, among other things, information regarding the manner in which payments made to hospitals under this section were reported by the hospitals to the Office

of Statewide Health Planning and Development. The data requested may also include information regarding the manner in which hospitals reported figures relating to charity care, bad debts, and amounts received in connection with state or local indigent care programs.

(iii) In connection with any survey conducted under clause (ii), the department may require that hospitals submit responses in accordance with a deadline established by the department, and that the responses be supported by a verification of a hospital representative. Should any hospital not respond on a timely basis in accordance with protocols established by the department, the department shall utilize prior year data, adjusted by the department in its discretion, to calculate the hospital’s low-income utilization rate.

payment adjustment amounts and supplemental lump-sum payment adjustments, paid or payable to a hospital under this section, shall be recorded on an accrual basis of accounting in reports filed by the hospital with the Office of Statewide Health Planning and Development or the department.

those Medi-Cal State Plan amendments of the type referred to in paragraph (4), to be initially submitted to the federal Health Care Financing Administration on or after the operative date of this paragraph, these amendments shall be provided to representatives of the hospital industry, including, but not limited to, the California Healthcare Association, as soon as possible, but in no event less than 30 days prior to submission of the amendment to the federal Health Care Financing Administration. If, in the public interest, the director determines that exigent circumstances necessitate that the 30-day requirement cannot be met, the director shall immediately in writing advise the Chairperson of the Senate Committee on Health and Human Services and the Assembly Committee on Health of the exigent circumstances and the department’s timetable for providing the amendment to the hospital industry.

service paid by or on behalf of the department during a payment adjustment year, regardless of dates of service, to a hospital on the applicable disproportionate share list, where that hospital, on the first day of the payment adjustment year, is a major teaching hospital, the hospital shall be paid the sum of all of the following amounts, except as limited by other applicable provisions of this section:

dollar ($70) payment adjustment for each percentage point, from 30 percent to 34 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list.

acute psychiatric hospital or an alcohol-drug rehabilitation hospital, the hospital shall be paid the sum of all of the following amounts, except as limited by other applicable provisions of this section:

the department during a payment adjustment year, regardless of dates of service, to a hospital on the applicable disproportionate share list, where that hospital does not meet the criteria for receiving payments under subdivision (g), (h), or (i) above, the hospital shall be paid the sum of all of the following amounts, except as limited by other applicable provisions of this section:

disproportionate share list.

adjustment amount calculated for each eligible hospital pursuant to subdivision (g), (h), (i), or (j) shall be adjusted by a percentage identical to the percentage increase in transfer amounts that the department has authorized for use pursuant to paragraph (1) of subdivision (h) of Section 14163 for the particular fiscal year.

purposes of payment adjustments under this section, the department shall recognize all acute inpatient hospital days of service required to be taken into account under federal law.

(B) For the 1992–93 payment year, the department may consider the Medi-Cal days of service provided by the qualifying hospitals for Medi-Cal patients covered by the prepaid health plans contracting directly with the Medi-Cal program in achieving their maximum payments.

(C) For 1993–94 and subsequent payment years, the department may consider the Medi-Cal days of service provided by hospitals for Medi-Cal patients covered by the prepaid health plans contracting directly with the Medi-Cal program in determining the Medi-Cal utilization rate and the maximum days of payment. Additionally, the department may consider the days of service provided by the qualifying hospitals for Medi-Cal patients covered by

the prepaid health plans contracting directly with the Medi-Cal program in achieving their maximum payments in those payment years.

(D) In order to meet the requirements of subparagraph (C), the Office of Statewide Health Planning and Development shall provide to the department quarterly access to all data elements on the edited and unedited confidential patient discharge data files, including Social Security account numbers. The department shall match these data with the department’s Medi-Cal Eligibility Data System files to extract any data necessary to meet the requirements of subparagraph (C). The department shall maintain the confidentiality of all patient discharge data to the same extent as is required of the Office of Statewide Health Planning and Development.

Medi-Cal acute inpatient hospital days for which payment adjustment amounts may be paid under this section with respect to each payment adjustment year. The maximum limit shall be that number of days that equals 80 percent of the eligible hospital’s annualized Medi-Cal inpatient paid days, as determined from all Medi-Cal paid claims records available through April 1 preceding the beginning of the payment adjustment year.

disproportionate share hospitals pursuant to this section and Section 14105.99 shall not cause any other amounts paid or payable to a hospital to be deemed in excess of any applicable maximum payment limit.

department shall compute, prior to the beginning of each payment adjustment year, the projected size of the payment adjustment program for the particular payment adjustment year. To do so, the department shall determine the projected total payment adjustment amount for each eligible hospital, and shall add these amounts together to determine the projected total size of the program. To the extent this projected total figure for the program exceeds the portion of the maximum state disproportionate share hospital allotment for California under federal law that the department anticipates will be available for the period in question, the department shall reduce the total per diem composite amounts of the various eligible hospitals in the fashion described below so that the allotment in question will not be exceeded.

not to exceed 2 percent of each total per diem composite amount.

taken place.

of the percentage of federal financial participation that normally is applicable for Medi-Cal expenditures for acute inpatient hospital services, and that the level of federal financial participation for the payment adjustment program is expected to continue to remain below that 30-percent level for the next payment adjustment year as a whole, the department shall, as soon as practicable, implement paragraphs (3) and (4).

only with respect to the payments made to that hospital. The department shall recoup from a hospital the amount of any audit exception or federal disallowance in the manner authorized by applicable laws and regulations.

for purposes of any appealable matter that arises under the payment adjustment program. The matters that may be appealed shall be limited to those related to the following:

(A) Paragraph (5) of subdivision (f).

(B) State audit disallowances of amounts paid to hospitals under the payment adjustment program.

(A) That well-baby (nursery) days and acute administrative days are included in the payment adjustment program in the same fashion as all other Medi-Cal days of acute inpatient hospital service.

(B) That, to the same extent as any other Medi-Cal days of acute inpatient hospital service, well-baby (nursery) days and acute administrative days are included as payable days under the payment adjustment program and in the total of annualized Medi-Cal inpatient paid days.

(C) That, if pursuant to paragraph (2), any well-baby (nursery) days or acute administrative days are not included in the payment adjustment program for payment purposes for any parts of the 1992–93 or 1993–94 payment adjustment years, all those days are nevertheless included in the total of annualized Medi-Cal inpatient paid days for all purposes under the

payment adjustment program, unless otherwise barred by paragraph (2).

be determined as follows:

instituted by the Health Care Financing Administration in connection with Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations.

year. This final allotment is two billion one hundred ninety-one million four hundred fifty-one thousand dollars ($2,191,451,000), as specified on page 22676 of Volume 59 of the Federal Register.

with paragraph (3).

all hospitals used in the calculations regarding transfer amounts under subdivision (h) of Section 14163 for the 1993–94 state fiscal year, not including the supplemental lump-sum payments described in this subdivision.

hospital in operation as of June 30, 1994.

a supplemental lump-sum payment adjustment, which shall be payable as a result of the hospital being a disproportionate share hospital in operation as of that date.

federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations.

transfer amounts under subdivision (h) of Section 14163 for the 1994–95 state fiscal year, not including the supplemental lump-sum payments described in this subdivision.

each hospital under subparagraph (C) shall be multiplied by the positive remainder calculated under subparagraph (C) of paragraph (2).

the department shall comply with any procedures instituted by the Health Care Financing Administration in connection with Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations.

paragraph (2) of subdivision (l).

remainder determined under paragraph (4) shall be added to the amount determined under paragraph (2). The total of those two amounts shall be the unadjusted tentative size of the payment adjustment program for the 1995–96 payment adjustment year.

figure derived under subparagraph (A) shall be applied to the total per diem composite amount for each eligible hospital, yielding an adjusted total per diem composite amount for each hospital for the 1995–96 payment adjustment year.

(ii) The amount computed for each hospital under clause (i) shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital.

(iii) Where the amount computed under clause (i) for the particular hospital is less than the OBRA 1993 payment

limitation for the hospital, the amount computed under clause (i) shall be used for purposes of clause (v).

(iv) Where the amount computed under clause (i) for the particular hospital exceeds the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) shall be reduced to an amount equal to the OBRA 1993 payment limitation for the particular hospital. The amount as so reduced shall be used for purposes of clause (v).

(D) The adjusted figures computed for all eligible hospitals under subparagraph (C) shall be added together, yielding the adjusted tentative size of the

payment adjustment program for the 1995–96 payment adjustment year.

hospital, as determined under subparagraph (C) of paragraph (6), shall be identified.

the positive remainder amount, which shall be payable because the facility is a disproportionate share hospital in operation as of June 30, 1996.

secondary supplemental payment adjustments available pursuant to this paragraph shall be calculated as follows:

(ii) The total amount of all supplemental lump-sum payment adjustments, whether paid or payable, as determined under subparagraph (C) of paragraph (8), shall be identified.

(iii) The department shall estimate the total amount of payment adjustments under this section that it anticipates will be applicable to the period July 1, 1996, through September 30, 1996. The applicability of the payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules,

including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations.

(iv) The department shall identify the amount of the final maximum state disproportionate share hospital allotment for California for the 1996 federal fiscal year under applicable federal rules. The amount identified shall not exceed two billion one hundred ninety-one million four hundred fifty-one thousand dollars ($2,191,451,000).

(B) The maximum amount available for secondary supplemental payment adjustments, as identified under clause (v) of subparagraph (A), shall be distributed to eligible hospitals as follows:

(ii) For purposes of secondary supplemental payment adjustments, the eligible hospitals shall be classified into various groups. No hospital may qualify for more than one of

these groups. Notwithstanding subclause (II), the hospitals described in subparagraph (C) shall not be included in any of these groups. The following groups of hospitals shall be recognized:

(I) “State of California hospitals,” which shall include all eligible hospitals that, as of July 1, 1995, were licensed to the State of California or to the University of California.

(II) “County hospitals,” which shall include all eligible hospitals that, as of July 1, 1995, were licensed to a county or a city and county, but shall exclude those hospitals referred to in subparagraph (C).

(III) “Other public hospitals,” which shall include all eligible hospitals that, as of July 1, 1995, were licensed to a local hospital district, a local health authority, a city, or any other noncounty political subdivision of the state.

(IV) “Children’s hospitals,” which shall include all eligible hospitals that, as of July 1, 1995, were included in the children’s hospital group under subdivision (h).

(V) “Other nonpublic hospitals,” which shall include all eligible hospitals that are not included in any group described in subclauses (I) through (IV).

(iii) The amount determined to be the maximum amount of secondary supplemental payment adjustments under clause (v) of subparagraph (A) shall first be allocated among the groups of hospitals referred to in clause (ii), as follows:

(I) “State of California hospitals”: 64.35 percent of the maximum amount.

(II) “County hospitals”: 18.095 percent of the maximum amount.

(III) “Other public hospitals”: 0.65 percent of the maximum amount.

(IV) “Children’s hospitals”: 6.755 percent of the maximum amount.

(V) “Other nonpublic hospitals”: 10.15 percent of the maximum amount.

(iv) (I) The amount of funds allocated pursuant to clause (iii) to each of the particular groups of hospitals referred to in clauses (ii) and (iii) shall then be distributed as secondary supplemental payment adjustments among the eligible hospitals within each particular group. The secondary supplemental distributions shall be made on a descending pro rata basis within each group. Each cycle of the descending pro rata distribution shall be considered to be a phase of the process. As described in subclauses (II) to (V), inclusive, in

each phase of the descending pro rata distribution, the pro rata share of the distribution to each hospital that remains eligible to receive additional distributions shall be computed based on the ratio of the total payment adjustments that the particular hospital has already earned under the payment adjustment program for the 1995–96 payment adjustment year, as compared to the total payment adjustments already earned by the other hospitals in the particular group that remain eligible to receive the additional distributions.

(II) For the first phase, the total amount of payment adjustments under this section for the 1995–96 payment adjustment year, including all per diem payment adjustments and all supplemental lump-sum payment adjustments, that are determined by the department as already being paid or payable to each hospital eligible for the distribution shall be determined.

(III) The figures determined under subclause (II) for each hospital in the particular group shall be added together to determine an aggregate total.

(IV) The figures determined for each hospital under subclause (II) shall be divided by the aggregate total determined under subclause (III), yielding a percentage figure for each hospital.

(V) The percentage figure determined for each hospital under subclause (IV) shall be applied to the maximum portion of the funds allocated to the particular group under clause (iii) that can be distributed in the particular phase until a hospital in the particular group reaches the limitation set forth in clause (v).

(I) The secondary supplemental payment adjustment would cause the total of all payment adjustments to the hospital under this section relating to the 1995–96 payment adjustment year to exceed the amount that is the product of multiplying 0.95 times the particular hospital’s OBRA 1993 payment limitation for the 1995–96 payment adjustment year, as computed by the department in accordance with applicable provisions of the Medi-Cal State Plan.

(II) Without regard to any secondary supplemental payment adjustment, the hospital has already received or has earned payment adjustments relating to the 1995–96 payment adjustment year that equal or exceed the product referred to in subclause (I).

(vi) Any secondary supplemental payment adjustment amount, or portion thereof, that otherwise would have been payable to a particular

hospital under this paragraph, but that is barred by the limitation described in clause (v), shall be distributed by the department through additional phases of the descending pro rata distribution process to those hospitals within the same group, as set forth in clauses (ii) and (iii), as the particular hospital. For each additional phase, the mathematical steps referred to in subclauses (II) to (V), inclusive, of clause (iv) shall be repeated for those hospitals that have not reached the limitation set forth in clause (v). The phases shall continue until the funds allocated to the particular group under clause (iii) have been fully exhausted. No such distribution, however, shall be in an amount that would cause any hospital to exceed the limitation set forth in clause (v).

(C) Notwithstanding any other provision of law, prior to the allocation or distribution of any secondary supplemental payment adjustments, hospitals that, as of July 1,

1995, were part of a county-operated health system of three or more eligible hospitals licensed to the county, shall be deemed to have reached the limitations on total payments described in subclause (II) of clause (v) of subparagraph (B). Data regarding payment adjustments earned by these hospitals with respect to the 1995–96 payment adjustment year, whether paid or payable, shall be included in the computations under subparagraph (A), but excluded from the computations under subparagraph (B).

(D) The department shall make payments of the secondary supplemental payment adjustments to hospitals on or before November 30, 1996.

department for the 1995–96 payment adjustment year, shall be the maximum size of the payment adjustment program for the 1995–96 payment adjustment year.

respect to the period October 1, 1994, through June 30, 1995, shall be treated as involving 1.4 days for purposes of payment adjustments with respect to this period of time. As a result, each per diem payment adjustment amount otherwise payable to the hospital in connection with these days shall be increased by 40 percent. The Medi-Cal days in question shall be treated as involving 1.4 days toward the maximum limit set forth in paragraph (2) of subdivision (l). The Medi-Cal days in question shall be treated as involving 1.0 days for purposes of determining the hospital’s annualized Medi-Cal inpatient paid days for the next applicable payment adjustment year.

(B) For the 1994–95 payment adjustment year, no eligible hospital shall receive total payment adjustments, including per diem payment adjustment amounts and any supplemental lump-sum payment adjustment amounts, in excess of the projected total payment adjustment amounts that were

computed or recomputed, as applicable, for the hospital by the department with respect to the 1994–95 payment adjustment year. For each hospital, this maximum figure shall not exceed the sum of the following two components:

(ii) The amount calculated by the department as the hospital’s pro rata share (based on the figures for all hospitals computed under clause (i)) of the remainder determined by subtracting (I) the sum of the figures computed for all hospitals under clause (i) from (II) the final maximum state disproportionate share hospital allotment for California under applicable federal rules for the 1995 federal fiscal year.

(C) Any payment adjustment amount that otherwise would be payable to a hospital, but that is barred by subparagraph (B), shall be withheld or recouped by the department and distributed on a descending pro rata basis as part of the supplemental lump-sum distribution described in subdivision (w) to those hospitals that have not reached their maximum figures as described in subparagraph (B).

hospital in connection with these days shall be increased by 40 percent. The Medi-Cal days in question shall be treated as involving 1.4 days toward the maximum limit set forth in paragraph (2) of subdivision (l). The Medi-Cal days in question shall be treated as involving 1.0 days for purposes of determining the hospital’s annualized Medi-Cal inpatient paid days for the next applicable payment adjustment year.

subdivision (y).

(aa) (1) For the 1996–97 payment adjustment year, each eligible hospital that remains in operation as of June 30, 1997, shall also be eligible to

receive a supplemental lump-sum payment adjustment, that shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date. The availability of supplemental lump-sum payment adjustments under this paragraph shall be determined by the department as follows:

section, whether paid or payable, that are applicable to the period July 1, 1996, through June 30, 1997, shall be determined for each hospital. The applicability of the per diem payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations.

supplemental lump-sum payment adjustments under this paragraph on or before September 30, 1997.

(ab) (1) For the 1997–98 payment adjustment year, eligible hospitals that meet the requirements of this subdivision and that remain in operation as of September 30, 1997, shall be eligible to receive a special supplemental payment adjustment, which shall be payable as a result of the facility being a

disproportionate share hospital in operation as of that date. For purposes of federal medicaid rules, including Section 447.297(d) of Title 42 of the Code of Federal Regulations, the special supplemental payment adjustments shall be applicable to the federal fiscal year that ends on September 30, 1997.

fiscal year, whether paid or payable, shall be determined. The applicability of per diem payment adjustment amounts and supplemental payment adjustments of all types to the 1997 federal fiscal year shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations.

the two groups specified in clauses (i) and (ii) shall be eligible to receive the supplemental payment adjustments, and no hospital may qualify for more than one of the two groups. The following groups of hospitals shall be recognized:

(ii) “Nonpublic hospitals,” which shall include all eligible hospitals that, as of July 1, 1997, met the definition of a nonpublic hospital.

(B) The amount determined to be the maximum amount of special supplemental payment adjustments under subparagraph (C) of paragraph (2) shall first be allocated between the two groups of hospitals referred to in subparagraph (A) as follows:

hospitals”: 74.885 percent of the maximum amount.

(ii) “Nonpublic hospitals”: 25.115 percent of the maximum amount.

(C) The amount of funds allocated pursuant to subparagraph (B) to each of the particular groups of hospitals referred to in subparagraphs (A) and (B) shall then be distributed as special supplemental payment adjustments among the eligible hospitals within each particular group as follows:

under paragraph (2) of subdivision (l). For purposes of this clause, the determinations shall be without regard to the OBRA 1993 payment limitations.

(ii) The amount computed under clause (i) for each hospital described in subparagraph (A) shall be compared to the amount that is the product of multiplying 0.95 times the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the 1997–98 payment adjustment year.

(iii) Where the amount computed under clause (i) for the particular hospital is equal to or exceeds the product computed for the hospital under clause (ii), the hospital shall not receive a special supplemental payment adjustment. Data regarding hospitals that have reached this limitation shall not be used for purposes of clauses (v) through (viii).

(iv) Where the amount computed under clause (i) for the particular hospital is less than the product computed for the hospital under clause (ii), the amount computed under clause (i) for the hospital shall be used for purposes of clauses (v) through (viii).

(vi) The figures determined for each hospital under clause (iv) shall be divided by the aggregate total determined under clause (v) for the particular group, yielding a percentage figure for each hospital.

(vii) The percentage figure determined for each hospital under clause (vi) shall be applied to the maximum portion of the funds allocated to

the particular group under subparagraph (B), to determine the hospital’s pro rata share of the special supplemental lump-sum payment adjustments. Except, however, in the case of a nonpublic hospital that, as of July 1, 1997, meets the definition of a children’s hospital, such pro rata share otherwise determined shall be multiplied by a factor of 1.09, yielding a modified pro rata share. The pro rata share for the other nonpublic hospitals shall be reduced accordingly, yielding a modified pro rata share, so that the maximum portion of the funds allocated to the nonpublic hospitals group will not be exceeded. The pro rata share or modified pro rata share, as applicable, for each hospital, as computed under this clause, shall also be used for all purposes relating to descending pro rata distributions under clause (viii).

(viii) In no event shall a hospital receive special supplemental payment adjustment amounts in excess of the difference between

the product computed for the hospital under clause (ii) and the amount computed for the hospital under clause (i). Any special supplemental payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals within the same group.

(D) The department shall make interim and final payments of the special supplemental payment adjustments to hospitals on or before February 28, 1998.

(ac) Notwithstanding any other provision of law, the payment

adjustment program with respect to the period October 1, 1997 through June 30, 1998, shall be structured as set forth below and in subdivisions (ad) and (af). However, if the effective date of the Medi-Cal State Plan amendment relating to this subdivision is later than October 1, 1997, as approved by the federal Health Care Financing Administration, all references in this subdivision to the period October 1, 1997, through June 30, 1998, shall be references to the period that commences on that effective date and continues through June 30, 1998.

subparagraph (A) shall be used for purposes of subparagraph (E).

by multiplying the amount by an identical percentage, yielding the hospital’s tentative adjusted projected total payment adjustment amount for the 1997–98 payment adjustment year. The identical percentage figure to be used for this purpose shall be that percentage that is derived by dividing the amount set forth in paragraph (2) by the aggregate sum determined under subparagraph (E) of paragraph (1). Except, however, the amount determined for a hospital under subparagraph (C) or (D) of paragraph (1) shall not be increased if it would exceed the OBRA 1993 payment limitation for the hospital.

1997, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic-converted hospital adjustment factor.” The applicable adjustment factor shall be that which is necessary to result in an amount, for each hospital, equal to the amount used for the particular hospital under subparagraph (E) of paragraph (1). The amount so adjusted shall be used for purposes of clause (iii).

(ii) The total amount of all per diem payment adjustment amounts under this section, whether paid or payable, applicable to the period July 1, 1997, through September 30, 1997, shall be determined for each hospital referred to in clause (i). The applicability of the per diem payment adjustment amounts to the period July 1, 1997, through September 30, 1997, shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. However, if the

effective date of the Medi-Cal State Plan amendment relating to this subdivision is later than October 1, 1997, as approved by the federal Health Care Financing Administration, all determinations under this clause shall include per diem payment adjustment amounts applicable to the period July 1, 1997, through the date that is one day prior to that effective date.

(iii) The amount determined for each hospital under clause (i) shall be reduced by the amount determined under clause (ii) for the hospital. The resulting figure shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 1997, through June 30, 1998, which shall be paid to the hospital in accordance with paragraph (5).

adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic hospital adjustment factor.” The applicable adjustment factor shall be derived as follows:

(II) The amount identified in paragraph (2) shall be divided by 2.38. The resulting figure shall then be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clauses (ii) and (iii) of subparagraph (A).

(III) The amount computed under subclause (II) shall be divided by 2, and the result thereof further reduced by the amount of thirty-seven million five hundred thousand dollars ($37,500,000).

(IV) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (III) by the amount derived in subclause (I).

(ii) The total amount of all per diem payment adjustment amounts under this section, whether paid or payable, applicable to the period July 1, 1997, through September 30, 1997, shall be determined for each hospital referred to in clause (i). The applicability of the per diem payment adjustment amounts to the period July 1, 1997, through September 30, 1997, shall be determined in accordance with federal medicaid rules including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. However, if the effective date of the Medi-Cal State Plan amendment relating to this subdivision is later than October 1, 1997, as approved by the federal Health Care Financing Administration, all determinations under this

clause shall include per diem payment adjustment amounts applicable to the period July 1, 1997, through the date that is one day prior to that effective date.

(iii) The amount determined for each hospital under clause (i) shall be reduced by the amount determined under clause (ii) for the hospital. The resulting figure shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 1997, through June 30, 1998, which shall be paid to the hospital in accordance with paragraph (5).

(II) The amount identified in paragraph (2) shall be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clauses (ii) and (iii) of subparagraph (A) and the sum of the amounts determined for all nonpublic hospitals under clauses (ii) and (iii) of subparagraph (B).

(III) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (II) by the amount derived in subclause (I).

(ii) The total amount of all per diem payment adjustment amounts under this section, whether paid or payable, applicable to the period

July 1, 1997, through September 30, 1997, shall be determined for each hospital referred to in clause (i). The applicability of the per diem payment adjustment amounts to the period July 1, 1997, through September 30, 1997, shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. However, if the effective date of the Medi-Cal State Plan amendment relating to this subdivision is later than October 1, 1997, as approved by the federal Health Care Financing Administration, all determinations under this clause shall include per diem payment adjustment amounts applicable to the period July 1, 1997, through the date that is one day prior to that effective date.

(iii) The amount determined for each hospital under clause (i) shall be reduced by the amount determined under clause (ii) for the hospital. The resulting figure shall be the final adjusted

projected total payment adjustment amount for the hospital for the period October 1, 1997, through June 30, 1998, which shall be paid to the hospital in accordance with paragraph (5).

this subdivision, and any supplemental payments under subdivision (ab) or (ad), in excess of the hospital’s OBRA 1993 payment limitation as computed by the department pursuant to the Medi-Cal State Plan. No hospital shall receive any special supplemental payment adjustments or supplemental lump-sum payment adjustments to the extent the payments would be inconsistent with subdivision (ab) or (ad), respectively.

exclusive of the special supplemental payment adjustments provided for under subdivision (ab) and the supplemental lump-sum payment adjustments provided for under subdivision (ad).

(ad) (1) For the 1997–98 payment adjustment year, eligible hospitals that meet the requirements of this subdivision and that remain in operation as of June 30, 1998, shall be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date, but only if the hospital has remained in operation for the period October 1, 1997, to June 30, 1998, inclusive.

(ii) “Nonpublic hospitals,” which shall include all eligible hospitals that, as of

July 1, 1997, met the definition of a nonpublic hospital.

(B) The amount of supplemental lump-sum payment adjustments as referred to in paragraph (2) shall first be allocated between the two groups of hospitals referred to in subparagraph (A) as follows:

(ii) “Nonpublic hospitals”: 27.83 percent of the amount.

(C) The amount of funds allocated pursuant to subparagraph (B) to each of the particular groups of hospitals referred to in subparagraphs (A) and (B) shall then be distributed as supplemental lump-sum payment adjustments among the eligible hospitals within each particular group as follows:

eligible hospital the total amount of payment adjustments under this section (exclusive of any payments under this subdivision and subdivision (af)) applicable to the 1997–98 payment adjustment year, whether paid or payable. The applicability of the payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations.

(ii) The amount identified for each hospital under clause (i) shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the 1997–98 payment adjustment year.

(iii) Where the amount computed under clause (i) for the particular hospital is equal to or exceeds the OBRA 1993 payment limitation for the

hospital, the hospital shall not receive a supplemental lump-sum payment adjustment. Data regarding hospitals that have reached this limitation shall not be used for purposes of clauses (v) through (viii).

(iv) Where the amount computed under clause (i) for the particular hospital is less than the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) minus that amount paid or payable to the hospital under subdivision (ab) shall be used for purposes of clauses (v) through (viii).

(vi) The figures determined for each hospital under clause (iv) shall be divided by the aggregate total determined under clause (v) for the particular

group, yielding a percentage figure for each hospital.

(vii) The percentage figure determined for each hospital under clause (vi) shall be applied to the maximum portion of the funds allocated to the particular group under subparagraph (B), to determine the hospital’s pro rata share of the supplemental lump-sum payment adjustments. Except, however, in the case of a nonpublic hospital that, as of July 1, 1997, meets the definition of a children’s hospital, the pro rata share otherwise determined shall be multiplied by a factor of 1.09, yielding a modified pro rata share. The pro rata share for the other nonpublic hospitals shall be reduced accordingly, yielding a modified pro rata share, so that the maximum portion of the funds allocated to the nonpublic hospitals group will not be exceeded. The pro rata share or modified pro rata share, as applicable, for each hospital, as computed under this clause, shall also be used for all purposes relating

to descending pro rata distributions under clause (viii).

(viii) In no event shall a hospital receive supplemental lump-sum payment adjustment amounts in excess of the difference between the OBRA 1993 payment limitation for the hospital and the amount computed for the hospital under clause (i). Any supplemental lump-sum payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals within the same group.

(D) The department shall make interim and final payments of the supplemental lump-sum payment adjustments to hospitals on or before August 15, 1998.

the Medi-Cal State Plan, and only if the department determines that federal financial participation is available.

(ae) (1) In the event that any provision of subdivision (ab), (ac), or (ad), as reflected in a proposed Medi-Cal State Plan amendment, is not approved by the federal Health Care Financing Administration, the director shall modify the proposed Medi-Cal State Plan amendment in a manner intended to be consistent with all applicable federal requirements. Subject to the requirements of federal law, in developing the modified proposed Medi-Cal State Plan amendment, the director shall, to the extent practicable, incorporate,

implement, and modify, as necessary, the payment methodologies applicable to the 1997–98 payment adjustment year in a manner that is as consistent as possible with the approach and intent of subdivisions (ab), (ac), and (ad), respectively.

with the approach and intent of subdivisions (af), (ag), (ah), (ai), and (aj), respectively.

possible with the approach and intent of subdivisions (ak), (al), (am), and (an), respectively.

(af) (1) The provisions of this subdivision shall apply for the 1997–98 payment adjustment year, and, for all purposes under the program, shall be implemented subsequent to the provisions of subdivisions (ab), (ac), and (ad). Under this subdivision, eligible hospitals that, as of October 1, 1997, were part of a county-operated health system of three or more eligible hospitals licensed to the county, and that are in operation as of June 30, 1998, shall be eligible to receive an additional supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date, but only if the hospital has remained in operation for the period October 1, 1997, through June 30, 1998.

subparagraph (A) shall be used for purposes of subparagraphs (E) through (H).

hospital receive additional supplemental lump-sum payment adjustment amounts in excess of the difference between the OBRA 1993 payment limitation for the hospital and the amount computed for the hospital under subparagraph (A). Any additional supplemental lump-sum payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals eligible for distributions under this subdivision that have not reached their OBRA 1993 payment limitation.

State Plan, and only to the extent that the department determines that federal financial participation is available.

(ag) Notwithstanding any other provision of law, the payment adjustment program for the 1998–99 payment adjustment year shall be structured as set forth below and in subdivision (ah).

of a county-operated health system of three or more eligible hospitals licensed to the county, the projected total payment adjustment amount shall be reduced by an amount equal to the amount paid or payable to the hospital under subdivision (af).

respect to a public hospital that, as of July 1, 1998, is part of a county-operated health system of three or more eligible hospitals licensed to the county, the amount as so reduced shall be increased by an amount equal to the amount paid or payable to the hospital under subdivision (af), and used for purposes of subparagraph (E).

percentage, yielding the hospital’s tentative adjusted projected total payment adjustment amount for the 1998–99 payment adjustment year. The identical percentage figure to be used for this purpose shall be that percentage that is derived by dividing the amount set forth in paragraph (2) by the aggregate sum determined under subparagraph (E) of paragraph (1). Except, however, the amount determined for a hospital under subparagraph (C) or (D) of paragraph (1), as applicable, shall not be increased so that it would exceed the OBRA 1993 payment limitation for the hospital, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the tentative adjusted projected total payment adjustment amounts for all hospitals equals the amount set forth in paragraph (2).

(ii) Notwithstanding clause (i), all other computations under subparagraph (A), including the determination of the hospital’s pro rata share of any reallocations, shall be made as though the reduction described in clause (i) had not occurred.

be further adjusted as follows:

(ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the 1998–99 payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5).

definition of a converted hospital as of July 1, 1998, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “converted hospital adjustment factor.” The applicable adjustment factor shall be that which is necessary to result for each such hospital in an amount equal to:

(ii) The resulting product shall be the final adjusted projected total

payment adjustment amount for the hospital for the 1998–99 payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5).

(II) The amount identified in paragraph (2) shall be divided by 2.347. The resulting figure shall then be reduced by the sum of the amounts determined for all

nonpublic-converted hospitals under clause (ii) of subparagraph (A) and the amounts determined for all converted hospitals under clause (ii) of subparagraph (B).

(III) The amount computed under subclause (II) shall be divided by 2, and the result thereof further reduced by the amount of thirty-seven million five hundred thousand dollars ($37,500,000).

(IV) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (III) by the amount derived in subclause (I).

(ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the 1998–99 payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5). Except, however, in no case shall the final adjusted projected total payment

adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other nonpublic hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all nonpublic hospitals equals the amount derived in subclause (III) of clause (i).

determined under paragraph (3) for each public hospital described above shall be added together.

(II) The amount identified in paragraph (2) shall be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A), the amounts determined for all converted hospitals under clause (ii) of subparagraph (B) and the amounts determined for all nonpublic hospitals under clause (ii) of subparagraph (C).

(III) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (II) by the amount derived in subclause (I).

(ii) The product determined for each hospital under clause (i) shall be further adjusted as follows:

necessary so as not to exceed the hospital’s OBRA 1993 payment limitation.

(II) With respect to a public hospital that, as of July 1, 1998, is part of a county-operated health system of three or more eligible hospitals licensed to the county, the product shall, prior to the application of subclause (I), be reduced by an amount equal to the amount paid or payable to the hospital under subdivision (af).

(III) Any amounts that would otherwise have been allocated to a hospital but for the hospital’s OBRA 1993 payment limitation as applied under subclause (I) shall be reallocated to all other public hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis. With respect to a public hospital described in subclause (II), the hospital’s pro rata share of any reallocated amounts shall be based on the product derived for the hospital under clause (i).

(IV) The amount determined for each hospital pursuant to subclause (I) and subclause (II), as applicable (including the reduction under subclause (II)), plus any reallocations to the hospital under subclause (III), shall be the final adjusted projected total payment adjustment amount for the hospital for the 1998–99 payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5).

or more eligible hospitals licensed to the county.

(I) The maximum state disproportionate share hospitals allotment for California under the provisions of applicable federal medicaid rules shall be identified for the 1998 federal fiscal year. This maximum allotment is two billion one hundred seventeen million eight hundred ninety-nine thousand six hundred sixty-eight dollars ($2,117,899,668).

(II) The total amount of all payment adjustments under this section (exclusive of any payments under this subparagraph) applicable to the 1998 federal fiscal year, whether paid or payable, shall be determined. The applicability of payment

adjustment amounts to the 1998 federal fiscal year shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations.

(III) The figure determined under subclause (II) shall be subtracted from the figure identified under subclause (I). The positive remainder shall be the maximum amount of payment adjustments payable with respect to the period July 1, 1998, through September 30, 1998, under this subparagraph.

(ii) With respect to an eligible hospital that, as of July 1, 1998, meets the definition of a nonpublic-converted hospital, the maximum amount payable for the period July 1, 1998, through September 30, 1998, shall be equal to the product of the final adjusted projected total payment adjustment amount determined for the hospital pursuant to paragraph (4), multiplied by a fraction that is

computed as follows:

(I) The maximum amount derived in subclause (III) of clause (i) shall be increased by an amount equal to the total amount of payment adjustments paid or payable under subdivision (af).

(II) The figure derived in subclause (I) shall be divided by the amount specified in paragraph (2).

(iii) With respect to an eligible hospital that, as of July 1, 1998, meets the definition of a converted hospital, the maximum amount payable for the period July 1, 1998, through September 30, 1998, shall be equal to the product of the final adjusted projected total payment adjustment amount determined for the hospital pursuant to paragraph (4), multiplied by a fraction that is computed as follows:

(I) The maximum amount derived in subclause (III) of

clause (i) shall be increased by an amount equal to the total amount of payment adjustments paid or payable under subdivision (af).

(II) The figure derived in subclause (I) shall be divided by the amount specified in paragraph (2).

(iv) With respect to an eligible hospital that, as of July 1, 1998, meets the definition of a nonpublic hospital, the maximum amount payable for the period July 1, 1998, through September 30, 1998, shall be equal to the product of the final adjusted projected total payment adjustment amount determined for the hospital pursuant to paragraph (4), multiplied by a fraction that is computed as follows:

(I) The maximum amount derived in subclause (III) of clause (i) shall be increased by an amount equal to the total amount of payment adjustments paid or payable under subdivision (af).

(II) The figure derived in subclause (I) shall be divided by the amount specified in paragraph (2).

(I) The maximum amount derived in subclause (III) of clause (i) shall be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clause (ii), the amounts determined for all converted hospitals under clause (iii) and the amounts determined for all nonpublic hospitals under clause (iv).

(II) The amounts computed under paragraph (4) with respect to all public hospitals that are subject to this subparagraph (A) shall be added together, yielding an aggregate sum.

(III) The figure derived in subclause (I) shall be divided by the aggregate sum derived in subclause (II).

(vi) The resulting product determined for each hospital pursuant to clauses (ii) through (v), as applicable, shall be distributed to the hospital in three equal installments, each payable as of the last day of each month from July 1998 through September 1998. However, no hospital shall receive an installment for any month in which the hospital does not remain in operation for the entire month. To the extent that any hospital is not entitled to receive an installment that otherwise would be payable but for the hospital’s failure to remain in

operation through the last day of a particular month, the amount that would have been paid to the hospital shall be redistributed among those hospitals within the same hospital group (as those groups are described in clauses (ii) through (v)) that remain in operation from July 1, 1998, through September 30, 1998, to be distributed on a pro rata basis. The redistributed amounts shall be payable as of September 30, 1998.

(B) (i) With respect to the period October 1, 1998, through June 30, 1999, payment adjustment amounts shall be payable to each eligible hospital in the amount equal to the final adjusted projected total payment adjustment amount determined for the hospital pursuant to paragraph (4), less any payment adjustments paid or payable to the hospital, or payment adjustments that would have been payable but for the hospital’s failure to remain in operation for a particular month, under subparagraph (A). The payment

adjustments shall be distributed in eight equal amounts, each payable as of the last day of each month from October 1998 through May 1999. However, no hospital shall receive an installment for any month in which the hospital does not remain in operation for the entire month.

(ii) To the extent that any hospital of either of the hospital types described in clause (iv) or (v) of subparagraph (A) is not entitled to receive an installment that otherwise would be payable but for the hospital’s failure to remain in operation through the last day of a particular month, the amount that would have been paid to the hospital shall be redistributed among those hospitals of the same hospital type that remain in operation from October 1, 1998, through June 30, 1999, to be distributed on a pro rata basis. The redistributed amounts shall be payable as of June 30, 1999.

(iii) With respect to a

public hospital that, as of July 1, 1998, is part of a county-operated health system of three or more eligible hospitals licensed to the county, the hospital’s pro rata share of any reallocations under clause (ii) shall be based on the final adjusted projected total payment adjustment amount determined for the hospital pursuant to paragraph (4), as increased by an amount equal to the amount paid or payable to the hospital under subdivision (af).

of the payment adjustment program for the 1998–99 payment adjustment year, exclusive of the supplemental payment adjustments provided for under subdivision (ah).

(ah) (1) For the 1998–99 payment adjustment year, eligible hospitals that meet the requirements of this subdivision and that are in operation as of June 30, 1999, shall be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date, but only if the hospital has remained in operation for the period October 1, 1998, through June 30, 1999.

including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations.

recognized:

(ii) “Nonpublic hospitals,” which shall include all eligible hospitals that, as of July 1, 1998, met the definition of a nonpublic hospital.

(B) The amount determined to be the maximum amount of supplemental lump-sum payment adjustments under subparagraph (C) of paragraph (2) shall first be allocated between the two groups of hospitals referred to in subparagraph (A) as follows:

(ii) “Nonpublic hospitals”: 27.22 percent of the maximum amount.

(C) The amount of funds allocated pursuant to subparagraph (B) to each of the particular groups of hospitals referred to in subparagraphs (A) and (B) shall then be distributed as supplemental lump-sum payment adjustments among the eligible hospitals within each particular group as follows:

(ii) The amount identified for each hospital under clause (i)

shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the 1998–99 payment adjustment year.

(iii) Where the amount computed under clause (i) for the particular hospital is equal to or exceeds the OBRA 1993 payment limitation for the hospital, the hospital shall not receive a supplemental lump-sum payment adjustment. Data regarding hospitals that have reached this limitation shall not be used for purposes of clauses (v) through (viii).

(iv) Where the amount computed under clause (i) for the particular hospital is less than the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) shall be used for purposes of clauses (v) through (viii). Except, however, with respect to a public hospital that, as of July 1, 1998, was part

of a county-operated health system of three or more eligible hospitals licensed to the county, the amount computed under clause (i) plus the amounts paid or payable to the hospital pursuant to subdivision (af) shall be used for purposes of clauses (v) through (vii), while the amount computed under clause (i) only shall be used for purposes of applying the limitation described in clause (viii).

(vi) The figures determined for each hospital under clause (iv) shall be divided by the aggregate total determined under clause (v) for the particular group, yielding a percentage figure for each hospital.

(vii) The percentage figure determined for each hospital under

clause (vi) shall be applied to the maximum portion of the funds allocated to the particular group under subparagraph (B), to determine the hospital’s pro rata share of the supplemental lump-sum payment adjustments. Except, however, in the case of a nonpublic hospital that, as of July 1, 1998, met the definition of a children’s hospital, the pro rata share otherwise determined shall be multiplied by a factor of 1.09, yielding a modified pro rata share. The pro rata share for the other nonpublic hospitals shall be reduced accordingly, yielding a modified pro rata share, so that the maximum portion of the funds allocated to the nonpublic hospitals group will not be exceeded. The pro rata share or modified pro rata share, as applicable, for each hospital, as computed under this clause, shall also be used for all purposes relating to descending pro rata distributions under clause (viii).

(viii) In no event shall a hospital receive supplemental

lump-sum payment adjustment amounts in excess of the difference between the OBRA 1993 payment limitation for the hospital and the amount computed for the hospital under clause (i). Any supplemental lump-sum payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals within the same group.

(D) The department shall make interim and final payments of the supplemental lump-sum payment adjustments to hospitals on or before August 15, 1999.

(ai) Notwithstanding any other provision of law, no payment adjustment amounts shall be payable in connection with the period of July 1 through September 30 of the 1999–2000 payment adjustment year. The payment adjustment program with respect to the period October 1, 1999, through June 30, 2000, shall be structured as set forth below and in subdivision (aj).

subparagraph (A) shall be used for purposes of subparagraph (E).

paragraph (1), as applicable, by multiplying the amount by an identical percentage, yielding the hospital’s tentative adjusted projected total payment adjustment amount for the period October 1, 1999, through June 30, 2000. The identical percentage figure to be used for this purpose shall be that percentage that is derived by dividing the amount set forth in paragraph (2) by the aggregate sum determined under subparagraph (E) of paragraph (1). Except, however, the amount determined for a hospital under subparagraphs (C) or (D) of paragraph (1) shall not be increased so that it would exceed the OBRA 1993 payment limitation for the hospital, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the tentative adjusted projected total payment adjustment amount for all hospitals equals the amount set

forth in paragraph (2).

(ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 1999,

through June 30, 2000, which shall be paid to the hospital in accordance with paragraph (5).

exceed the amount used for the particular hospital under subparagraph (E) of paragraph (1).

(ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 1999, through June 30, 2000, which shall be paid to the hospital in accordance with paragraph (5).

(II) The amount identified in paragraph (2) shall be divided by 2.130. The resulting figure shall then be reduced by the sums of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A) and all converted hospitals under clause (ii) of subparagraph (B).

(III) The amount computed under subclause (II) shall be divided by 2, and the result thereof further reduced by the amount of thirty-seven million five hundred thousand dollars ($37,500,000).

(IV) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (III) by the amount derived in subclause (I).

(ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital

for the period October 1, 1999, through June 30, 2000, which shall be paid to the hospital in accordance with paragraph (5). Except, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other nonpublic hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all nonpublic hospitals equals the amount derived in subclause (III) of clause (i).

factor.” The applicable adjustment factor shall be derived as follows:

(II) The amount identified in paragraph (2) shall be reduced by the sums of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A) and all converted hospitals under clause (ii) of subparagraph (B), and the sum of the amounts determined for all nonpublic hospitals under clause (ii) of subparagraph (C).

(III) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (II) by the amount derived in subclause (I).

(ii) The

resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 1999, through June 30, 2000, which shall be paid to the hospital in accordance with paragraph (5). Except, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other public hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all public hospitals equals the amount derived in subclause (II) of clause (i).

1999, through June 30, 2000, shall be distributed to the hospital in 8 equal installments, each payable as of the last day of each month from October 1999 through May 2000. However, no hospital shall receive an installment for any month in which the hospital does not remain in operation for the entire month.

federal financial participation is available.

(aj) (1) For the 1999–2000 payment adjustment year, eligible hospitals that meet the requirements of this subdivision and that are in operation as of June 30, 2000, shall be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date, but only if the hospital has remained in operation for the period October 1, 1999, through June 30, 2000.

federal fiscal year.

(ii) The positive remainder derived

under clause (i) shall be the maximum amount of supplemental lump-sum payment adjustments under this subdivision where:

(iii) If any element set forth in clause (ii) is not satisfied, the maximum amount of supplemental lump-sum payment adjustments under this subdivision shall be the lesser of:

hundred six million dollars ($106,000,000).

(ii) “Nonpublic hospitals,” which shall include all eligible hospitals that, as of July 1, 1999, met the definition of a nonpublic hospital.

(B) The amount determined to be the

maximum amount of supplemental lump-sum payment adjustments under subparagraph (C) of paragraph (2) shall first be allocated between the two groups of hospitals referred to in subparagraph (A) as follows:

(ii) “Nonpublic hospitals”: 28.36 percent of the maximum amount.

(C) The amount of funds allocated pursuant to subparagraph (B) to each of the particular groups of hospitals referred to in subparagraphs (A) and (B) shall then be distributed as supplemental lump-sum payment adjustments among the eligible hospitals within each particular group as follows:

payments under this subdivision) applicable to the 1999–2000 payment adjustment year, whether paid or payable. The applicability of the payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations.

(ii) The amount identified for each hospital under clause (i) shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the 1999–2000 payment adjustment year. For all purposes under this subdivision, calculations of the OBRA 1993 payment limitations for public hospitals shall not be performed prior to January 1, 2000, as referred to in paragraph (6) of subdivision (ai).

(iii) Where the amount computed under clause

(iv) Where the amount computed under clause (i) for the particular hospital is less than the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) shall be used for purposes of clauses (v) through (viii).

(vi) The figures determined for each hospital under clause (iv) shall be divided by the aggregate total determined under clause (v)

for the particular group, yielding a percentage figure for each hospital.

(vii) The percentage figure determined for each hospital under clause (vi) shall be applied to the maximum portion of the funds allocated to the particular group under subparagraph (B), to determine the hospital’s pro rata share of the supplemental lump-sum payment adjustments. Except, however, in the case of a nonpublic hospital that, as of July 1, 1999, met the definition of a children’s hospital, that pro rata share otherwise determined shall be multiplied by a factor of 1.09, yielding a modified pro rata share. The pro rata share for the other nonpublic hospitals shall be reduced accordingly, yielding a modified pro rata share, so that the maximum portion of the funds allocated to the nonpublic hospitals group will not be exceeded. The pro rata share or modified pro rata share, as applicable, for each hospital, as computed under this clause, shall also be used for all

purposes relating to descending pro rata distributions under clause (viii).

(viii) In no event shall a hospital receive supplemental lump-sum payment adjustment amounts in excess of the difference between the OBRA 1993 payment limitation for the hospital and the amount computed for the hospital under clause (i). Any supplemental lump-sum payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals within the same group.

(D) The department shall make interim and final payments of the supplemental lump-sum payment adjustments to hospitals on or before August 15, 2000.

with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available.

(ak) Notwithstanding any other provision of law, no payment adjustment amounts shall be payable in connection with the period of July 1 through September 30 of the 2000–01 payment adjustment year. The payment adjustment program with respect to the period October 1, 2000, through June 30, 2001, shall be structured as set forth below and in subdivision (al).

paragraph (2) of subdivision (l). For purposes of this subparagraph, these determinations shall be without regard to the OBRA 1993 payment limitations. Notwithstanding the foregoing, with respect to a hospital that, as of July 1, 2000, meets the definition of converted hospital, the amount otherwise determined under this subparagraph shall be reduced as necessary so as not to exceed the total amount of all payment adjustment amounts payable to the hospital under this section for that payment adjustment year in which the hospital was last an eligible hospital meeting the definition of a public hospital.

computed amount referred to in subparagraph (A) for the particular hospital exceeds the OBRA 1993 payment limitation for the hospital, the amount computed under subparagraph (A) shall be reduced to an amount equal to the OBRA 1993 payment limitation for the particular hospital. The amount so reduced shall be used for purposes of subparagraph (E).

2001, exclusive of any supplemental payment adjustments under subdivision (al).

determined under subparagraph (E) of paragraph (1). Notwithstanding the foregoing, however, the amount determined for a hospital under subparagraphs (C) or (D) of paragraph (1) shall not be increased so that it would exceed the OBRA 1993 payment limitation for the hospital, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the tentative adjusted projected total payment adjustment amount for all hospitals equals the amount set forth in paragraph (2).

that meets the definition of a nonpublic-converted hospital as of July 1, 2000, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic-converted hospital adjustment factor.” The applicable adjustment factor for the particular hospital shall be 0.81; except however, where the hospital also meets the definition of a major teaching hospital as of July 1, 2000, the applicable adjustment factor shall be that which is necessary to result in an amount for the particular hospital equal to forty million dollars ($40,000,000).

(ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 2000, through June 30, 2001, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s

OBRA 1993 payment limitation.

(II) The converted hospital adjustment factor shall be that figure derived in subclause (I), expressed as a fraction,

subtracted from 1.00.

(ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 2000, through June 30, 2001, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation.

amounts determined under paragraph (3) for each nonpublic hospital shall be added together.

(II) The amount identified in paragraph (2) shall be divided by 2.1527.

(III) The amount derived under subclause (II) shall be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A), and the sum of the amounts determined for all converted hospitals under clause (ii) of subparagraph (B) that exceed that amount equal to 31 percent of all payment adjustment amounts payable to each converted hospital under this section for that payment adjustment year in which the hospital was last an eligible hospital meeting the definition of a public hospital.

(IV) The amount computed under subclause (III) shall be divided by 2, and the result thereof further reduced by the

amount of thirty-three million five hundred thousand dollars ($33,500,000).

(ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 2000, through June 30, 2001, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other nonpublic hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata

basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all nonpublic hospitals equals the amount derived in subclause (IV) of clause (i).

(II) The amount identified in paragraph (2) shall be reduced by the sums of the amounts determined for all nonpublic-converted hospitals under clause

(ii) of subparagraph (A) and all converted hospitals under clause (ii) of subparagraph (B), and the sum of the amounts determined for all nonpublic hospitals under clause (ii) of subparagraph (C).

(III) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (II) by the amount derived in subclause (I).

(ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 2000, through June 30, 2001, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall

be reallocated to all other public hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all public hospitals equals the amount derived in subclause (II) of clause (i).

entitled to receive an installment that otherwise would be payable but for the hospital’s failure to remain in operation through the last day of a particular month, the amount that would have been paid to the hospital shall be redistributed among those hospitals of the same hospital type that remain in operation from October 1, 2000, through June 30, 2001, to be distributed on a pro rata basis. The redistributed amounts shall be payable as of June 30, 2001.

forth in paragraph (2) shall, in each instance prior to its application in those calculations, be increased by the amount derived in subparagraph (C).

the calculations set forth in clause (i) of subparagraph (D) of paragraph (4) regarding the determination of the applicable public hospital adjustment factor, the initial amount as set forth in paragraph (2) shall, in each instance prior to its application in those calculations, be increased by the amount derived in subparagraph (C).

2000–01 payment adjustment year, exclusive of the supplemental payment adjustments provided for under subdivision (al).

(al) (1) For the 2000–01 payment adjustment year, eligible hospitals that meet the requirements of this subdivision and that are in operation as of June 30, 2001, shall be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date, but only if the hospital has remained in operation for the period October 1, 2000, through June 30, 2001.

under subparagraph (A). If the remainder is a positive figure, supplemental lump-sum payment adjustments shall be made under this subdivision in accordance with this subparagraph and paragraph (3). The positive remainder so derived shall be the maximum amount of supplemental lump-sum payment adjustments under this subdivision.

(ii) “Nonpublic hospitals,” which shall include all eligible hospitals that, as of July 1, 2000, met the definition of a nonpublic hospital.

(B) The amount determined to be the maximum amount of supplemental lump-sum payment adjustments under subparagraph (C) of paragraph (2) shall first be allocated between the two groups of hospitals referred to in subparagraph (A) as follows:

(ii) “Nonpublic hospitals”: 25 percent of the maximum amount.

(C) The amount of funds allocated pursuant to subparagraph (B) to each of the particular groups of hospitals referred to in subparagraphs (A) and (B) shall then be distributed as supplemental

lump-sum payment adjustments among the eligible hospitals within each particular group as follows:

(ii) The amount identified for each hospital under clause (i) shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the 2000–01 payment adjustment year.

(iii) Where the amount computed under clause (i) for the

particular hospital is equal to or exceeds the OBRA 1993 payment limitation for the hospital, the hospital shall not receive a supplemental lump-sum payment adjustment. Data regarding hospitals that have reached this limitation shall not be used for purposes of clauses (v) through (viii).

(iv) Where the amount computed under clause (i) for the particular hospital is less than the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) shall be used for purposes of clauses (v) through (viii).

(vi) The figures determined for each hospital under clause (iv) shall be divided by the aggregate total determined under clause (v) for the

particular group, yielding a percentage figure for each hospital.

(vii) The percentage figure determined for each hospital under clause (vi) shall be applied to the maximum portion of the funds allocated to the particular group under subparagraph (B), to determine the hospital’s pro rata share of the supplemental lump-sum payment adjustments. Notwithstanding the foregoing, however, in the case of a nonpublic hospital that, as of July 1, 2000, met the definition of a children’s hospital, that pro rata share otherwise determined shall be multiplied by a factor of 1.69, yielding a modified pro rata share to be applied only with respect to the first one million dollars ($1,000,000) of the funds allocated pursuant to clause (ii) of subparagraph (B), and, with respect to the remainder of the funds so allocated, the pro rata share otherwise determined shall be multiplied by a factor of 1.09, yielding a modified pro rata share to be applied. The pro

rata share for the other nonpublic hospitals shall be reduced accordingly, yielding a modified pro rata share, so that the maximum portion of the funds allocated to the nonpublic hospitals group will not be exceeded. The pro rata share or modified pro rata share, as applicable, for each hospital, as computed under this clause, shall also be used for all purposes relating to descending pro rata distributions under clause (viii).

(viii) In no event shall a hospital receive supplemental lump-sum payment adjustment amounts in excess of the difference between the OBRA 1993 payment limitation for the hospital and the amount computed for the hospital under clause (i). Any supplemental lump-sum payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals within the same group.

(D) The department shall make interim and final payments of the supplemental lump-sum payment adjustments to hospitals on June 30, 2001.

(am) Notwithstanding any other provision of law, no payment adjustment amounts shall be payable in connection with the period of July 1 through September 30 of the 2001–02 payment adjustment year and subsequent payment adjustment years. The payment adjustment program with respect to the period October 1 through June 30 of the 2001–02 payment adjustment year and subsequent payment adjustment years shall be structured as set forth below and in

subdivision (an).

hospital was last an eligible hospital meeting the definition of a public hospital.

OBRA 1993 payment limitation for the hospital, the computed amount referred to in subparagraph (A) shall be used for purposes of subparagraph (E).

for the period October 1 through June 30 of each applicable payment adjustment year, shall be set at one billion six hundred million dollars ($1,600,000,000), exclusive of any supplemental payment adjustments under subdivision (an).

or (D) of paragraph (1) shall not be increased so that it would exceed the OBRA 1993 payment limitation for the hospital, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the tentative adjusted projected total payment adjustment amount for all hospitals equals the amount set forth in subparagraph (B) of paragraph (2).

tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic-converted hospital adjustment factor.” The applicable adjustment factor for the particular hospital shall be 0.835; except, however, where the hospital also meets the definition of a major teaching hospital as of July 1 of the applicable payment adjustment year, the applicable adjustment factor shall be the lesser of 1.00, or that which is necessary to result in an amount for the particular hospital equal to thirty-five million eight hundred thousand dollars ($35,800,000).

(ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1 through June 30 of the applicable payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment

amount exceed the hospital’s OBRA 1993 payment limitation.

(II) The converted hospital adjustment factor shall be

that figure derived in subclause (I), expressed as a fraction, subtracted from 1.00.

(ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1 through June 30 of the applicable payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation.

(II) The amount identified in subparagraph (B) of paragraph (2) shall be divided by 2.237.

(III) The resulting figure in subclause (II) shall be increased by an amount equal to the product of the medical assistance increment multiplied by the maximum amount identified in subparagraph (A) of paragraph (2).

(IV) The amount derived under subclause (III) shall be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A), and the sum of the amounts determined for all converted hospitals under clause (ii) of subparagraph (B) that exceed that amount

equal to 31 percent of all payment adjustment amounts payable to each converted hospital under this section for that payment adjustment year in which the hospital was last an eligible hospital meeting the definition of a public hospital.

(VI) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (V) by the amount derived in subclause (I).

(ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1 through June 30 of the applicable payment adjustment year, which shall be paid to the hospital in

accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other nonpublic hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all nonpublic hospitals equals the amount derived in subclause (V) of clause (i).

shall be derived as follows:

(II) The amount identified in subparagraph (B) of paragraph (2) shall be reduced by the sums of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A) and all converted hospitals under clause (ii) of subparagraph (B) and the sum of the amounts determined for all nonpublic hospitals under clause (ii) of subparagraph (C).

(III) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (II) by the amount derived in subclause (I).

(ii) The resulting product shall be

the final adjusted projected total payment adjustment amount for the hospital for the period October 1 through June 30 of the applicable payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other public hospitals that have not reached their OBRA 1993 payment limitation on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all public hospitals equals the amount derived in subclause (II) of clause (i).

the period October 1 through June 30 of the applicable payment adjustment year shall be distributed to the hospital in 8 equal installments, each payable as of the last day of each month from October through May of the applicable payment adjustment year. However, no hospital shall receive an installment for any month in which the hospital does not remain in operation for the entire month.

redistributed amounts shall be payable as of June 30 of the applicable payment adjustment year.

hospital allotment for California, by substituting in the calculation the amount of eight hundred seventy-seven million dollars ($877,000,000), as though that amount was identified for California for the applicable federal fiscal year pursuant to Section 1396r-4(f) of Title 42 of the United States Code.

be divided by the amount determined in subparagraph (B).

paragraph (4) shall be multiplied by the factor derived in subparagraph (G), and the resulting amount shall be used for purposes of the calculations set forth in subclause (III) of clause (i) of subparagraph (C) of paragraph (4), as modified by subparagraph (I) below.

amount derived in subparagraph (C).

law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available.

(an) (1) For the 2001–02 payment adjustment year and subsequent payment adjustment years, eligible hospitals that meet the requirements of this subdivision and that are in operation as of June 30 of the applicable payment adjustment year, shall be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date, but only if the hospital has remained in operation for the period October 1 through June 30 of the applicable payment adjustment year.

subparagraph and paragraph (3). The positive remainder so derived shall be the maximum amount of supplemental lump-sum payment adjustments under this subdivision for the applicable payment adjustment year.

(ii) “Nonpublic hospitals,” which shall

include all eligible hospitals that, as of July 1 of the applicable payment adjustment year, met the definition of a nonpublic hospital.

(B) The amount determined to be the maximum amount of supplemental lump-sum payment adjustments under subparagraph (C) of paragraph (2) shall first be allocated between the two groups of hospitals referred to in subparagraph (A) as follows:

(ii) “Nonpublic hospitals”: 25 percent of the maximum amount.

(C) The amount of funds allocated pursuant to subparagraph (B) to each of the particular groups of hospitals referred to in subparagraphs (A) and (B) shall then be distributed as supplemental lump-sum payment adjustments among the eligible hospitals within each

particular group as follows:

(ii) The amount identified for each hospital under clause (i) shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the applicable payment adjustment year.

(iii) Where the amount computed under clause (i) for the particular hospital is equal to or exceeds the OBRA 1993 payment

limitation for the hospital, the hospital shall not receive a supplemental lump-sum payment adjustment. Data regarding hospitals that have reached this limitation shall not be used for purposes of clauses (v) through (viii).

(iv) Where the amount computed under clause (i) for the particular hospital is less than the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) shall be used for purposes of clauses (v) through (viii).

(vi) The figures determined for each hospital under clause (iv) shall be divided by the aggregate total determined under clause (v) for the particular group, yielding a percentage figure for each hospital.

(vii) The percentage figure determined for each hospital under clause (vi) shall be applied to the maximum portion of the funds allocated to the particular group under subparagraph (B), to determine the hospital’s pro rata share of the supplemental lump-sum payment adjustments. Notwithstanding the foregoing, however, in the case of a nonpublic hospital that, as of July 1 of the applicable payment adjustment year, met the definition of a children’s hospital, that pro rata share otherwise determined shall be multiplied by a factor of 1.69, yielding a modified pro rata share to be applied only with respect to the first one million dollars ($1,000,000) of the funds allocated pursuant to clause (ii) of subparagraph (B), and, with respect to the remainder of the funds so allocated, the pro rata share otherwise determined shall be multiplied by a factor of 1.09, yielding a modified pro rata share to be applied. The pro rata share for the other nonpublic

hospitals shall be reduced accordingly, yielding a modified pro rata share, so that the maximum portion of the funds allocated to the nonpublic hospitals group will not be exceeded. The pro rata share or modified pro rata share, as applicable, for each hospital, as computed under this clause, shall also be used for all purposes relating to descending pro rata distributions under clause (viii).

(viii) In no event shall a hospital receive supplemental lump-sum payment adjustment amounts in excess of the difference between the OBRA 1993 payment limitation for the hospital and the amount computed for the hospital under clause (i). Any supplemental lump-sum payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals within the same group.

(D) The department shall make interim and final payments of the supplemental lump-sum payment adjustments to hospitals on June 30 of the applicable payment adjustment year.

(A) The tentative listing, as that term is used in paragraph (1) of subdivision (f) of Section 14105.98.

(B) The disproportionate

share list, as that term is used in paragraphs (1) and (2) of subdivision (f) of Section 14105.98.

(C) Hospital-specific payment determinations pursuant to Section 14105.98.

contractors who are contracting with the department under Section 14087.5, 14088, 14093, 14200, or 14490 shall be included in the department’s calculation of annualized Medi-Cal inpatient paid days for use in determining the hospital’s medicaid inpatient hospitalization rate under Section 14105.98.

children’s hospitals, the department shall use data relating only to the children’s hospital or any other physical plant appearing on the consolidated license which is not more than 15 miles from the children’s hospital and shall exclude data relating to any physical plant added to the consolidated license pursuant to subparagraph (C) of paragraph (4) of subdivision (b) of Section 1250.8 of the Health and Safety Code.

in paragraph (2) of subdivision (d) of Section 14105.98, is gained for that payment adjustment program.

If a Medi-Cal provider negotiates a rate of payment for inpatient, outpatient, or ancillary services with a prepaid health plan under contract with the department pursuant to Chapter 8 (commencing with Section 14200) of this part which is lower than or equal to the lesser of reasonable costs, customary charges, or the schedule of maximum allowances, the rate shall not affect the director’s determination of reasonable costs, customary charges, or schedule of maximum allowances.

Insofar as permitted by federal law, for purposes of determining the reasonable costs of any service reimbursable under the provisions of this chapter, or determining prospective per capita rates of payment or cost-basis reimbursement under Chapter 8 (commencing with Section 14200) or Chapter 8.7 (commencing with Section 14520), any gifts, grants, or endowments received by the provider of such services or prepaid health plan, and any income earned by the investment or deposit thereof, shall not be deducted from the operating costs of such provider or plan.

It is the intent of the Legislature, in enacting this

section, to encourage philanthropic support of health facilities and other providers of services to Medi-Cal beneficiaries.

The director shall establish and update annually a rate schedule of reimbursement for paramedic services which provides reimbursement based upon reasonable cost standards of the department.

Notwithstanding any other provision of law, and to the extent federal financial participation is available, any city, county, or special district providing paramedic services as set forth in subdivision (s) of Section 14132, shall reimburse the Health Care Deposit Fund for the state costs of paying such medical claims. Funds allocated to the county from the County Health Services Fund pursuant to

Part 4.5 (commencing with Section 16700) of Division 9 of the Welfare and Institutions Code may be utilized by the county or city to make such reimbursement. Nothing in this chapter shall be construed to require a city, county, or special district providing, or contracting for, paramedic services as part of a program established under Article 3 (commencing with Section 1480) of Chapter 2.5 of Division 2 of the Health and Safety Code, to seek Medi-Cal reimbursement for services rendered to eligible Medi-Cal recipients.

This section shall be in effect only to the extent federal financial participation is available.

to subdivision (a):

artifice to do either of the following:

paragraph (4) of subdivision (b) is committed under circumstances likely to cause or that do cause two or more persons great bodily injury, as defined in Section 12022.7 of the Penal Code, or serious bodily injury, as defined in paragraph (4) of subdivision (f) of Section 243 of the Penal Code, a term of four years, in addition and consecutive to the term of imprisonment imposed in subdivision (c), shall be imposed for each person who suffers great bodily injury or serious bodily injury.

The additional terms provided in this subdivision shall not be imposed unless the facts showing the circumstances that were likely to cause or that did cause great bodily injury or serious bodily injury to two or more persons are charged in the accusatory pleading and admitted or found to be true by the trier of fact.

not preclude the use of any other criminal or civil remedy. However, an act or omission punishable in different ways by this section and other provisions of law shall not be punished under more than one provision, but the penalty to be imposed shall be determined as set forth in Section 654 of the Penal Code.

Any provider on whose behalf improper claims are submitted for authorization or payment under this chapter may be required to submit all such claims over the provider’s own signature for whatever time period the department determines appropriate.

the Health and Safety Code, a provider may appeal the collection of overpayments under

this section pursuant to procedures established in Article 5.3 (commencing with Section 14170). Overpayments collected under this section shall not be returned to the provider during the pendency of any appeal and may be offset to satisfy audit or appeal findings if the findings are against the provider. Overpayments will be returned to a provider with interest if findings are in favor of the provider.

exceed 90 days. The notice to the provider shall do all of the following:

under the administrative adjudication provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, for consideration by the department.

indicia of reliability as recognized by state or federal courts or by other law sufficient to meet the constitutional prerequisite to a law enforcement search or seizure of comparable business assets. The department shall carefully consider the allegations, facts, data, and evidence with the same thoroughness as a state or federal court would use in approving a warrant for a search or seizure.

under this subdivision, the department may request the report from the Department of Justice or the law enforcement agency on no more than a quarterly basis. The Department of Justice or the law enforcement agency, as applicable, shall provide the report within 30 days of the request.