proceeds of the fee assessed pursuant to this article in the fund, together with any interest and dividends earned on money in the fund, shall continue to be used exclusively to enhance federal financial participation for hospital services under the Medi-Cal program, to provide additional reimbursement to, and to support quality improvement efforts of, hospitals, and to minimize uncompensated care provided by hospitals to uninsured patients, as well as to pay for the state’s administrative costs and to provide funding for children’s health coverage, in the following order of priority:

(A) (i) To pay for the department’s staffing and administrative costs directly attributable to implementing this article, not to exceed two hundred fifty thousand dollars ($250,000), except as provided in clause (ii), for each subject fiscal quarter, exclusive of any federal matching funds.

(ii) Notwithstanding any other law, during any fiscal quarter for which the department incurs staffing or administrative costs due to the implementation of the federal Medicaid pass-through payment requirements codified in Section 438.6 of Title 42 of the Code of Federal Regulations as of March 20, 2017, or other federal requirements imposed as of the effective date of the act that added this clause, which significantly impact the implementation of this article, to pay for the department’s staffing and administrative costs that are directly attributable to implementing this article, not to exceed five hundred thousand dollars ($500,000) for each subject fiscal quarter, exclusive of any federal matching funds.

(B) To pay for the health care coverage, as described in subdivision (g), except that for the two subject fiscal quarters in the 2013–14 fiscal year, the amount for children’s health care coverage shall be one hundred

fifty-five million dollars ($155,000,000) for each subject fiscal quarter, exclusive of any federal matching funds.

(C) To make increased capitation payments to managed health care plans pursuant to this article and Section 14169.82, including the nonfederal share of capitation payments to managed health care plans pursuant to this article and Section 14169.82 for services provided to individuals who meet the eligibility requirements in Section 1902(a)(10)(A)(i)(VIII) of Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396a(a)(10)(A)(i)(VIII)), and who meet the conditions described in Section 1905(y) of the federal Social Security Act (42 U.S.C. Sec. 1396d(y)).

(D) To make increased payments and direct grants to hospitals pursuant to this article and Section 14169.83, including the nonfederal share of payments to hospitals under this article and Section 14169.83 for

services provided to individuals who meet the eligibility requirements in Section 1902(a)(10)(A)(i)(VIII) of Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396a(a)(10)(A)(i)(VIII)), and who meet the conditions described in Section 1905(y) of the federal Social Security Act (42 U.S.C. Sec. 1396d(y)).

(commencing with Section 14167.1).

the hospital for the program period.

pursuant to Section 14169.52 in order to ensure compliance with the federal requirements set forth in Section 433.68 of Title 42 of the Code of Federal Regulations or elsewhere in federal law.

definitions shall apply:

(A) “Actual net benefit” means the net benefit determined by the department for a net benefit period after the conclusion of the net benefit period using payments and grants actually made, and fees actually collected, for the net benefit period.

(B) “Aggregate fees” means the aggregate fees collected from hospitals under this article.

(C) “Aggregate payments” means the aggregate payments and grants made directly or indirectly to hospitals under this article, including payments and grants described in Sections 14169.54, 14169.55, 14169.57, and 14169.58, and subdivision (b) of Section 14169.82.

(D) “Net benefit” means the aggregate payments for a net benefit period minus the aggregate fees for the net benefit period.

(E) “Net benefit period” means a subject fiscal year or portion thereof that is in a program period and begins on or after July 1, 2014.

(F) “Preliminary net benefit” means the net benefit determined by the department for a net benefit period prior to the beginning of that net benefit period using estimated or projected data.

program period before the beginning of the program period.

benefit shall be available from the fund to the department for children’s health coverage. The department shall notify the Joint Legislative Budget Committee and the fiscal and appropriate policy committees of the Legislature of the results of the reconciliation for each net benefit period pursuant to this paragraph within five working days of performing the reconciliation.

years after the end of a program period. After the date determined by the department pursuant to this subdivision, no further supplemental payments shall be made under the program period, and any fees collected with respect to the program period shall be used for a subsequent program period consistent with this section. This subdivision does not affect the department’s authority to collect quality assurance fees for a program period after the end of the program period or after the date determined by the department pursuant to this subdivision. The department shall notify the Joint Legislative Budget Committee and fiscal and appropriate policy committees of that date within five working days of the determination.

provided to individuals who meet the eligibility requirements in Section 1902(a)(10)(A)(i)(VIII) of Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396a(a)(10)(A)(i)(VIII)), and who meet the conditions described in Section 1905(y) of the federal Social Security Act (42 U.S.C. Sec. 1396d(y)) such that expenditures for services provided to the individual are eligible for the enhanced federal medical assistance percentage described in that section.