SECTIONS 14165.50 - California Statutes

WELFARE AND INSTITUTIONS CODE

SECTION 14165.50

14165.50. (a) To facilitate the financial viability of a new
private nonprofit hospital that will serve the population of South
Los Angeles that was formerly served by the Los Angeles County Martin
Luther King, Jr.-Harbor Hospital, Medi-Cal funding shall at a
minimum be made available, as specified in this section, or pursuant
to mechanisms that provide equivalent funding under successor or
modified Medi-Cal payment systems.
(b) (1) (A) Payment for Medi-Cal inpatient hospital services
provided by the new hospital, including, but not limited to,
supplemental payments, may be negotiated under the selective provider
contracting program, as set forth in Article 2.6 (commencing with
Section 14081). The negotiations for per diem payments shall include
consideration of the new hospital's projected Medi-Cal costs for
providing the services and level of Medi-Cal reimbursement thereof,
exclusive of any supplemental payments, necessary for the financial
viability of the new hospital, and all other factors allowable under
Section 14083.
(B) Notwithstanding any other provision of law, Medi-Cal
supplemental payment for debt service costs shall be made to the new
hospital pursuant to Section 14085.5 with respect to capital projects
located at the site of the new hospital that previously were
determined eligible under Section 14085.5 based on the debt service
costs incurred by the County of Los Angeles, and if applicable, the
new hospital. Alternatively, the rate required to be paid to the new
hospital pursuant to subparagraph (A) may be increased to take into
account the amount of the supplemental payments for debt service
during the time the payments would be due. Nothing in this
subparagraph shall be construed to increase the department's
obligations set forth in paragraph (2) of subdivision (g) of Section
14085.5.
(2) Notwithstanding any other provision of law, in the event the
new hospital does not enter into a contract under the selective
provider contracting program as described in paragraph (1), all of
the following shall apply:
(A) Health facility planning area 935, or a successor health
facility planning area, that includes the area in which the new
hospital will operate, shall be opened to enable the cost-based
reimbursement methodology for Medi-Cal inpatient hospital services
set forth in the Medi-Cal state plan to apply with respect to
services provided by the new hospital.
(B) The department shall seek federal approval, as necessary, to
enable the new hospital to receive Medi-Cal supplemental payments in
addition to the cost-based reimbursement provided for in subparagraph
(A). The nonfederal share of the supplemental payments may be funded
with public funds that are transferred to the state from the County
of Los Angeles, at the county's election, pursuant to Section 14164.
(C) (i) Any public funds transferred to the state as described in
subparagraph (B) for supplemental payments to the new hospital with
respect to a fiscal period shall be expended solely for the
nonfederal share of the supplemental payments, except for an amount
that may be retained by the state for the benefit of the Medi-Cal
program negotiated between the department and the County of Los
Angeles, limited as follows:
(I) For each fiscal year before the 2017-18 fiscal year, the
retained amount shall not be more than the amount of the nonfederal
share of the reimbursement, exclusive of any supplemental payments,
for the fiscal year to be paid pursuant to the cost-based
reimbursement methodology described in subparagraph (A) that exceeds
77 percent of the new hospital's projected Medi-Cal costs.
(II) For the 2017-18 fiscal year and each subsequent fiscal year,
the retained amount shall not be more than the amount of the
nonfederal share of the reimbursement, exclusive of any supplemental
payments, for the fiscal year to be paid pursuant to the cost-based
reimbursement methodology described in subparagraph (A) that exceeds
72 percent of the new hospital's projected Medi-Cal costs.
(ii) For purposes of this subparagraph, the new hospital's
projected Medi-Cal costs shall be based on the cost finding
principles applied under subdivision (b) of Section 14166.4, and are
not subject to the reimbursement limitations set forth in Article 7.5
(commencing with Section 51536) of Chapter 3 of Subdivision 1 of
Division 3 of Title 22 of the California Code of Regulations. The new
hospital's projected Medi-Cal costs may take into account audit
adjustments to allowable costs for prior periods.
(D) Reimbursement under this paragraph shall be available to the
new hospital only if the necessary federal approval described in
subparagraph (B) is obtained. If the necessary federal approval is
not obtained, the new hospital shall be reimbursed for Medi-Cal
inpatient hospital services as set forth in paragraph (1) and the per
diem payments shall reimburse the hospital at no less than 72
percent of the hospital's projected Medi-Cal costs for providing the
services, exclusive of any supplemental payments and the payments
described in subparagraph (B) of paragraph (1).
(3) Notwithstanding any other provision of law, and only to the
extent federal approval is obtained, the new hospital shall be
reimbursed for Medi-Cal outpatient services under the cost-based
reimbursement methodology established in Section 14105.24. The
department shall seek federal approval, as necessary, to expand the
methodology to include outpatient services provided to Medi-Cal
beneficiaries by the new hospital.
(c) Nothing in this section shall be construed to preclude the new
hospital from receiving any other payment for which it is eligible
in addition to the payments provided for by this section.
(d) Notwithstanding the rulemaking provisions of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, the department may implement this section by
means of all facility letters, all county letters, or similar
instructions, without taking further regulatory action. Nothing in
this section shall be construed to preclude the department from
adopting regulations.
(e) (1) Except as otherwise provided herein, this section shall be
implemented only if, and to the extent that, federal financial
participation is available and this section does not jeopardize the
federal financial participation available for any other state
program.
(2) This section shall be implemented only if, and to the extent
that, necessary approval from the federal Centers for Medicare and
Medicaid Services is obtained.
(f) For purposes of this article, "new hospital" means a health
facility that is certified under Title XVIII and Title XIX of the
federal Social Security Act, and is licensed pursuant to Chapter 2
(commencing with Section 1250) of Division 2 of the Health and Safety
Code to provide acute inpatient hospital services, and includes all
components of the facility, with an inpatient hospital service
location on the campus of the former Los Angeles County Martin Luther
King, Jr.-Harbor Hospital.