SECTIONS 14610-14620 - California Statutes

WELFARE AND INSTITUTIONS CODE

SECTION 14610-14620

14610. As used in this article:
(a) "Rate" means the rate of reimbursement per unit of service
which is agreed to by the department and a hospital.
(b) "Unit of service" means an inpatient day, a case, a discharge
or admission, an episode, or any other measure of service which is a
basis for reimbursement agreed to by a hospital and the department.
(c) "Commission" means the California Health Facilities
Commission.
(d) "Private entity" means any private organization with
appropriate experience and expertise to negotiate Medi-Cal hospital
reimbursement rates on behalf of the state.

14611. It is the intention of the Legislature to enact a method for
reimbursing hospitals for inpatient and outpatient services provided
to Medi-Cal beneficiaries on a prospectively negotiated contractual
basis. The provisions of this article are intended to develop and
test alternatives for contractually arranging for the payment and
delivery of such services which will become the basis for a permanent
contracting system.

14612. The Legislature further intends that the alternatives
developed and tested pursuant to the provisions of this article shall
be consistent with the following objectives:
(a) Providing reasonable access to all levels and types of
hospital care by beneficiaries.
(b) Providing reasonable geographical access to hospital care by
beneficiaries.
(c) Promoting efficiency and economy in the delivery of hospital
care.
(d) Fairness to the contracting hospitals.

14613. (a) The department shall develop at least three alternative
methods of reimbursing hospitals for providing inpatient and
outpatient hospital services to Medi-Cal beneficiaries on a
prospectively negotiated rate basis. Each method shall provide for
prospectively negotiating rates for such care. Each method shall
require the hospital to agree to provide a minimal number of units of
service at the negotiated rate.
(b) The department shall consult with associations and other
appropriate representatives of the hospital industry. The department
shall make every reasonable effort to develop at least one
alternative for prospectively negotiating hospital rates which is
supported by such representatives of the hospital industry.
(c) The department shall consult with the commission regarding the
development of at least one alternative for prospectively
negotiating hospital rates. The department may enter into an
interagency agreement with the commission for the development of such
an alternative.

14614. Each alternative method for prospectively negotiated rate
reimbursement developed pursuant to this article shall do the
following:
(a) Reduce administrative cost to the department and to hospitals.
(b) Provide incentives to hospitals to participate in the Medi-Cal
program, including prospective interim payments, unless the parties
agree otherwise.
(c) Provide incentives to hospitals to provide services on an
outpatient basis wherever possible.
(d) Provide incentives to hospitals to reduce their costs.

14616. Not sooner than 30 days after providing notification to the
Joint Legislative Budget Committee, the department may implement on a
test basis any of the alternatives for prospective hospital rate
negotiations which have been reported to the Legislature pursuant to
Section 14614. The department may enter into an interagency agreement
with the commission, or contract with a private entity, for
implementing any such alternative.
In testing alternatives, the department shall attempt to obtain
participation by hospitals representing various sizes, types,
ownership, and geographic locations. The department may not
discriminate against hospitals wishing to participate on the basis of
any of the characteristics described in the immediately preceding
sentence.

14617. Nothing in this article shall be construed to require that
hospitals participate in a prospectively negotiated rate test, as
provided by this article, as a condition of participation in the
Medi-Cal program.

14619. For the 1981-82 fiscal year, the Controller may transfer
such funds among Items 426-001-001, 426-001-890, 426-101-001, and
426-101-890 of the Budget Act of 1981 as are necessary to implement
the provisions of this article.

14620. Authority to implement negotiated hospital rates after the
completion of the pilot study and after June 30, 1983, shall be
contingent on both of the following:
(a) A special Budget Act item, following the submission by the
State Department of Health Services of a final report which evaluates
the results of the projects conducted under the provisions of this
article.
(b) Enactment of legislation specifying the negotiated hospital
rate program.