August Recap of DHLF Activities

Following is a summary of the issues the DHLF has been focusing on since our last monthly recap.  Most of the activities during August were related to the next iteration of the hospital provider fee and planning our federal advocacy program.  This newsletter, as well as additional information and resources related to Forum activities, is available on our website – www. cadhlf.org. 

Hospital Provider Fee – SB 239 (Hernandez/Steinberg)

Work on the next hospital provider fee has been at the forefront of our activities since the program had to be passed by the Legislature before their adjournment September 12 for the year.  Based on intense negotiations by CHA with the Administration and legislative leadership, the next fee will be a 3-year program (calendar years 2014-16) and will be coupled with a hospital industry initiative to protect additional rake-offs by the state (the new initiative was filed late this week). The initiative also will address back-door rake-offs by prohibiting reductions to hospital Medi-Cal reimbursement.  

The DHLF staff has been participating with CHA and other hospital constituency groups to determine the most appropriate level of participation by district/municipal hospitals.  As reported to you previously, the current proposal for district hospitals has not changed and is outlined in the attachment. 

A few comments on the district components: 

The $15 million in improved managed care rates for districts (based on an actuarial equivalent of AB 113, the district/municipal IGT program for fee-for-service Medi-Cal) does include some unknowns so this may need to be adjusted once more information is available.  Forum staff has begun meeting with DHCS on this component. 

A key component included in SB 239 is protections related to the rate range IGT.  This was a difficult lift within the industry, but we were successful in obtaining legislative language that gives district hospitals priority in counties without a county/UC hospital.  This is a piece of a larger proposal including funding from county/UC hospitals and benefitting private hospitals so there is still much work to be done on this particular component.  Additionally, we were successful in obtaining a commitment by CAPH to work closely with the DHLF in counties with both district and county hospitals to design a program that hopefully will benefit the beneficiaries seen at both types of public hospitals. 

The final, important component of SB 239 that CHA successfully negotiated, is the elimination of the prospective Medi-Cal rate reduction for all hospital-based distinct-part nursing facilities.  The potential retroactive recoupment remains, but numerous efforts are underway to mitigate this, including CHA’s efforts with CMS (and other states in similar situations) and the potential for DHLF-led state litigation on this matter. 

DP/NF Supplemental Program for Public Hospitals 

There is a supplemental program that allows public DP/NFs to claim any unreimbursed costs through a CPE federal match program.  The effect of the supplemental is to cut the retroactive reductions in half for all public hospitals through the receipt of federal funds.  Forum staff has been working with DHCS to ensure hospitals have the necessary tools to take advantage of this program when/if the reductions occur.  The program may only be accessed when the actual reductions occur (when costs are not obtained).  DHCS has submitted a draft claim for all public DP/NFs which will be amended if/when the reductions are implemented. 

Medi-Cal APR DRGs 

The DHLF Board requested the Forum work with DHCS to obtain a six-month delay in the implementation of APR-DRGs for Medi-Cal.  Reasons cited included training for staff and physicians on documentation, IT and care coordination system changes required, purchase of the 3M grouper.  DHCS appears to have flexibility in this area based on statute, so Forum staff has begun advocacy with DHCS to delay the implementation until July 1, 2014.  We do not yet have a commitment to delay from the Department, but advocacy continues on this front. 

APR-DRG rate notifications for year 1 (January – June 2014) were mailed to district/municipal hospitals in late June with rate notifications for years 2 and 3 sent in July.  DHCS indicates the best place to direct questions is drg@dhcs.ca.gov.                                                     

If you could provide a copy of the rate notification that you received to Forum staff via email or fax, it will be used to build a district/municipal hospital database which we can then use as part of our advocacy efforts. 

At the DHLF Board meeting in July, members requested a quote from Navigant on training on APR-DRGs as that company put together some training modules for children’s hospitals.  We should be able to provide additional information from Navigant in early October. 

CPE/Waiver Proposal/AB 498 (Chavez) 

This bill passed both houses without any no votes (77 – 0 in the Assembly; 34 – 0 in the Senate) and had complete bi-partisan support throughout the process.  AB 498 directs DHCS to work with CMS in an effort to obtain new funding under the Safety Net Care Pool as part of the current hospital 1115 Medi-Cal waiver.  Potential new funds available for district/municipal hospitals are $20 million in 2013-14 and $25 million in 2014-15 (with the state receiving the same amount as the pool of new funds will be shared 50-50).  This will be a component of our federal advocacy efforts (encouraging CMS to work with DHCS to approve these funds). 

This bill also was amended late in the session to include language that will allow public hospital-based DP/NFs to use the DP/NF supplemental program (outlined above) to obtain actual costs rather than the current projected costs.  

District Municipal Hospital Supplemental Funds – AB 113 and Non-Designated Public Hospital Supplemental Fund 

Late this week, district/municipal hospitals were requested to inform DHCS of their intent to participate in the 2012-13 AB 113 program.  This is the Medi-Cal intergovernmental transfer – IGT – program for fee-for-service (FFS).  The program is being re-implemented retroactively for 2012-13 since district/municipal hospitals did not move to certified public expenditures for Medi-Cal FFS as proposed in the 2012-13 state budget. 

Unfortunately, DHCS’ deadlines have slipped through this process, but they remain on track to get the payments out by late this month/early October.  Many thanks to all district/municipal hospitals for their prompt attention in submitting the letter of intent to participate. 

Once DHCS has distributed the funding for 2012-13, their attention will turn to the process for the 2013-14 funds. 

DHLF Federal Advocacy Program 

The DHLF Board recently approved a federal advocacy plan focused on the California Congressional Delegation, CMS and others.  As discussed, we are planning a trip to Washington, D.C. to meet with Congressional representatives on October 1 and 2 with a follow-up trip with CMS tentatively scheduled for October 29.  Additionally, it will be important to get Congressional representatives to your hospitals during the periods when members are back in the districts.  Please review the plan sent to you August 29.  If you are interested in participating  in the October 1 -2  DC trip and haven’t already been in touch with me, please let me know so we can ensure the schedule allows a visit with your Representatives office.  In addition to the federal advocacy plan, DHLF legislative advocates are ensuring the same message is provided to state Legislators. 

Draft talking points for both meetings at your hospital and for our use in DC will be provided to you the week of September 23. 

DHLF Calendar

Upcoming DHLF Board Events:

  • October 1 – 2  – DHLF Washington D.C. Advocacy Meetings
  • November 13 – DHLF Board Meeting, Sacramento