February Recap of DHLF Activities

Following is a summary of the issues on which the DHLF has been focusing recently.  This newsletter, as well as additional information and resources related to Forum activities, is available on our website – www. cadhlf.org. 

Advocacy Events 

The DHLF convened the following two advocacy events recently.  The talking points for both events centered on district/municipal hospitals participating in the current (thanks to the passage of 2013’s AB 498) and upcoming Medi-Cal 1115 Waiver.  Specifically: 

  • Approval by the Centers for Medicare and Medicaid Services (DMS) of AB 498 will result in approximately $50 million for district/municipal hospitals over a two-year period (2013-14 and 2014-15).
  • District/municipal hospitals propose to participate in the 2015 Waiver via demonstration projects focused on providing behavioral health services.
  • District/municipal hospitals propose to use intergovernmental transfers (IGTs) for capital needs – both those related to the behavioral health demonstrations and other infrastructure projects.

DHLF Legislative Day

The DHLF held a very successful Legislative Day in Sacramento on February 25.  Nine Forum members traveled to Sacramento and started the day with lunch and the opportunity to meet Bill Emmerson, the recently appointed Senior Vice President State Relations and Advocacy for the California Hospital Association (CHA).  Bill discussed current CHA’s activities related to initiatives and legislation.  In addition to the two onerous SEIU initiatives (discussed below), there is the CHA-sponsored hospital provider fee initiative (to put in place protections to ensure the fee remains with hospitals and there isn’t additional state rake-off), and a provider-opposed initiative to increase the Medical Injury Compensation Reform Act (MICRA) limits. 

California Health & Human Services Secretary Diana Dooley joined the group and provided an overview of the state’s many activities related to the implementation of health care reform.  She also was very open in an exchange with members regarding participation by district/municipal hospitals in the current and subsequent Medi-Cal 1115 Waiver.  During this exchange, she did indicate the timeline for the next waiver would likely be 2015 rather than this year as prior rumors had indicated. 

The members adjourned to the state Capitol to meet with many legislative offices.  The group worked in teams and met with members and staff in more than 25 offices.  Reports from all meetings were positive and staff will be providing follow-up as appropriate. 

It is important to note that we could have had many more legislative meetings if the membership turnout had been greater.  We would appreciate any feedback you may have about how to encourage participation by more member hospitals (we did learn the fourth week of the month is bad timing for district/municipal hospitals and will take that into account if a 2015 Legislative Day is scheduled). We also will discuss the importance of increased member participation at our April Board meeting. 

Finally, a huge thank you to our state legislative advocacy team of Kathryn Scott, Meghan Loper and Erin Clark (who gracefully managed all the every-changing logistics) for organizing a successful event. 

DHLF DC Advocacy Trip

Despite severe winter weather and several travel disruptions, some of the DHLF DC contingent made it to Washington D. C. for meetings with the California Congressional Delegation on March 4 and 5.  Despite the small number of attendees (due to weather), the Forum met with more than 20 Congressional offices.  

Similar to Legislative Day, we have received a great report from all of these meetings.  The DHLF message regarding participation in the current and upcoming waiver was well received (representatives were especially enthusiastic about the potential for behavioral health demos) and the meetings also allowed an opportunity to share the Forum’s appreciation with Congressional members who have communicated with CMS and/or the California Health & Human Services Agency since last autumn.  

We will be working with representatives at DHCS here in Sacramento and will be providing a progress report/next steps with all members soon. 

A tremendous thank you to our federal advocate, Charity Bracy, for both successfully organizing the event and being so flexible when plans/attendees/meetings changed. 

Grassroots Advocacy 

As part of the state and federal advocacy agenda approved by the DHLF Board, we encourage you to invite Congressional, state Senate and Assembly representatives to visit your hospital during one of their district work periods (for state legislators, that is most Fridays).  If you would like assistance in scheduling or planning a hospital visit by an elected representative, please contact Forum staff.  And if you do host a legislator/Congressional representative, drop staff a quick email to let us know as it is helpful in our work in the Capitols. 

AB 113, District Hospital Inpatient Medi-Cal Intergovernmental Transfer (IGT) Program 

The Department of Health Care Services (DHCS) currently is completing the calculations required to implement the 2013-14 AB 113 program.  The AB 113 program provides supplemental payments to district/municipal hospitals for fee-for-service Medi-Cal inpatient services.  As the first step in moving toward distributing payments, DHCS is determining the aggregate amount that will be available.  Due to changes in the Medi-Cal program (implementation of Medi-Cal expansion, further transition to managed care both by seniors and persons with disabilities and geographically) this calculation is taking longer than in years past.  However, Forum staff remains in contact with DHCS and will keep members apprised of their progress.  DHCS does indicate payments will be distributed prior to June 30 and as soon as an aggregate available amount is determined, we will let hospitals know so that we can assist with hospital-specific projections.  

Rural Expansion of Medi-Cal Managed Care 

The transition to Medi-Cal managed care in rural areas of California was fully implemented in November 2013.  Affected hospitals and Forum staff have been working with Medi-Cal managed care plans and DHCS on some of the challenges associated with the transition, most notably the change in reimbursement due to the loss of fee-for-service supplemental funding.  All parties (hospitals, plans and DHCS) are aware of the use of Medi-Cal managed care rate range IGTs as a way to offset the loss of supplemental funds.  The next step for Forum staff and affected hospitals is to work with DHCS on the operational aspect of implementing the rate range supplemental payments.  

All Forum members in the rural expansion areas are encouraged to begin the discussions regarding the rate range funding with the health plans now. 

Hospital Presumptive Eligibility 

Beginning January 1, 2014, as part of the Affordable Care Act, the Hospital Presumptive Eligibility (HPE) program provides individuals with temporary, no cost, Medi-Cal benefits for up to two months. Those potentially eligible for Hospital PE benefits are children (ages 0-18), parents caretaker relatives, pregnant women, “new adults” (ages 19-64, not pregnant, not on Medicare, and not eligible for any other mandatory group), and former foster care children between the ages of 18-26. In order to receive these benefits, an individual must submit a simplified application online during their hospital stay. The hospital application (required for hospital participation) and other information is available at: 

http://www.dhcs.ca.gov/services/medi-cal/eligibility/Pages/HospitalPE.aspx 

District/municipal hospitals are encouraged to complete the application and subsequent on-line training to ensure immediate coverage is provided for the above eligible individuals. 

2014-2016 Hospital Provider Fee 

A key focus of the DHLF in 2014, along with other hospital constituency groups, will be the implementation of the 2014-16 hospital quality assurance fee (QAF).  The funding for most district/municipal hospitals will differ from the prior 30-month fee (which ended December 31, 2013) as the current QAF will again require IGTs for most district hospitals to draw down funding via Medi-Cal managed care plans.  While the 2014-15 QAF is more complex than the prior program, it will result in significantly more funding (in aggregate $18.6 million annually in the 2011-13 QAF compared to a minimum of $55 million annually in the 2014-16 QAF). 

Due to the various new complexities in the current QAF, the Centers for Medicare and Medicaid Services (CMS) approval likely will take longer than for prior programs.  CHA is working diligently on approval of the fee-for-service component, but the managed care component (which is how district/municipal hospitals will receive the majority of funding) always takes longer.  Therefore, while QAF funding will be retroactive to January 1, 2014, distribution won’t be done until well into the 2014-15 fiscal year. 

DHCS is still reviewing the overall program and Forum staff will obtain feedback from them to provide to membership to ensure all are aware of the steps necessary to implement. 

State Budget – AB 97 Medi-Cal Reductions 

In concert with CHA, the DHLF advocacy priority in the 2014-15 state budget is to eliminate the AB 97 Medi-Cal reductions, which retroactively reduce distinct-part nursing facility rates (from June 2011 to September for rural facilities or October 2013 for non-rurals).  Hearings on the budget have begun and grassroots advocacy will be requested at an appropriate time. 

Other DHLF-Tracked Legislation 

AB 1952: Charity Care.  As originally introduced, required ALL general acute care hospitals to provide charity care or monetary contributions in an amount equaling at least 5 percent of the hospital’s net patient revenue.  If this charity care/contribution would result in a hospital’s operating margin being less than 1 percent, the hospital may petition to be excused from compliance. As a result of DHLF and other groups’ advocacy, on March 6, the bill was amended to apply only to not-for-profit hospitals, excluding children’s hospitals. 

The DHLF opposes the concept of mandated charity requirements but is appreciative of the exclusion of district/municipal hospitals and therefore will be neutral on this bill. 

AB 503: Community Benefit.  The stated purpose is to “provide more transparency and clarity on the community benefits provided by the hospitals.”  This bill currently applies to not-for-profit hospitals, but similar to AB 1952, the DHLF opposes the concept of mandated community benefit requirements but will not take an active position due to the district/municipal exemption. 

AB 1805: Reversal of Medi-Cal rate reductions.  DHLF SupportedEliminates all the AB 97 Medi-Cal provider rate reductions, including the retroactive rate reduction on hospital-based distinct-part nursing facilities.  The DHLF supports this bill as the retroactive recoupment could result in compromised access to care for patients seeking care in a district hospital DP/NF. 

CHA Activities 

The CHA Board met in February and, as in their December meeting, devoted much of the time to discussing the potential SEIU ballot initiatives.  One initiative would cap not-for-profit hospital CEO salaries at $425,000/annually and the other would cap private hospital charges at 125 percent of cost.  While district, county, UC and children’s hospitals are exempt from both initiatives, it was the full consensus of the CHA Board that these initiatives are a very “slippery slope” and likely will be expanded to all hospitals if they are successful.  Additionally, the charges initiative potentially has negative implications on supplemental funding, including the QAF. 

Current CHA activities on this issue include negotiating to determine a non-initiative compromise between the hospital industry and SEIU.  Both CHA and the DHLF will continue to keep you apprised regarding these efforts. 

Other 

Forum staff meets regularly with both CHA and the hospital constituency groups and various health systems, including the California Association of Public Hospitals (CAPH), to ensure our advocacy agenda is advanced, we determine opportunities to partner, and work collaboratively on issues affecting all organizations (i.e., 2014-16 hospital provider fee).  These meetings are in additional regular ongoing advocacy meetings (both formal and ad hoc) with DHCS, legislative and other regulatory staff. 

The DHLF provided testimony in support of the confirmation of Mari Cantwell as chief deputy director of DHCS.  The Forum also plans testimony later this month in support of the confirmation of Katie Johnson as deputy secretary, special projects for the California Health & Human Services Agency. 

DHLF Calendar 

Upcoming DHLF Board Events:

  • April 16-17, 2014 – DHLF 2-day Board Meeting (with educational sessions), Sacramento (please contact staff if you have any issues for inclusion on either of these agendas).
  • July 29, 2014 – DHLF Board Meeting, Rural DHLF Member (TBD)