January 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. 

2014 Workplan

As part of the Forum’s approved 2014 work plan, efforts continue on several fronts related to finance and reimbursement for California’s district/municipal hospitals.  

While the Forum achieved several successes in 2013, work now begins on implementing approved programs.  Information is provided below on each of these programs.  Additionally, the DHLF’s 2014 advocacy efforts (federal advocacy – Congressional and Centers for Medicare and Medicaid Services, state advocacy – Legislature and Administration) are outlined.  

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 first 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.  

The DHLF Executive Committee met January 22 and made the decision to continue the AB 113 distribution formula from prior years for 2013-14 payments.  Due to other impending changes to district/municipal hospital supplemental payments, a workgroup comprised of membership will be meeting to consider the appropriateness of the formulas for all programs.  If you are interested in participating in this workgroup, please contact Forum staff. 

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.  The AB 915 supplemental funding (which provides supplemental funds via certified public expenditures) for all public hospitals for outpatient care will decline due to fewer patients in fee-for-service in the new managed care areas.  

As a way to offset the loss of AB 915 funds, public district/municipal hospitals can participate in the Medi-Cal managed care rate range IGT.  In a meeting with DHCS on January 23, it was determined that available funding via the rate range IGT will allow district/municipal hospitals in the expansion areas (including those in The Partnership areas) to obtain rate range funding in amounts comparable to or greater than the AB 915 funding. 

The expansion of managed care also could result in a loss of AB 113 funds, but that potential funding change will be addressed in the hospital provider fee. 

Affected hospitals, health plans, Forum and DHCS staff will be meeting on the logistics of the rate range program funding over coming weeks.  However, all Forum members 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 (PE) 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 

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.  A small amount in direct grants will be available to the smallest district hospitals.  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. 

This is part of the overall district/municipal hospital supplemental funding that will be considered by a Form membership workgroup regarding hospital-specific distributions.  The distribution of the 2011-13 QAF is based on Medi-Cal managed care days. 

AB 498, Supplemental Funding for Care Provided to the Uninsured 

DHCS continues to work with CMS and the Forum continues its advocacy efforts regarding the implementation of AB 498, which would result in $20 million in aggregate in the current fiscal year for district/municipal hospitals in recognition of care provided to the uninsured.  A status regarding approval or any questions related to the approval will be provided as information becomes available. 

Federal Advocacy 

Forum members are planning an advocacy trip to Washington, D.C. March 4 and 5, 2014.  On March 4 CHA and AHA also will be having an advocacy day related to the Medicare DSH cuts.  This will be an opportunity for the DHLF to lend their voice, along with other hospital colleagues, on this important issue so we will be joining CHA/AHA in some of the meetings with the California Congressional delegation.  However, we will also have DHLF-specific meetings on both March 4 and 5 where the main purpose will be to advocate issues related to the upcoming Medi-Cal 1115 Waiver (the subject of our February 12 DHLF Board call) which could be implemented later this year.  

We will use the Hyatt Capitol Hill for our meeting headquarters.  It is located at 400 New Jersey Avenue, NW, Washington, D.C., USA, 20001, telephone: 202 737 1234.  As we do not have a large enough group for a block, please contact the hotel directly for room reservations.  A group dinner will be scheduled the evening of March 4 and Duane Dauner of CHA will join us for breakfast that same morning. 

We would like to meet with as many Congressional representatives as possible (that represent district/municipal hospitals), so would encourage your attendance on this trip.  Please let me know ASAP if you can attend so that we may be sure to schedule appointments with your representatives.

As part of our federal advocacy, we encourage you to invite Congressional representatives to visit your hospital during one of their district work periods.  If you would like assistance in scheduling or planning a hospital visit by a Congressional representative, please contact Forum staff. 

State Advocacy 

The DHLF Legislative Day will be held in Sacramento on February 25.  The day will begin at 11 a.m. with lunch and a speaker from the Administrative (either CHHS or DHCS).  Then we will meet with individual legislators from approximately 1 p.m. – 4 p.m.  Please let me know if you plan to attend, so we can be sure to schedule appointments with your Assembly Member/state Senator.  The message for Legislative Day will be similar to that delivered in Washington D.C. (talking points and background information will be provided to you over the next week).  

As with Congressional representatives, we urge you to invite your state Assembly Member/state Senator to visit/tour your hospital so they can see first-hand the importance of district hospitals in their communities. Similarly, DHLF staff continues to meet with DHCS and CHHS to advance our message. 

Other state legislative priorities will be discussed at our April Board meeting, including a long-range plan to address finance challenges by district/municipal hospitals. 

Medi-Cal APR-DRGs 

As a reminder, district/municipal hospitals transitioned to Medi-Cal APR-DRGs for inpatient fee-for-service beginning January 1, 2014.  Information/resources (including available training, etc.) are available on the DHCS website at http://www.dhcs.ca.gov/provgovpart/Pages/DRG.aspx.  Additionally, utilization management will transition away from treatment authorization requests (TARs) to Interqual or Millman Care Guidelines (MCG).  If you have concerns with the upcoming change regarding utilization management by Medi-Cal, please contact Forum staff. 

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 or October 2013).  Hearings on the budget will begin later this month so grassroots advocacy will be requested at that time. 

CHA Activities 

The CHA Board met last week and 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. 

DHLF Calendar 

Upcoming DHLF Board Events (outlook invitations forthcoming):

  • February 25, 2014 – DHLF Legislative Day, Sacramento
  • March 4-5, 2014 – D.C. Advocacy Trip
  • April 16-17, 2014 – DHLF Educational Session and Board Meeting, Sacramento (please contact staff if you have any issues for inclusion on either of these agendas).