2013-2014 Budget Recap

2013-14 State Budget News Affecting District/Municipal Hospitals: 

On June 27, the governor signed the 2013-14 state budget.  There are two items of importance to district/municipal hospitals (both done “behind closed doors” in the last-minute negotiations between the Administration and Legislative leadership) are: 

  1.  The trailer bill language directing the Administration to access federal waiver funding (in recognition of costs of care provided to the uninsured) for district/municipal hospitals in 2013-14 and 2014-15 was removed (see more below).
  2. The language that would have re-based the reductions for hospital-based distinct-part nursing facilities (basing the reduction on current rates rather than 2008 rates) also was rejected (additional discussion below). 

While the removal of the language related to waiver funding is a disappointment, Forum staff already is moving forward with other avenues to accomplish the same.  First, the DHLF-sponsored, AB 498, currently is in the Senate Health Committee.  This bill was recently amended to accomplish the same thing the budget language would have – directing the Administration to access waiver funding for district/municipal hospitals.  Secondly, the Forum is beginning a campaign with the Centers for Medicare and Medicaid Services (CMS) for them to apply pressure to the state Administration to accomplish the same.  The Forum has requested and received tremendous grassroots support relative to AB 498, which will be heard July 3 in the Senate Health Committee.   Forum staff will keep members apprised of the progress of the bill.  

Regarding the DP/NF re-basing, this also was a disappointment, but AB 900 (Alejo) remains viable in the Legislature and members’ grassroots advocacy on this bill will continue to be as important as it has been to date.  On a related note, CHA and the other parties to the original litigation plan to request this matter be considered by the U.S. Supreme Court.  Affected hospitals should have received information regarding preparation for the potential state lawsuit on the same matter.  

Since district/municipal hospitals will not transition to CPEs for Medi-Cal inpatient fee-for-service, the proposal is to move these hospitals to APR-DRGs beginning January 1, 2014.  APR-DRG rate notifications were mailed to district/municipal hospitals in late June.  These notifications cover the six-month period from January – June of 2014.  A subsequent notification will go out to all hospitals (including district/municipals) that will cover year 2 and year 3 of APR-DRG implementation in mid-July.  DHCS indicates the best place to direct questions drg@dhcs.ca.gov.  Also, DHCS is planning a rate setting webinar for interested hospitals, tentatively set for July 17.  For interested hospitals, it would be helpful if you request and receive hospital-specific data in advance of the webinar.  If you submit your data request to the DRG inbox this week, that should be sufficient time to complete the data use agreement and receive the data.  The cover letter that accompanied the rate notification also provided information on requesting hospital-specific data.                                                                             

Finally, if you could provide a copy of the rate notification 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.