May 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.
AB 113, District Hospital Inpatient Medi-Cal Intergovernmental Transfer (IGT) Program 
The Department of Health Care Services (DHCS) is preparing for implementation of the 2013-14 AB 113 program for district/municipal hospitals. The AB 113 program provides supplemental payments to district/municipal hospitals for fee-for-service Medi-Cal inpatient services.  DHCS had hoped to distribute payments prior to June 30, but due to the need to obtain Centers for Medicare and Medicaid Services (CMS) approval on the total amount, the distribution will instead be done in July.  Letters were provided to eligible hospitals in late April requesting confirmation of participation.  These letters contained estimated amounts of both the IGT amount and the resulting federal match.  DHCS is confident the amount provided is the minimum amount and actual amounts might be slightly greater, depending on the aggregate upper payment limit room approved.
State Budget – AB 97 Medi-Cal Reductions 
The primary state budget issue for the DHLF is the AB 97 Medi-Cal provider rate reductions.  These reductions affect many Medi-Cal providers, but also include the “clawback” or retroactive recoupment of the reduction to hospital-based distinct part nursing facilities (DP/NFs).  Current law allows for recoupment from June 1, 2011 to September 1, 2013 (for rural/frontier hospitals) or October 1, 2013 (for non-rural/frontier hospitals).
Despite May Revise of the budget not addressing these reductions, hospital advocates, led by the California Hospital Association (CHA) have urged the elimination of this reduction.  The Assembly Budget Committee agreed to eliminate the reductions, but the Senate Budget Committee did not.  Therefore, this issue is part of the Budget Conference Committee.  The Conference Committee is charged with reconciling differences between the two Houses’ budget recommendations.
The Budget Conference Committee includes:
Senate Conferees — Sens. Mark Leno, D-San Francisco, Jim Nielsen, R-Gerber, Ricardo Lara, D-Bell Gardens, and Loni Hancock, D-Berkeley.
Assembly Conferees — Asembly members Nancy Skinner, D-Berkeley, Jeff Gorrell, R-Camarillo, Shirley N. Weber, D-San Diego, and Richard Bloom, D-Santa Monica. Skinner will chair the conference committee.
The Budget Conference Committee plans to conclude their work very soon and an “on-time” budget (approved by the Legislature by June 15; signed by the Governor by June 30) is expected.  We will keep you apprised of the final report from this committee.
2010 1115 Waiver
The DHLF-sponsored 2013 legislation, AB 498 (Chavez) provided funding for district/municipal hospitals.  These federal funds would be accessed via certified public expenditures (CPEs) for care provided to the uninsured.  The funding would be available for the last two years of the current 1115 Waiver, 2012-13 and 2013-14 and provides approximately $25 million in each year for district/municipal hospitals with the state raking off an equal amount.  This will require an amendment to the 2010 Waiver.
When the Waiver amendment was submitted to the Centers for Medicare and Medicaid Services (CMS), the informal initial response from CMS was that their direction is shifting away from funding services (for the uninsured) and to ensuring that delivery system changes are implemented.  Therefore, DHCS and Forum staff have crafted a counter proposal that would include the two years of funding for uncompensated care as outlined above but would add a one year (2014-15) delivery system reform incentive program (DSRIP) for district/municipal hospitals.  The Forum currently is advocating that this DSRIP contain requirements for only one category.  (Designated public hospitals must meet milestones in four separate categories.)  The category likely most appropriate is infrastructure and/or innovation and redesign.  When DHLF members were working with the state in 2012-13 on the DSRIP some of the potential projects in these categories included expanding primary and/or specialty care; improvements in emergency departments; telemedicine, etc.
Forum staff has been meeting with DHCS on the potential DSRIP and other Waiver components to obtain clarification on items included in the amendment as well as other logistical issues.  CMS has provided some feedback, but their approval on both components is still required prior to any implementation/funding.  DHLF legislative advocates are identifying a legislative vehicle since statutory authority is needed to both clarify items in AB 498 and expand the Waiver amendment to include the DSRIP.  Grassroots advocacy will be requested once the legislative process is underway.
2015 1115 Waiver
An ongoing key component of DHLF advocacy is district/municipal participation in the upcoming Medi-Cal 1115 Waiver.  DHCS recently announced a timeline for the upcoming Waiver:

  • Summer 2014 – Summary of stakeholder and public input and administration review of stakeholder feedback
  • Late Summer 2014 – Concept paper and proposal for stakeholder engagement to submit to CMS
  • Fall 2014 – Begin stakeholder process; process to be determined
  • Spring 2015 – Submission of Waiver renewal to CMS.

As noted above, the Forum is currently engaged with DHCS (and other stakeholders) on the current Waiver) and continues to advance the Forum’s participation in both the 2010 and 2015 Waivers.
DHLF staff continues to research potential behavioral health demonstrations for district/municipal hospitals, both those that could be included in the Waiver and those that could result from legislation based on recent school violence.
2014-2016 Hospital Provider Fee 
Due to the various new complexities in the current 2014-2016 Quality Assurance Fee (QAF), the 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.   Currently estimates for the managed care approval are for late 2014/early 2015.  We will continue to keep you apprised of activities relating to implementation of the QAF.
APR-DRG Implementation
Forum staff continues to work with private hospitals and CHA regarding the implementation of APR-DRGs and resulting billing issues.  DHCS is planning a webinar on June 19 on APR-DRGs as they plan for the next fiscal year (including new calculators, CCRs, grouper, wage index).  Watch the website for further information and we will keep you apprised.
If you have not yet completed the survey for DHCS regarding utilization management that was emailed to DHLF members April 24, please take a moment to do so.  It will be a tool used by DHCS as they determine utilization management tools under APR-DRGs.
Hospital Presumptive Eligibility 
Under the Affordable Care Act, DHCS created the Hospital Presumptive Eligibility program to allow all hospital Medi-Cal providers to provide potentially eligible individuals with temporary, full-scope Medi-Cal benefits.  Presumptive eligibility is based only on the patient’s self-attested information for income, household size and residency.  Benefits will be awarded for up to two months for newly-eligibile Medi-Cal patients.  Due to the interest in this program (including from DHLF members when Amber Kemp of CHA presented on it during our April Board meeting), CHA is providing a webinar on the subject.  Information is available on their website at: 
DHLF Calendar
Upcoming DHLF Board/Member Events:

  • August 1, 2014 – Board/Member meeting; San Bernardino Mountains Community Hopsital.