September Recap of DHLF Activities

Following is a summary of the issues the DHLF has been focusing on since our last monthly recap.  As outlined below, most activities have been (and will continue to be) focused on the state budget which changed Medi-Cal inpatient fee-for-service reimbursement for District and Municipal hospitals, effective July 1, 2012.

Activities Related to District Hospitals’ Transition to CPEs/Obtaining New Federal Waiver Funding

Current and Ongoing Activities
The Department of Health Care Services still is awaiting approval (from the Centers for Medicare and Medicaid Services – CMS) on all components of the 2012-13 state budget proposal to transition non-designated public hospitals (NDPHs) to using certified public expenditures (CPE) for Medi-Cal fee-for-service inpatient services coupled with receiving waiver funding (for uncompensated care costs and delivery system improvements).

Delivery System Reform Incentive Payments (DSRIP)
In year 1, $40 million is available to District/Municipal hospitals as incentive payments ($62.5 million/year will be available in years 2 and 3) for making delivery system improvements.  DHLF staff and hospital representatives are meeting weekly with DHCS to finalize the DSRIP plan to be submitted to CMS this week.
All NDPHs will be required to submit a 3-year DSRIP plan in October for categories 1 and 2 (category 1 – infrastructure; category 2 – innovation and redesign).  All federal funding in year 1 (2012-13) will be distributed based on these two categories.
In November, District/Municipal hospitals will be required to submit their 3-year DSRIP plan that also includes categories 3 (population-focused improvement) and 4 (patient safety). Incentive payments will be made based on meeting the milestones identified by each hospital (with approval by DHCS and CMS). The non-federal share for DSRIP payments will be intergovernmental transfers provided by public District/Municipal hospitals.
Detailed information on DSRIP requirements has been provided to all NDPHs previously through ongoing emails, conference calls and these monthly updates.  Hospitals are encouraged to review the latest draft of Attachment Q (attached).  The starting point of Attachment Q is the DSRIP projects identified by county/UC and other NDPH hospitals.  NDPHs are encouraged to use these projects (with modifications to milestones and metrics recognizing size and resource differences) as CMS already has approved the ones submitted by designated public hospitals.  Additionally, NDPHs are encouraged to ensure plans are simplified to one project per category (especially in categories 1 and 2) for ease and timeliness of approval.
If you or staff within your hospital are interested in participating in the DHLF DSRIP workgroup, please respond to this email expressing your interest.
Uncompensated Care
As previously noted, in year 1 (2012-13), $45 million in federal funds is available to District/Municipal hospitals in recognition of the care provided to the uninsured ($50 million will be available in year 2 and $55 million in year 3).  These funds will be accessed utilizing hospital certified public expenditures and the actual process/timing is a topic of ongoing discussion with DHCS based on receipt of CMS approval and hospitals completing the reports necessary to access funding.
Accessing federal funding for providing care to the uninsured makes it even more important that all costs associated with care to these patients is correctly captured and reported by all District/Municipal hospitals.
The DHLF will work with DHCS to convene a webinar(s) to discuss requirements related to reporting of CPEs both for Medi-Cal and the uninsured.

Hospital Provider Fee

The first installment of direct grants to all NDPHs contained in the 30-month hospital provider fee (the term of the fee is July 1, 2011 through December 31, 2013) was mailed to hospitals late last week.  Subsequent installments then will be made periodically (approximately 10 installments) over the term of the fee.

State Legislative Update

On September 22, the governor signed the DHLF-sponsored SB 1081 (Fuller, R-Bakersfield).  This bill modifies the waiver terms/conditions to allow a public District hospital to become an MCE-LIHP contractor in counties that are both without a county hospital or are not interested in becoming a LIHP contractor.  While this bill will not be needed if the affected counties become LIHP contractors, it provides an alternative if these counties choose not to move forward with a LIHP.  The bill also provides recognition of District/Municipal hospitals as ongoing partners with the state in providing care to low-income Californians.

DHLF Board Meeting

The next DHLF Board meeting will be held in Sacramento on October 17.  Much of this meeting will be devoted to planning for 2013 and beyond.  2013 already is shaping up to be a challenging year.