DHLF Lobbying Dues Disclosure for Cost Reports

October 8, 2018

TO:  Members, District Hospital Leadership Forum

FROM:  Sherreta Lane, DHLF Senior Vice President, Finance Policy

SUBJECT:  Medicare Cost Reports and DHLF Dues

Under the Medicare Provider Reimbursement Manual, Part 1, Section 2139, hospitals are required to make adjustments in their Medicare cost reports to eliminate the portion of association membership dues that is related to certain unallowable lobbying expenses as defined by Medicare.

As allowed by Medicare provisions, the District Hospital Leadership Forum (DHLF) uses the IRS definitions in calculating unallowable lobbying expenses. In general, these are defined as direct communications with certain members of state or federal government to influence state or federal legislation.

The following information is for the calendar year 2018. The portion of your total hospital association dues that are unallowable expenses for Medicare is 20.3 percent.  This percentage also applies for 990 reporting, if applicable.

In addition to the Medicare definition of lobbying, your dues support advocacy and representation of district/municipal hospitals by the DHLF in the broadest sense. Your dues invoice will reflect the estimated percentage for 2019.

Please share this information with the individual on staff responsible for completing the Medicare and Medi-Cal cost reports. Questions on the calculation of the lobbying portion of dues or other associated issues may be directed to me at or 916-673-2020. A copy of this information has been provided to the Medicare Administrative Contractor and the Department of Health Care Services.

CA State Budget Proposal: 2019-20

On January 10, 2019, Gov. Gavin Newsom released the proposed 2019-20 state budget which includes a $144 billion general fund, which is a 4 percent increase over the $138 billion spending plan former Gov. Jerry Brown signed in June.  In remarks this morning, the governor indicated much of the increased spending would go to one-time projects rather than ongoing expenditures.  He also discussed continuing to set money aside in the “rainy day fund.”

The proposed budget will be debated and refined over coming months in the Legislature with a final budget due June 15, 2019. This proposal will be revised as part of the “May Revise” (in mid-May) once California’s revenues are better able to be estimated.

Specific to health issues, please note the following proposals:

  • Increase subsidies through Covered California for individuals with incomes between 250 and 400 percent of the federal poverty level and expand subsidies to individuals with incomes between 400 and 600 percent of the federal poverty level. The increased subsidies will be funded by revenues generated by establishing a state individual mandate, modeled on the federal requirement enacted as part of the ACA.
  • Young immigrants without legal status would be able to enroll in Medi-Cal until age 26. This expansion will provide full-scope coverage to approximately 138,000 undocumented adults in the first year.
  • Using the state’s purchasing power to achieve a single-payer system for prescription drugs in California. The Budget proposes to transition all pharmacy services for Medi-Cal managed care to a fee-for-service benefit to increase drug rebate savings and help the state secure better prices.
    • This proposal could affect the 340B program in which several district/municipal hospitals participate.  The DHLF is working with CHA and other 340B stakeholders so eligible entities can continue to receive the important discounts from this program while complying with administrative restrictions related to double counting the discounts. More information on 340B will be provided as the details become known.
  • To help address the increasing need for public mental health practitioners, the Budget proposal includes $50 million General Fund (one-time expenditure) to increase training opportunities for workforce programs.
  • The Budget proposal includes $25 million to better detect and intervene when young people have had, or are at high risk of experiencing, psychosis. These one-time grant funds will be used for projects that demonstrate innovative approaches to detect and intervene.
  • As you know, California’s 1115 Medicaid waiver includes the Medi-Cal Whole Person Care Pilots, which coordinate health, behavioral health, and social services needs of Medi-Cal beneficiaries. Many of these pilots specifically target the homeless and mentally ill population. This Budget proposal includes a one-time augmentation of $100 million to provide counties or local entities with funding for supportive housing services for individuals who are homeless or are at risk of becoming homeless, with a focus on people with mental illness. The funds will be available for expenditure through June 30, 2025.
  • Continuing efforts established in the 2018 Budget Act, the Budget proposal includes $3.2 billion for supplemental payments and rate increases for physicians, dentists, family planning services, Intermediate Care Facilities for the Developmentally Disabled, HIV/AIDS waiver services.

It also is worth noting that this proposal doesn’t appear to include any funding for Medi-Cal as part of Proposition 55 (the extension of the high-income earners’ tax).  The proposition included a complex formula that could result in some funding for Medi-Cal after other obligations (i.e., education, etc.) are met.  This will be a point of advocacy for the hospital industry as, due to the budget surplus, there could or should be funding available based on the statutory formula.

As noted above, this proposal will be revised and debated over coming months and the DHLF staff and advocacy team will be monitoring the issues of importance to California’s district/municipal public hospitals and will keep you apprised of developments.

If you have any comments or questions on the proposed 2019-20 state budget, please feel free to let me know.

~ Sherreta

Public Charge Letter

December 10, 2018

Samantha Deshommes

Chief, Regulatory Coordination Division

Office of Policy and Strategy

US Citizenship and Immigration Services

U.S. Department of Homeland Security

20 Massachusetts Ave NW

Washington, D.C. 20529-2140


Re: DHS Docket No. USCIS-2010-0012

Dear Ms. Deshommes:

The District Hospital Leadership Forum (DHLF), on behalf of California’s 37 district and municipal public hospitals (DMPH), writes today to express serious concerns about the proposed rule entitled “Inadmissibility on Public Charge Grounds” published on October 10, 2018 in the Federal Register (83 FR 51114), and to urge the Department of Homeland Security (DHS), as a result, to withdraw the proposed rule.  The issue of most concern to us is the impact this policy could have on immigrants’ ability to access timely health care outside of the hospital emergency room. This proposed rule could create barriers to enrollment in Medicaid which would cause patients to skip preventive and other critical medical services. The proposed rule would also put an additional strain on an already fragile medical system by increasing the financial losses hospitals and health systems across the country face when the number of uninsured seeking care increases as a result.

California’s DMPHs are a diverse group of hospitals located throughout California from San Diego County to Modoc County.  Some are very small (three acute beds) but provide vital community services, including emergency and long-term care and are the sole provider in the community.  Other DMPHs are located in suburban/urban areas and are large (500 acute beds) but similarly provide necessary hospital services, such as teaching, trauma, and comprehensive inpatient and outpatient services.  Two-thirds of these hospitals are located in rural California and many are Critical Access Hospitals.  For several of these hospitals, they are the only source of health care in their communities and/or for residents within 100-mile radius.

Under current law, immigrants who are likely to become a burden on the government as demonstrated by receiving cash assistance can already be excluded from obtaining citizenship. This draft rule would expand the definition to include individuals who “use or receive one or more public benefits” including programs like Affordable Care Act subsidies, SNAP (formerly Food Stamps), subsidized benefits under Medicaid, and the Children’s Health Insurance Program. This is a substantial expansion of the definition of a public charge.

The proposed rule allows for determinations of public charge inadmissibility within the context of an immigrant’s overall situation — referred to as the “totality of circumstances” test. The rule proposes using a weighted evaluation system that compiles “positive factors” and “negative factors” to determine whether an immigrant is a public charge. Health Care would be a factor considered, and an individual would be expected to provide their past medical records in some cases. The proposed rule deems health conditions that require treatment to be among the heavily weighed factors. The proposal specifically states that “an alien is at high risk of becoming a public charge if he or she has a medical condition and is unable to show evidence of unsubsidized health insurance.”

We believe that this proposed rule will ultimately encourage immigrants to forgo medical care, both preventive and outpatient primary care services, out of fear that accessing services would make them deemed a burden on the government and could impact their immigration status. Commonly referred to as “care avoidance,” an individual will only seek medical care in emergent situations then as a result. Accessing care in the emergency room costs both the government and the provider more in the end. Additionally, not receiving preventative health care services such as vaccines and screenings also puts a burden on the emergency room as the patient instead shows up seeking treatment for illnesses that could have been prevented or treated earlier in a less expensive setting. Public hospitals like ours would also experience higher rates of uncompensated care which would impact our ability to provide healthcare to all patients in the community who need us, regardless of health insurance status.

The District Hospital Leadership Forum opposes any proposal that would create barriers to health care access. The significant impact on the health care system, including the increase in costs related to using the emergency room as the only place to receive health care, should be taken into consideration, as well as the burden put on the system by ultimately increasing the number of uninsured. For these reasons, the DHLF urges DHS to withdraw the proposed rule. Thank you for the opportunity to submit comments.



Sherreta Lane

Senior Vice President of Policy & Finance

Update on Supplemental Funds / My Medical Leave

At both the CFO and Board meetings last week, we went over the various supplemental funding programs, which I’m summarizing below (including some new information which has come up since last week’s meetings):

AB 113 – The traditional 17-18 program checks were sent to hospitals the end of June.  Most reported receiving them by June 28 (checks were dated June 22).  Unfortunately they were labeled “non DSH” which might have created some confusion.  There should be an additional amount both for the traditional and for the expansion population for 16-17, but there is no additional funding for 15-16 for this program.  There also should be additional funding for the optional population for 17-18.  (Expansion funding for 13-14 and 14-15 for this program also was distributed in June)

AB 915 – DHCS was delayed in processing the AB 915 SFY 16/17 traditional and ACA claims. They are currently processing those claims now and hope to complete those no later than early September 2018.  SFY 17/18 claims will be submitted by providers early in CY 2019.

A question came up at the CFO meeting regarding hospitals that did not submit separate traditional/expansion claims for 13/14 and/or 14/15 and were therefore overpaid (receiving both the 50 percent match on the original claim and the 100 percent match on the follow-up expansion claim the state prepared).  DHLF staff is checking with DHCS on this issue so if you also believe you may have been overpaid, please respond to Erin Clark (

HQAF 4 – This program is complete, but as DHCS does a final reconciliation there is a small amount of funding available to the rural districts for direct grants.  Those final checks should arrive in about five weeks.

HQAF 5 – The direct grant payments are underway and cycle 5 and 6 payments should reach you this month or early next.  This will put DHCS back on schedule so cycle 7 should occur in October and then subsequent payments should be quarterly thereafter.  I’ve attached the schedule for cycles 5 through 8, but the actual amounts will be a little less (reduced by approximately 10 percent) based on collections of the fee from the private hospitals.  As a reminder, these payments are directed to CAH, rural and Medi-Cal DSH eligible hospitals.  All district/municipal hospitals will receive funding from this program and those that do not receive direct grants will get a greater amount from the IGT-generated funds via Medi-Cal managed care.

The IGT-generated funds for HQAF 5 via managed care currently is in the approval process at CMS.  We will keep you apprised but unfortunately these approvals are quite slow.

Directed payments – Possibly in 2019-20, districts/municipal public hospitals will begin the transition in the HQAF to directed payments (currently our funding is considered pass-through payments and CMS is transitioning away from pass-through payments).  Private hospitals will begin the transition in 17-18, so staff will work with the CFOs and other hospital staff to begin the review of the data and discuss distribution probably later this year.  Fortunately, we will be able to use lessons learned from the private hospitals.  Directed payments mean (although CMS could revise this) that an amount of the funding available via IGT-generated funding in HQAF 5 will be based on services provided based on encounter data submitted by the hospitals to the plans to DHCS.  The amount of funding will be divided by the number of contracted inpatient days and contracted outpatient services and then each eligible hospital will receive that amount of funding,  More details to follow on this but the first order of business is to begin to work with the health plans on ensuring encounter data is as accurate as possible.

Rate range – A component of the 17-18 rate range is funding for the ACA expansion population.  This population is paid at a higher federal match than the traditional population (50-50).  The optional population federal match is 95 percent for July through December 2017 and 94 percent for January through June 18.  This means that you will receive greater than the usual 50-50 match on this program  However, it is important to stay in touch with your health plans as DHCS no longer can direct the plans as they have in the past.  The various populations covered by this program is outlined in your contract from DHCS.

Medi-Cal DSH audits – DHCS has contracted with Myers and Stauffer to audit the Medi-Cal DSH program (based on direction by CMS).  Some district/municipal hospitals are hitting their cost-based limit associated with the DSH program, so we want to remind you that some of your supplemental payments (specifically rate range) can be diverted away from hospital revenue IF you use some of the funding to subsidize physicians for their care of Medi-Cal managed care beneficiaries.

PRIME – DY 13 year end reports are due September 30.  Once the report is accepted, DHCS will request your IGT.  It then is generally two to six weeks until you receive the federal match.

Finally, a personal note.  I will be on medical leave beginning July 25 without access to calls or emails.  I’m anticipating a very limited return around August 15 and a full return sometime in September.  In the meantime, please contact Erin Hagstrom Clark at or 916-317-4835 (cell) or 916-673-2020 (office).  And of course, Steve Clark, and advocates Kathryn Scott, Meghan Loper and Charity Bracy (also handling PRIME) also will be available.

17-18 direct grant revised July 2018 to DHCS

DHLF PRIME Legislative Briefing – 9/12/2018

On September 12, the DHLF provided a successful briefing to state legislative staff on district/municipal hospitals’ experience to date with PRIME.

We are very grateful to the hospital representatives that took the time (and, in some cases, significant travel challenges) to come to Sacramento so the legislative staff could hear directly about the good work being done as part of this important program.  Many thanks to Marilouise Salsiccia and Amy Bannister from Hazel Hawkins; Lindsey Arevalos from Lompoc; Sabrina Valade from Washington Hospital and Melanie Van Winkle from Mammoth Hospital for traveling to Sacramento to outline the benefits of PRIME at their specific hospitals as well as providing some patient experiences and successes as a result of the program.

The briefing was well attended (a list of staff and which legislator’s office with which they are affiliated follows) and attendees were very engaged during the 90-minute presentation, asked several thoughtful questions in the general session and took the opportunity to talk individually with hospital representatives from their districts.  As a result of the compelling hospital speakers, it was clear that those in attendance also became enthusiastic about the good work that is a result of the PRIME program at district/municipal hospitals.

I’ve attached the materials we provided to legislative staff.  We will produce some follow-up documents based on actual statistical and anecdotal results from the DY13 reports (once those are available) for subsequent advocacy efforts.

Please let me know if you have any questions about the briefing.


Agnes Lee, Speaker of the Assembly’s Office

Archie, Assembly Republican Fiscal Office

Shae, Assembly Member Flora (Assembly Health Committee)

Robert, Assembly Member Waldron (Assembly Health Committee)

Leigh, Assembly Member Mayes (Assembly Health Committee)

Taylor, Assembly Member Cunningham

Hana, Assembly Member Bigelow

Andrea, Assembly Member Budget

Judy, Assembly Member Wood (Assembly Health Committee)

Michelle, Assembly Member Caballero

Andrea, Assembly Member Aguilar-Curry (Assembly Health Committee)

Carlos and Diego, Assembly Member Levine

Marjorie, Senate President Pro Tem’s office

Joe Parra, Senate Republican Caucus

Jessica, Senator Leyva (Senate Health Committee)

Toby, Senator Monning (Senate Health Committee)

Jorge, Senator Mitchell (Senate Health Committee)

Fernando, Senator Hannah-Beth Jackson

Scott, Senate Budget Committee

Colin, Senator Nielsen (Senate Health Committee)

2018 leg briefing leave behind

Full PRIME examples