Welfare and Institutions Code

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.35. (a) (1) On and after July 1, 1990, drugs included on the Medi-Cal drug formulary shall be included on the list of contract drugs until the department and the manufacturer have concluded contract negotiations or the department suspends the drug from the list of contract drugs pursuant to the provisions of this subdivision. The department shall, in writing, invite any manufacturer with single-source drug products on the formulary as of July 1, 1990, to enter into negotiations relative to the retention of its drug or drugs. As to the issue of cost, the department shall accept the manufacturer’s best price as sufficient for purposes of entering into a contract to retain the drug or drugs on the list of contract drugs. If the department and a manufacturer enter into a contract for retention of a drug or drugs on the list of contract drugs, the drug or drugs shall be retained on the list of contract drugs for the effective term of the contract. If a manufacturer refuses to enter into negotiations with the department pursuant to this subdivision, or if after 30 days of negotiation, the manufacturer has not agreed to execute a contract for a drug at the manufacturer’s best price, the department may suspend from the list of contract drugs the manufacturer’s single-source drug in question for a period of at least 180 days. The department shall lift the suspension upon execution of a contract for that drug. Consistent with the provisions of this section, the department shall delete the Medi-Cal drug formulary specified in paragraphs (b), (c), (d), and (e) of Section 59999 of Title 22 of the California Code of Regulations. (2) On and after July 1, 1990, the director may retain a drug on the Medi-Cal list of contract drugs even if no contract is executed with a manufacturer, if the director determines that an essential need exists for that drug, and there are no other drugs currently on the formulary that meet that need. (3) The director may delete a drug from the list of contract drugs if the director determines that the drug presents problems of safety or misuse. The director’s decision as to safety shall be based upon published medical literature, and the director’s decision as to misuse shall be based on published medical literature and claims data supplied by the fiscal intermediary. (b) Any reference to the Medi-Cal drug formulary by statute or regulation shall be construed as referring to the list of contract drugs. (c) (1) Any drug in the process of being added to the formulary by contract agreement pursuant to Section 14105.3, executed prior to the effective date of this section, shall be added to the list of contract drugs. (2) Contracts pursuant to Section 14105.3 executed prior to January 1, 1991, shall be considered to be contracts executed pursuant to Section 14105.33, and the department shall exempt the drugs included in these contracts from the initial therapeutic category review in which they would normally be considered. (3) Nothing in this section shall be construed to require the department to discontinue negotiations into which it has entered with any manufacturer as of the effective date of this section. Contracts entered into as a result of these negotiations shall be exempt from the initial therapeutic category review in which they would normally be considered. (Amended by Stats. 2002, Ch. 1161, Sec. 60. Effective September 30, 2002.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.36. (a) (1) The Medi-Cal Drug Rebate Fund is hereby created in the State Treasury. (2) Nonfederal moneys collected by the department pursuant to Sections 14105.33, 14105.332, 14105.436 and 14105.86 and Section 1396r-8 of Title 42 of the United States Code, as part of the state’s share of state and federal supplemental Medi-Cal drug rebates, shall be deposited in the Medi-Cal Drug Rebate Fund. (b) Notwithstanding Section 13340 of the Government Code, the funds deposited in the Medi-Cal Drug Rebate Fund shall be continuously appropriated, without regard to fiscal year, to the department for purposes of funding the nonfederal share of health care services for children, adults, seniors, and persons with disabilities enrolled in the Medi-Cal program. (c) Notwithstanding Section 16305.7 of the Government Code, the Medi-Cal Drug Rebate Fund shall contain all interest and dividends earned on moneys in the fund and shall be used only for the purpose identified in subdivision (b). (d) Notwithstanding any other law, the Controller may use the funds in the Medi-Cal Drug Rebate Fund for cashflow loans to the General Fund as provided in Sections 16310 and 16381 of the Government Code. (Added by Stats. 2019, Ch. 38, Sec. 48. (SB 78) Effective June 27, 2019.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.37. (a) The department shall notify each manufacturer of drugs in therapeutic categories selected pursuant to Section 14105.33 of the provisions of Sections 14105.31 to 14105.42, inclusive. (b) If, within 30 days of notification, a manufacturer does not enter into negotiations for a contract pursuant to those sections, the department may suspend or delete from the list of contract drugs, or refuse to consider for addition, drugs of that manufacturer in the selected therapeutic categories. (c) If, after 120 days from the initial notification, a contract is not executed for a drug currently on the list of contract drugs, the department may suspend or delete the drug from the list of contract drugs. (d) If, within 120 days from the initial notification, a contract is executed for a drug currently on the list of contract drugs, the department shall retain the drug on the list of contract drugs. (e) If, within 120 days from the date of the initial notification, a contract is executed for a drug not currently on the list of contract drugs, the department shall add the drug to the list of contract drugs. (f) The department shall terminate all negotiations 120 days after the initial notification. (g) The department may suspend or delete any drug from the list of contract drugs at the expiration of the contract term or when the contract between the department and the manufacturer of that drug is terminated. (h) In the absence of a contract, the department may suspend or delete any drug from the list of contract drugs. (i) Any drug suspended from the list of contract drugs pursuant to this section or Section 14105.35 shall be subject to prior authorization, as if that drug were not on the list of contract drugs. (j) Any drug suspended from the list of contract drugs pursuant to this section or Section 14105.35 may be deleted from the list of contract drugs in accordance with Section 14105.38. (Amended by Stats. 2003, Ch. 230, Sec. 65. Effective August 11, 2003.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.38. When the department determines that a drug should be removed from the list of contract drugs, the department shall provide individual notice to impacted beneficiaries, at least 60 calendar days prior to the drug being removed from the list of contract drugs, that the drug is only obtainable through the prior authorization process. The notice shall include a description of the beneficiary’s right to a fair hearing and shall encourage the beneficiary to consult a physician to determine if an appropriate substitute medication is available from Medi-Cal. The department shall also provide provider notice about the removal at least 60 calendar days prior to the drug being removed from the list of contract drugs on the department’s internet website. (Repealed and added by Stats. 2025, Ch. 21, Sec. 95. (AB 116) Effective June 30, 2025.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.39. (a) (1) A manufacturer of a new single-source drug may request inclusion of its drug on the list of contract drugs pursuant to Section 14105.33 provided all of the following conditions are met: (A) The request is made within 12 months of approval for marketing by the federal Food and Drug Administration. (B) The manufacturer agrees to negotiate a contract with the department to provide the drug at the manufacturer’s best price. (C) (i) The manufacturer provides the department with necessary information, as specified by the department, in the request. (ii) Notwithstanding clause (i), either of the following may be submitted by the manufacturer in lieu of the Summary Basis of Approval prepared by the federal Food and Drug Administration for that drug: (I) The federal Food and Drug Administration’s approval or approvable letter for the drug and federal Food and Drug Administration’s approved labeling. (II) The federal Food and Drug Administration’s medical officers’ and pharmacologists’ reviews and the federal Food and Drug Administration’s approved labeling. (D) The department had concluded contracting for the therapeutic category in which the drug is included prior to approval of the drug by the federal Food and Drug Administration. (2) Within 90 days from receipt of the request, the department shall evaluate the request using the criteria identified in subdivision (d), and shall submit the drug to the Medi-Cal Contract Drug Advisory Committee. (b) Any petition for the addition to or deletion of a drug to the Medi-Cal drug formulary submitted prior to July 31, 1990, shall be deemed to be denied. A manufacturer who has submitted a petition deemed denied may request inclusion of that drug on the list of contract drugs provided all of the following conditions are met: (1) The manufacturer agrees to negotiate for a contract with the department to provide the drug at the manufacturer’s best price. (2) The manufacturer provides the department with necessary information, as specified by the department, in the request. (3) The manufacturer submits the request to the department prior to October 1, 1990. (c) (1) To ensure that the health needs of Medi-Cal beneficiaries are met consistent with the intent of this chapter, the department shall, when evaluating a decision to execute a contract, and when evaluating drugs for retention on, addition to, or deletion from, the list of contract drugs, use all of the following criteria: (A) The safety of the drug. (B) The effectiveness of the drug. (C) The essential need for the drug. (D) The potential for misuse of the drug. (E) The cost of the drug. (2) The deficiency of a drug when measured by one of these criteria may be sufficient to support a decision that the drug should not be added or retained, or should be deleted from the list. However, the superiority of a drug under one criterion may be sufficient to warrant the addition or retention of the drug, notwithstanding a deficiency in another criterion. (d) (1) A manufacturer of single-source drugs denied a contract pursuant to this section or Section 14105.33 or 14105.37, may file an appeal of that decision with the director within 30 calendar days of the department’s written decision. (2) Within 30 calendar days of the manufacturer’s appeal, the director shall request a recommendation regarding the appeal from the Medi-Cal Contract Drug Advisory Committee. The committee shall provide its recommendation in writing, within 30 calendar days of the director’s request. (3) The director shall issue a final decision on the appeal within 30 calendar days of the recommendation. (e) Deletions made to the list of contract drugs, including those made pursuant to Section 14105.37, shall become effective no sooner than 30 days after publication of the changes in provider bulletins. (f) A manufacturer of a drug deleted from, or not added to, the list of contract drugs may request inclusion of the drug on the list of preferred prior authorization drugs that is hereby established as a subset of the list of contract drugs. To ensure that the health needs of Medi-Cal beneficiaries are met, the department shall evaluate the request pursuant to subdivision (c). The department shall give preference for prior authorization drugs based on the medical need or continuing care of the beneficiary. The department may contract with manufacturers of drugs on the list of preferred prior authorization drugs. Contracts executed pursuant to this subdivision are subject to Section 14105.33. (g) Changes made to the list of contract drugs under this or any other section are exempt from the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and shall not be subject to the review and approval of the Office of Administrative Law. (Amended by Stats. 2002, Ch. 1161, Sec. 63. Effective September 30, 2002.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.395. (a) The department may implement utilization controls through the establishment of guidelines, protocols, algorithms, or criteria for drugs, medical supplies, durable medical equipment, and enteral formulae. The department shall publish the guidelines, protocols, algorithms, or criteria in the pharmacy and medical provider manuals. (b) The department shall issue providers written notice of changes pursuant to subdivision (a) at least 30 days prior to implementation. (c) Changes made pursuant to this section are exempt from the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and shall not be subject to the review and approval of the Office of Administrative Law. The department shall consult with interested parties and appropriate stakeholders in implementing this section with respect to all of the following: (1) Notifying the provider representatives of the proposed change. (2) Scheduling at least one meeting to discuss the change. (3) Allowing for written input regarding the change. (4) Providing advance notice on the implementation and effective date of the change. (Added by Stats. 2003, Ch. 230, Sec. 66. Effective August 11, 2003.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.4. (a) The director shall appoint a Medi-Cal Contract Drug Advisory Committee for the purpose of providing scientific and medical analysis on drugs contained on the list of contract drugs. The duties of the committee shall be as follows: (1) To review drugs in the Medi-Cal list of contract drugs and make written recommendations to the director as to the addition of any drug or the deletion of any drug from the list. These recommendations shall be in accordance with subdivision (c) of Section 14105.39. (2) To review and report in writing to the director as to the comparative therapeutic effect of drugs in accordance with Section 14053.5. (3) To prepare a fair, impartial, and independent recommendation in writing, regarding appeals from manufacturers made pursuant to subdivision (d) of Section 14105.39. (b) The committee shall consist of at least one representative from each of the following groups: (1) Physicians. (2) Pharmacists. (3) Schools of pharmacy or pharmacologists. (4) Medi-Cal beneficiaries. (c) Members of the committee shall be reimbursed for necessary travel and other expenses incurred in the performance of official committee duties. (d) In order to provide sufficient scientific information and analysis in the therapeutic categories under review, the director may replace a representative if required for specific expertise. (e) The director shall notify the committee of the decisions made on the recommendations. (Amended (as amended by Stats. 2000, Ch. 93, Sec. 77) by Stats. 2002, Ch. 1161, Sec. 65. Effective September 30, 2002.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.405. (a) A Medi-Cal beneficiary, within 90 days of receipt of the director’s notice to beneficiaries pursuant to subdivision (i) of Section 14105.33, informing them of the decision to delete or suspend a drug from the list of contract drugs, may request a fair hearing pursuant to Chapter 7 (commencing with Section 10950) of Part 2. (b) Any beneficiary filing a fair hearing request regarding the deletion or suspension of a drug from the list of contract drugs shall be granted a treatment authorization request for that drug until a final decision is adopted by the director. Should the beneficiary seek judicial review of the director’s decision, a treatment authorization request shall be granted for that drug until a final decision is issued by the court. (c) (1) Any Medi-Cal beneficiary, within one year of the director’s decision pursuant to Section 10959, may file a petition with the superior court, under the provisions of Section 1094.5 of the Code of Civil Procedure, praying for a review of both the legal and factual basis for the director’s decision. (2) The director shall be the sole respondent in these proceedings. (d) Any Medi-Cal beneficiary injured as a result of being denied a drug which is determined to be medically necessary may sue for injunctive or declaratory relief to review the director’s decision to delete or suspend a drug from the list of contract drugs. (Amended by Stats. 2002, Ch. 1161, Sec. 66. Effective September 30, 2002.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.406. The director shall, in considering suspension or deletion of drugs from the list of contract drugs, ensure that the department has the ability to process drug treatment authorization requests (TARs) without substantial degradation of the level of service, including response time, to providers which was in effect July 1, 1990. In considering suspension or deletion of drugs, the director shall seek the advice of the Chief of the Field Services Branch and the Medi-Cal Contract Drug Advisory Committee. If the treatment authorization request reports provided in subdivision (b) of Section 14105.42 indicate a substantial degradation in the level of service, including response time, for processing TARs, the director shall, within 60 days, hold a public hearing on the functioning of the TAR system. Subsequent to the hearing, the director shall consult with at least two members of each group represented on the Medi-Cal Contract Drug Advisory Committee as provided in subdivision (b) of Section 14105.4 and take appropriate action to remedy the problem areas discussed in the report and in the public hearing. Based upon the information gathered as a result of the reports and public hearing referred to above, and in consultation with the Medi-Cal Contract Drug Advisory Committee, the director may add drugs which previously had been suspended or deleted to the list of contract drugs. (Added by Stats. 1990, Ch. 457, Sec. 13. Effective July 31, 1990.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.41. Moneys accruing to the department from contracts executed pursuant to Section 14105.33 shall be deposited in the Health Care Deposit Fund, and shall be subject to appropriation by the Legislature. (Amended (as amended by Stats. 2000, Ch. 93, Sec. 80) by Stats. 2002, Ch. 1161, Sec. 68. Effective September 30, 2002.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.42. (a) The department shall report to the Legislature after the first three major therapeutic categories have been reviewed and contracts executed. The report shall include the estimated savings, number of manufacturers entering negotiations, number of contracts executed, number of drugs added and deleted, and impact on Medi-Cal beneficiaries and providers. (b) The department shall report to the Legislature, through the annual budget process, on the cost-effectiveness of contracts executed pursuant to Section 14105.33. (Amended by Stats. 2002, Ch. 1161, Sec. 69. Effective September 30, 2002.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.425. The provisions of Sections 14105.4 to 14105.41, inclusive, and Section 14105.65 shall not preclude the department from taking emergency regulatory action as it deems appropriate. This section shall become operative on January 1, 1997. (Added by renumbering Section 14105.42 (as amended by Stats. 1992, Ch. 723) by Stats. 2000, Ch. 93, Sec. 83. Effective July 7, 2000.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.43. (a) (1) Notwithstanding other provisions of this chapter, any drug which is approved by the federal Food and Drug Administration for use in the treatment of acquired immunodeficiency syndrome (AIDS) or an AIDS-related condition shall be deemed to be approved for addition to the Medi-Cal list of contract drugs only for the purpose of treating AIDS or an AIDS-related condition, for the period prior to the completion of the procedures established pursuant to Section 14105.33. (2) In addition to any drug that is deemed to be approved pursuant to paragraph (1), any drug that meets any of the following criteria shall be a Medi-Cal benefit, subject to utilization controls: (A) Any vaccine to protect against human immunodeficiency virus (HIV) infection. (B) Any antiviral agent, immune modulator, or other agent to be administered to persons who have been infected with human immunodeficiency virus to counteract the effects of that infection. (C) Any drug or biologic used to treat opportunistic infections associated with acquired immune deficiency syndrome, that have been found to be medically accepted indications and that has either been approved by the federal Food and Drug Administration or recognized for that use in a compendia listed in Section 1927 of the federal Social Security Act (42 U.S.C. Sec. 1396r-8). (D) Any drug or biologic used to treat the chemotherapy-induced suppression of the human immune system resulting from the treatment of acquired immune deficiency syndrome. (3) The department shall add any drug deemed to be approved pursuant to paragraph (1) to the Medi-Cal list of contract drugs or allow the provision of the drug as a Medi-Cal benefit, subject to utilization controls, pursuant to paragraph (2), only if the manufacturer of the drug has executed a contract with the Centers for Medicare and Medicaid Services which provides for rebates in accordance with Section 1396r-8 of Title 42 of the United States Code. (b) Any drug deemed to be approved pursuant to paragraph (1) of subdivision (a) shall be immediately added to the Medi-Cal list of contract drugs, and shall be exempt from the contract requirements of Section 14105.33. (c) If it is determined pursuant to subdivision (c) of Section 14105.39 that a drug to which subdivision (a) applies should not be placed on the Medi-Cal list of contract drugs, that drug shall no longer be deemed to be approved for addition to the list of contract drugs pursuant to subdivision (a). (Amended by Stats. 2009, Ch. 479, Sec. 5. (AB 830) Effective January 1, 2010.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.435. (a) Within 60 days of the approval of a drug in accordance with subdivision (a) of Section 14105.43, the department shall assign to that drug a reimbursement code, and provide notice to providers that the drug is on the Medi-Cal list of contract drugs. (b) In the event that a manufacturer has not notified the department in writing of the approval of a drug by the United States Food and Drug Administration for the treatment of acquired immune deficiency syndrome (AIDS) or an AIDS-related condition within 15 days of that approval, the department shall be granted an additional 30 days to comply with subdivision (a). Written notification from the drug manufacturer shall include a copy of the United States Food and Drug Administration approval letter and the official labeling for the drug. (Added by Stats. 1992, Ch. 949, Sec. 2. Effective January 1, 1993.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.436. (a) Effective July 1, 2002, all pharmaceutical manufacturers shall provide to the department a state rebate, in addition to rebates pursuant to other provisions of state or federal law, for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2 and reimbursed through the Medi-Cal outpatient fee-for-service drug program. The state rebate shall be negotiated as necessary between the department and the pharmaceutical manufacturer. The negotiations shall take into account offers such as rebates, discounts, disease management programs, and other cost savings offerings and shall be retroactive to July 1, 2002. (b) The department may use existing administrative mechanisms for any drug for which the department does not obtain a rebate pursuant to subdivision (a). The department may only use those mechanisms in the event that, by February 1, 2003, the manufacturer refuses to provide the additional rebate. This subdivision shall become inoperative on January 1, 2010. (c) For purposes of this section, “Medi-Cal utilization data” means the data used by the department to reimburse providers under all programs that qualify for federal drug rebates pursuant to Section 1927 of the federal Social Security Act (42 U.S.C. Sec. 1396r-8) or that otherwise qualify for federal funds under Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.) pursuant to the Medicaid state plan or waivers. Medi-Cal utilization data excludes data from covered entities identified in Section 256b(a)(4) of Title 42 of the United States Code in accordance with Sections 256b(a)(5)(A) and 1396r-8(a)(5)(C) of Title 42 of the United States Code, and those capitated plans that include a prescription drug benefit in the capitated rate and that have negotiated contracts for rebates or discounts with manufacturers. (d) Upon implementation of paragraphs (4) and (5) of subdivision (b) of Section 14105.33 for drugs pursuant to this section, subdivisions (a) and (c) shall become inoperative and “utilization data” shall be described pursuant to subdivision (b) of Section 14105.33. The department shall post on its internet website a notice that it has implemented paragraphs (4) and (5) of subdivision (b) of Section 14105.33 for drugs pursuant to this section. (e) Effective January 1, 2026, all pharmaceutical manufacturers renewing or entering new state rebate agreements shall provide to the department a state rebate, in addition to rebates pursuant to other provisions of state or federal law, in the following amounts based on Medi-Cal utilization data for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2: (1) An amount not less than 20 percent of the average manufacturer price if the federal rebate is less than 50 percent of the average manufacturer price. (2) An amount not less than 15 percent of the average manufacturer price if the federal rebate is 50 percent or greater of the average manufacturer price. (f) Pharmaceutical manufacturers shall, by January 1, 2010, enter into a supplemental rebate agreement for the rebate required in subdivision (e) for drug products added to the Medi-Cal list of contract drugs on or before December 31, 2009. (g) Effective January 1, 2010, all pharmaceutical manufacturers who have not entered into a supplemental rebate agreement pursuant to subdivisions (e) and (f) shall provide to the department a state rebate, in addition to rebates pursuant to other provisions of state or federal law, equal to an amount not less than 20 percent of the average manufacturer price based on Medi-Cal utilization data for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2 prior to January 1, 2010. If the pharmaceutical manufacturer does not enter into a supplemental rebate agreement by March 1, 2010, the manufacturer’s drug product shall be made available only through an approved treatment authorization request pursuant to subdivision (i). (h) For a drug product added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2 on or after January 1, 2026, a pharmaceutical manufacturer shall provide to the department a state rebate pursuant to subdivision (e). If the pharmaceutical manufacturer does not enter into a supplemental rebate agreement within 60 days after the addition of the drug to the Medi-Cal list of contract drugs, the manufacturer shall provide to the department a state rebate equal to not less than 25 percent of the average manufacturer price based on Medi-Cal utilization data for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2. If the pharmaceutical manufacturer does not enter into a supplemental rebate agreement within 120 days after the addition of the drug to the Medi-Cal list of contract drugs, the pharmaceutical manufacturer’s drug product shall be made available only through an approved treatment authorization request pursuant to subdivision (i). For supplemental rebate agreements executed more than 120 days after the addition of the drug product to the Medi-Cal list of contract drugs, the state rebate shall equal an amount not less than 25 percent of the average manufacturer price based on Medi-Cal utilization data for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2. (i) Notwithstanding any other law, drug products added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2 of manufacturers who do not execute an agreement to pay additional rebates pursuant to this section shall be available only through an approved treatment authorization request. (j) Changes made to the Medi-Cal list of contract drugs under this section shall be exempt from the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and shall not be subject to the review and approval of the Office of Administrative Law. (k) This section shall become operative on January 1, 2026. (Repealed (in Sec. 96) and added by Stats. 2025, Ch. 21, Sec. 97. (AB 116) Effective June 30, 2025. Operative January 1, 2026, by its own provisions.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.44. (a) The department shall establish an expedited review process to examine the effectiveness of investigational drugs and investigational services, and their eligibility for Medi-Cal reimbursement. (b) The department shall adopt emergency regulations pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 3 of the Government Code to implement subdivision (a). The adoption of the regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health or safety. Notwithstanding the provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, emergency regulations adopted by the department in order to implement subdivision (b) shall not be subject to the review and approval of the Office of Administrative Law. These regulations shall become effective immediately upon filing with the Secretary of State. (Added by Stats. 1987, Ch. 1470, Sec. 2. Effective September 30, 1987.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.45. (a) For purposes of this section, the following definitions shall apply: (1) “Actual acquisition cost” has the same meaning as that term is defined in Section 447.502 of Title 42 of the Code of Federal Regulations. The actual acquisition cost shall not be considered confidential and shall be subject to disclosure pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). (2) “Average manufacturers price” means the price reported to the department by the federal Centers for Medicare and Medicaid Services pursuant to Section 1927 of the Social Security Act (42 U.S.C. Sec. 1396r-8). (3) “Average wholesale price” means the price for a drug product listed as the average wholesale price in the department’s primary price reference source. (4) “Blood factors” has the same meaning as that term is defined in Section 14105.86. (5) “Federal upper limit” means the maximum per unit reimbursement when established by the federal Centers for Medicare and Medicaid Services. (6) “Generically equivalent drugs” means drug products with the same active chemical ingredients of the same strength and dosage form, and of the same generic drug name, as determined by the United States Adopted Names (USAN) Council and accepted by the federal Food and Drug Administration (FDA), as those drug products having the same chemical ingredients. (7) “Legend drug” means any drug whose labeling states “Caution: Federal law prohibits dispensing without prescription,” “Rx only,” or words of similar import. (8) “Maximum allowable ingredient cost” (MAIC) means the maximum amount the department will reimburse Medi-Cal pharmacy providers for generically equivalent drugs. (9) “Innovator multiple source drug,” “noninnovator multiple source drug,” and “single source drug” have the same meaning as those terms are defined in Section 1396r-8(k)(7) of Title 42 of the United States Code. (10) “Nonlegend drug” means any drug whose labeling does not contain the statement referenced in paragraph (7). (11) “Pharmacy warehouse” means a physical location licensed as a wholesaler for prescription drugs that acts as a central warehouse and performs intracompany sales or transfers of those drugs to a group of pharmacies under common ownership and control. (12) “Professional dispensing fee” has the same meaning as that term is defined in Section 447.502 of Title 42 of the Code of Federal Regulations. (13) “Specialty drugs” means drugs determined by the department pursuant to subdivision (f) of Section 14105.3 to generally require special handling, complex dosing regimens, specialized self-administration at home by a beneficiary or caregiver, or specialized nursing facility services, or may include extended patient education, counseling, monitoring, or clinical support. (14) “Volume weighted average” means the aggregated average volume for a group of legend or nonlegend drugs, weighted by each drug’s percentage of the group’s total volume in the Medi-Cal fee-for-service program during the previous six months. For purposes of this paragraph, volume is based on the standard billing unit used for the legend or nonlegend drugs. (15) “Wholesaler” has the same meaning as that term is defined in Section 4043 of the Business and Professions Code. (16) “Wholesaler acquisition cost” means the price for a drug product listed as the wholesaler acquisition cost in the department’s primary price reference source. (b) (1) Reimbursement to Medi-Cal pharmacy providers for legend and nonlegend drugs shall not exceed the lowest of either of the following: (A) The drug ingredient cost plus a professional dispensing fee. (B) The pharmacy’s usual and customary charge as defined in Section 14105.455. (2) (A) Effective for dates of service on or before March 31, 2017, the professional dispensing fee shall be seven dollars and twenty-five cents ($7.25) per dispensed prescription, and the professional dispensing fee for legend drugs dispensed to a beneficiary residing in a skilled nursing facility or intermediate care facility shall be eight dollars ($8) per dispensed prescription. For purposes of this paragraph, “skilled nursing facility” and “intermediate care facility” have the same meaning as those terms are defined in Division 5 (commencing with Section 70001) of Title 22 of the California Code of Regulations. (B) Effective for dates of service on or after April 1, 2017, the professional dispensing fee shall be based upon a pharmacy’s total, both Medicaid and non-Medicaid, annual claim volume of the previous year as follows: (i) Less than 90,000 claims per year, the professional dispensing fee shall be thirteen dollars and twenty cents ($13.20). (ii) Ninety thousand or more claims per year, the professional dispensing fee shall be ten dollars and five cents ($10.05). (C) If the department determines that a change in the amount of the professional dispensing fee is necessary pursuant to this section in order to meet federal Medicaid requirements, the department shall establish a new professional dispensing fee through the state budget process. (i) When establishing the new professional dispensing fee or fees, the department shall establish the professional dispensing fee or fees consistent with Section 447.518(d) of Title 42 of the Code of Federal Regulations. (ii) The department shall consult with interested parties and appropriate stakeholders in implementing this subparagraph. (3) The department shall establish the drug ingredient cost of legend and nonlegend drugs as follows: (A) Effective for dates of service on or before March 31, 2017, the drug ingredient cost shall be equal to the lowest of the average wholesale price minus 17 percent, the actual acquisition cost, the federal upper limit, or the MAIC. (B) Effective for dates of service on or after April 1, 2017, the drug ingredient cost shall be equal to the lowest of the actual acquisition cost, the federal upper limit, or the MAIC. (C) For blood factors, the drug ingredient cost shall be established pursuant to Section 14105.86. (D) Average wholesale price shall not be used to establish the drug ingredient cost once the department has determined that the actual acquisition cost methodology has been fully implemented. (4) For purposes of paragraph (3), the department may establish a list of MAICs for generically equivalent drugs. If the department establishes a list of MAICs for generically equivalent drugs, the department shall update the list of MAICs and establish additional MAICs in accordance with all of the following: (A) The department shall establish a MAIC only when three or more generically equivalent drugs are available for purchase and dispensing by retail pharmacies in California. (B) The department shall base the MAIC on the mean of the average manufacturer’s price of drugs generically equivalent to the particular innovator drug plus a percent markup determined by the department to be necessary for the MAIC to represent the average purchase price paid by retail pharmacies in California. (C) If average manufacturer prices are unavailable, the department shall establish the MAIC in one of the following ways: (i) Based on the volume weighted average of wholesaler acquisition costs of drugs generically equivalent to the particular innovator drug plus a percent markup determined by the department to be necessary for the MAIC to represent the average purchase price paid by retail pharmacies in California. (ii) Pursuant to a contract with a vendor for the purpose of surveying drug price information, collecting data, and calculating a proposed MAIC. (iii) Based on the volume weighted actual acquisition cost of drugs generically equivalent to the particular innovator drug adjusted by the department to represent the average purchase price paid by Medi-Cal pharmacy providers. (D) The department shall publish the list of MAICs in pharmacy provider bulletins and manuals, update the MAICs at least annually, and notify Medi-Cal providers at least 30 days prior to the effective date of a MAIC. (E) The department shall establish a process for providers to seek a change to a specific MAIC when the providers believe the MAIC does not reflect current available market prices. If the department determines a MAIC change is warranted, the department may update a specific MAIC prior to notifying providers. (F) In determining the average purchase price, the department shall consider the provider-related costs of the products that include, but are not limited to, shipping, handling, and storage. Costs of the provider that are included in the costs of the dispensing shall not be used to determine the average purchase price. (5) (A) The department may establish the actual acquisition cost in one of the following ways: (i) Based on the volume weighted actual acquisition cost adjusted by the department to verify that the actual acquisition cost represents the average purchase price paid by retail pharmacies in California. (ii) Based on the proposed actual acquisition cost as calculated by the vendor pursuant to subparagraph (B). (iii) Based on a national pricing benchmark obtained from the federal Centers for Medicare and Medicaid Services or on a similar benchmark listed in the department’s primary price reference source adjusted by the department to verify that the actual acquisition cost represents the average purchase price paid by retail pharmacies in California. (B) For the purposes of paragraph (3), the department may contract with a vendor for the purposes of surveying drug price information, collecting data from providers, wholesalers, or drug manufacturers, and calculating a proposed actual acquisition cost. (C) (i) Medi-Cal pharmacy providers shall submit drug price information to the department or a vendor designated by the department for the purposes of establishing the actual acquisition cost. The information submitted by pharmacy providers shall include, but not be limited to, invoice prices and all discounts, rebates, and refunds known to the provider that would apply to the acquisition cost of the drug products purchased during the calendar quarter. Pharmacy warehouses shall be exempt from the survey process, but shall provide drug cost information upon audit by the department for the purposes of validating individual pharmacy provider acquisition costs. (ii) Pharmacy providers that fail to submit drug price information to the department or the vendor as required by this subparagraph shall receive notice that if they do not provide the required information within five working days, they shall be subject to suspension under subdivisions (a) and (c) of Section 14123. (D) (i) For new drugs or new formulations of existing drugs, if drug price information is unavailable pursuant to clause (i) of subparagraph (C), drug manufacturers and wholesalers shall submit drug price information to the department or a vendor designated by the department for the purposes of establishing the actual acquisition cost. Drug price information shall include, but not be limited to, net unit sales of a drug product sold to retail pharmacies in California divided by the total number of units of the drug sold by the manufacturer or wholesaler in a specified period of time determined by the department. (ii) Drug products from manufacturers and wholesalers that fail to submit drug price information to the department or the vendor as required by this subparagraph shall not be a reimbursable benefit of the Medi-Cal program for those manufacturers and wholesalers until the department has established the actual acquisition cost for those drug products. (E) Drug pricing information provided to the department or a vendor designated by the department for the purposes of establishing the actual acquisition cost pursuant to this section shall be confidential and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). (F) Prior to the implementation of an actual acquisition cost methodology, the department shall collect data through a survey of pharmacy providers for purposes of establishing a professional dispensing fee or fees in compliance with federal Medicaid requirements. (i) The department shall seek stakeholder input on the retail pharmacy factors and elements used for the pharmacy survey relative to both actual acquisition costs and professional dispensing costs. (ii) For drug products provided by pharmacy providers pursuant to subdivision (f) of Section 14105.3, a differential professional fee or payment for services to provide specialized care may be considered as part of the contracts established pursuant to that section. (G) When the department implements the actual acquisition cost methodology, the department shall update the Medi-Cal claims processing system to reflect the actual acquisition cost of drugs not later than 30 days after the department has established actual acquisition cost pursuant to subparagraph (A). (H) Notwithstanding any other law, if the department implements actual acquisition cost pursuant to clause (i) or (ii) of subparagraph (A), the department shall update actual acquisition costs at least every three months and notify Medi-Cal providers at least 30 days prior to the effective date of any change in an actual acquisition cost. (I) The department shall make available a process for providers to seek a change to a specific actual acquisition cost when the providers believe the actual acquisition cost does not reflect current available market prices. If the department determines an actual acquisition cost change is warranted, the department may update a specific actual acquisition cost prior to notifying providers. (c) The director shall implement this section in a manner that is consistent with federal Medicaid law and regulations. The director shall seek any necessary federal approvals for the implementation of this section. This section shall be implemented only to the extent that federal approval is obtained. (d) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of a provider bulletin or notice, policy letter, or other similar instructions, without taking regulatory action. (e) The department may enter into contracts with a vendor for the purposes of implementing this section on a bid or nonbid basis. In order to achieve maximum cost savings, the Legislature declares that an expedited process for contracts under this section is necessary. Therefore, contracts entered into to implement this section, and all contract amendments and change orders, shall be exempt from Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code. (f) (1) The rates provided for in this section shall be implemented only if the director determines that the rates will comply with applicable federal Medicaid requirements and that federal financial participation will be available. (2) In determining whether federal financial participation is available, the director shall determine whether the rates comply with applicable federal Medicaid requirements, including those set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code. (3) To the extent that the director determines that the rates do not comply with applicable federal Medicaid requirements or that federal financial participation is not available with respect to any rate of reimbursement described in this section, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with federal Medicaid requirements. (g) The director shall seek any necessary federal approvals for the implementation of this section. (h) This section shall not be construed to require the department to collect cost data, to conduct cost studies, or to set or adjust a rate of reimbursement based on cost data that has been collected. (i) Effective for dates of service on or after April 1, 2017, adjustments to pharmacy drug product payments pursuant to Section 14105.192 shall no longer apply. (j) Prior to implementation of this section, the department shall provide the appropriate fiscal and policy committees of the Legislature with information on the department’s plan for implementation of the actual acquisition cost methodology pursuant to this section. (Amended by Stats. 2021, Ch. 615, Sec. 450. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.451. (a) (1) The Legislature finds and declares all of the following: (A) The United States Department of Health and Human Services has identified the critical need for state Medicaid agencies to establish pharmacy reimbursement rates based on a pricing benchmark that reflects actual acquisition costs. (B) The Medi-Cal program currently uses a methodology based on average wholesale price (AWP). (C) Investigations by the federal Office of Inspector General have found that average wholesale price is inflated relative to average acquisition cost. (2) Therefore, it is the intent of the Legislature to enact legislation by August 1, 2011, that provides for development of a new reimbursement methodology that will enable the department to achieve savings while continuing to reimburse pharmacy providers in compliance with federal law. (b) Subject to Section 14105.45, the department may require providers, manufacturers, and wholesalers to submit any data the director determines necessary or useful in preparing for the transition from a methodology based on average wholesale price to a methodology based on actual acquisition cost. (c) If the AWP ceases to be listed by the department’s primary price reference source vendor, the department may direct the fiscal intermediary to establish a process with the primary price reference source vendor to temporarily report the AWP consistent with the definition of AWP in Section 14105.45. If this process is established, it shall be limited in scope and duration, and shall cease when the department has fully implemented the average acquisition cost methodology pursuant to Section 14105.45. (Amended by Stats. 2011, Ch. 29, Sec. 15. (AB 102) Effective June 29, 2011.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.455. (a) Pharmacy providers shall submit their usual and customary charge when billing the Medi-Cal program for prescribed drugs. (b) “Usual and customary charge” means the lower of the following: (1) The lowest price reimbursed to the pharmacy by other third-party payers in California, excluding Medi-Cal managed care plans and Medicare Part D prescription drug plans. (2) The lowest price routinely offered to any segment of the general public. (c) Donations or discounts provided to a charitable organization are not considered usual and customary charges. (d) Pharmacy providers shall keep and maintain records of their usual and customary charges for a period of three years from the date the service was rendered. (e) Payment to pharmacy providers shall be the lower of the pharmacy’s usual and customary charge or the reimbursement rate pursuant to subdivision (b) of Section 14105.45. (f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of a provider bulletin or notice, policy letter, or other similar instructions, without taking regulatory action. (Amended by Stats. 2011, Ch. 29, Sec. 16. (AB 102) Effective June 29, 2011.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.456. (a) For purposes of this section, the following definitions shall apply: (1) “Blood factors” has the same meaning as that term is defined in Section 14105.86. (2) “Generically equivalent drugs” has the same meaning as that term is defined in Section 14105.45. (3) “Legend drug” has the same meaning as that term is defined in Section 14105.45. (4) “Medicare rate” means the rate of reimbursement established by the Centers for Medicare and Medicaid Services for the Medicare Program. (5) “Nonlegend drug” has the same meaning as that term is defined in Section 14105.45. (6) “Pharmacy rate of reimbursement” means the reimbursement to a Medi-Cal pharmacy provider pursuant to the provisions of paragraph (3) of subdivision (b) of Section 14105.45. (7) “Physician-administered drug” means any legend drug, nonlegend drug, or vaccine administered or dispensed to a beneficiary by a Medi-Cal provider other than a pharmacy provider and billed to the department on a fee-for-service basis. (8) “Volume-weighted average” means the aggregated average volume for generically equivalent drugs, weighted by each drug’s percentage of the total volume in the Medi-Cal fee-for-service program during the previous six months. For purposes of this paragraph, volume is based on the standard billing unit used for the generically equivalent drugs. (b) The department may reimburse providers for a physician-administered drug using either a Healthcare Common Procedure Coding System code or a National Drug Code. (c) The Healthcare Common Procedure Coding System code rate of reimbursement for a physician-administered drug shall be equal to the volume-weighted average of the pharmacy rate of reimbursement for generically equivalent drugs. The department shall publish the Healthcare Common Procedure Coding System code rates of reimbursement. (d) The National Drug Code rate of reimbursement shall equal the pharmacy rate of reimbursement. (e) Notwithstanding subdivisions (c) and (d), the department may reimburse providers for physician-administered drugs, with the exception of blood factors, at a rate not less than the Medicare rate. (f) Physician-administered drugs that are blood factors shall be reimbursed pursuant to the provisions of subdivision (b) of Section 14105.86. (g) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this section by means of a provider bulletin or notice, policy letter, or other similar instructions, without taking regulatory action. (h) (1) The rates provided for in this section shall be implemented commencing January 1, 2011, but only if the director determines that the rates comply with applicable federal Medicaid requirements and that federal financial participation will be available. (2) In assessing whether federal financial participation is available, the director shall determine whether the rates comply with the federal Medicaid requirements, including those set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code. To the extent that the director determines that a rate of reimbursement described in this section does not comply with the federal Medicaid requirements, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with the federal Medicaid requirements. (i) The director shall seek any necessary federal approval for the implementation of this section. To the extent that federal financial participation is not available with respect to a rate of reimbursement described in this section, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with the federal Medicaid requirements. (Amended by Stats. 2017, Ch. 52, Sec. 28. (SB 97) Effective July 10, 2017.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.46. (a) For purposes of this section: (1) “Covered entity” means a provider defined as a covered entity in Section 256b of Title 42 of the United States Code. (2) “340B” means the discount drug purchasing program described in Section 256b of Title 42 of the United States Code. (b) A covered entity shall dispense only 340B drugs to Medi-Cal beneficiaries. (c) If a covered entity is unable to purchase a specific 340B drug, the covered entity may dispense a drug purchased at regular drug wholesale rates to a Medi-Cal beneficiary. If a covered entity dispenses a drug purchased at regular drug wholesale rates pursuant to this subdivision, the covered entity is required to maintain documentation of their inability to obtain the 340B drug. (d) A covered entity shall bill an amount not to exceed the entity’s actual acquisition cost for the drug, as charged by the manufacturer at a price consistent with Section 256b of Title 42 of the United States Code plus the professional fee pursuant to Section 14105.45 or the dispensing fee pursuant to Section 14132.01. (e) A covered entity shall identify a 340B drug on the claim submitted to the Medi-Cal program for reimbursement. (f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may take the actions specified in this section by means of a provider bulletin or notice, policy letter, or other similar instructions, without taking regulatory action. (Added by Stats. 2009, 4th Ex. Sess., Ch. 5, Sec. 40. Effective July 28, 2009.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.467. (a) The department shall establish, implement, and maintain a supplemental payment pool for nonhospital 340B community clinics, subject to an appropriation by the Legislature. (b) Beginning January 1, 2021, and any subsequent fiscal year to the extent funds are appropriated by the Legislature for the purpose described in this section, the department shall make available fee-for-service-based supplemental payments from a fixed-amount payment pool to qualifying nonhospital 340B community clinics in accordance with this section and any terms of federal approval obtained pursuant to subdivision (f). (c) (1) On or before July 15, 2020, the department shall establish a stakeholder process, which shall include representatives of qualifying nonhospital 340B community clinics. Representatives shall be geographically diverse and consist of qualifying nonhospital 340B community clinics with differing pharmacy arrangements, including those that operate in-house pharmacies and those with contract pharmacy arrangements. The stakeholder process shall be utilized to develop and implement the methodology for distribution of supplemental pool payments to qualifying nonhospital 340B community clinics. This shall include the eligibility criteria for receipt of supplemental payments, the aggregate amount of pool funding available in a respective fiscal year, the criteria for apportioning the pool funding among qualifying nonhospital 340B community clinics, and the timing, frequency, and amount of the resultant supplemental payments. (2) The department shall conduct at least three meetings with stakeholders and shall finalize the methodology for distribution no later than October 1, 2020. (d) (1) For any fiscal year that the department implements this section, the aggregate amount of supplemental payments available shall not exceed the pool amount established by the department for the respective fiscal year pursuant to subdivision (b). (2) For any fiscal year that the department implements this section, the supplemental payment amounts received by a qualifying nonhospital 340B community clinic shall not exceed the apportioned amounts of the pool funding attributable to that individual clinic under the methodology developed pursuant to subdivision (c). (e) To the extent permissible under federal law, supplemental payments received by qualifying nonhospital 340B community clinics pursuant to this section shall be considered separate and apart from the prospective payment system (PPS) reimbursement the clinic receives pursuant to Section 1396a(bb) of Title 42 of the United States Code and shall not be considered during annual reconciliation of the PPS rate. (f) (1) The department may modify any methodology or other requirement specified in this section to the extent it deems necessary to meet the requirements of federal law or regulations, to obtain or maintain federal approval, or to ensure federal financial participation is available or not otherwise jeopardized. (2) If the department determines that a modification is necessary pursuant to paragraph (1), the department shall consult with participants of the stakeholder process established pursuant to subdivision (c) to the extent practicable. (3) If a modification is made, the department shall notify qualifying nonhospital 340B community clinics, the Joint Legislative Budget Committee, and the relevant policy and fiscal committees of the Legislature within 10 business days of that modification. (g) The department shall implement this section only to the extent that any necessary federal approvals have been obtained, and federal financial participation is available and is not otherwise jeopardized. (h) Notwithstanding Chapter 3.5 (commencing with section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of provider bulletins or other similar instructions, without taking any further regulatory action. (i) For purposes of this section: (1) “340B” means the discount drug purchasing program described in Section 256b of Title 42 of the United States Code. (2) “Qualifying nonhospital 340B community clinic” means a center or clinic that is licensed under subdivision (a) of Section 1204 of the Health and Safety Code, or a clinic operated by a city, county, city and county, or hospital authority that is exempt from licensure under subdivision (b) of Section 1206 of the Health and Safety Code, and that is a 340B covered entity pursuant to Section 256b of Title 42 of the United States Code for the duration of each applicable fiscal year for which the department implements this section. (j) Upon implementation of Section 14105.468 and the completion of all closeout activities associated with this section, the director shall execute a declaration, which shall be retained by the director, stating that implementation of Section 14105.468 has commenced and that all closeout activities associated with this section have been completed. This section shall become inoperative one year after the date that the director executes the declaration and shall be repealed on January 1 of the year following the date upon which this section becomes inoperative. (Amended by Stats. 2024, Ch. 40, Sec. 60. (SB 159) Effective June 29, 2024. Conditionally inoperative as prescribed by its own provisions. Conditionally repealed as prescribed by its own provisions.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.468. (a) (1) Beginning for dates of service on or after January 1, 2025, the department shall establish and implement a directed payment program under which a qualifying nonhospital 340B community clinic may earn payments from contracted Medi-Cal managed care plans, subject to an appropriation by the Legislature. (2) (A) Beginning for dates of service on or after January 1, 2026, the department shall increase the amount of directed payments pursuant to paragraph (1) with amounts allocated from the Medi-Cal Provider Payment Reserve Fund in accordance with Section 14105.200. (B) If the voters approve the addition of Chapter 7.5 (commencing with Section 14199.100) to this part at the November 5, 2024, statewide general election, this paragraph shall be inoperative as of January 1, 2025. (b) The department, in consultation with affected stakeholders, and affected Medi-Cal managed care plans, as applicable, shall establish the methodology or methodologies, parameters, and eligibility criteria for the directed payments pursuant to this section. This shall include, but is not limited to, the milestones and metrics that a qualifying nonhospital 340B community clinic shall meet in order to receive a directed payment from a Medi-Cal managed care plan pursuant to this section. The department may implement the directed payment described in this subdivision using one or more of the models authorized by subsection (c) of Section 438.6 of Title 42 of the Code of Federal Regulations. (c) To the extent permissible under federal law, directed payments received by qualifying nonhospital 340B community clinics pursuant to this section shall be considered separate and apart from the prospective payment system (PPS) reimbursement the clinic receives pursuant to subsection (bb) of Section 1396a of Title 42 of the United States Code and shall not be considered during annual reconciliation of the PPS rate. (d) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section in whole or in part, by means of all-county letters, plan letters, provider bulletins, information notices, or other similar instructions, without taking any further regulatory action. (e) The department shall seek any federal approvals it deems necessary to implement this section. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized. (f) For any calendar year in which this section is implemented, in whole or in part, and notwithstanding any other law, neither the department nor a Medi-Cal managed care plan shall be required to make the payments specified in Section 14105.467. (g) For purposes of this section: (1) “340B” means the discount drug purchasing program described in Section 256b of Title 42 of the United States Code. (2) “Qualifying nonhospital 340B community clinic” means a center or clinic that is licensed under subdivision (a) of Section 1204 of the Health and Safety Code, or a clinic operated by a city, county, city and county, or hospital authority that is exempt from licensure under subdivision (b) of Section 1206 of the Health and Safety Code, and that is a 340B covered entity pursuant to Section 256b of Title 42 of the United States Code for the duration of each applicable fiscal year for which the department implements this section. (Added by Stats. 2024, Ch. 40, Sec. 61. (SB 159) Effective June 29, 2024.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.47. (a) (1) The department shall establish a list of medical supplies. The list shall specify utilization controls to be applied to each medical supply product. (2) The utilization controls specified shall include, but not be limited to, those provided by regulation of the department. (3) The department shall notify providers at least 30 days prior to the effective date of a change in utilization controls. (b) (1) The department shall establish a list of maximum allowable product costs (MAPCS) for medical supplies, which shall be published in provider bulletins. (2) The department shall update existing MAPCS and establish additional MAPCS in accordance with all of the following: (A) In establishing the MAPCS, the director shall assure that eligible persons shall receive medical supply products that are available to the public generally, without discrimination or segregation based purely on economic disability. (B) All related medical supply products within each particular medical supply type available for retail distribution shall be reviewed by the department in consultation with representatives from the California Association of Medical Product Suppliers and the California Pharmacists Association. (C) The department shall base MAPCS on the mean of the wholesale selling price of related medical supply products that are available in California. For purposes of this section, “wholesale selling price” means the price, including discounts and rebates, paid by a provider to a wholesaler, distributor, or manufacturer for a medical supply product. (D) In establishing the MAPCS, the department shall consider the provider related costs of the product that include, but are not limited to, shipping, handling, storage, and delivery. (E) The department shall notify Medi-Cal providers at least 30 days prior to the effective date of MAPCS. (c) (1) In establishing the list of medical supplies, the department may enter into exclusive or nonexclusive contracts on a bid or negotiated basis with manufacturers, distributors, dispensers, or suppliers of medical supplies pursuant to Section 14105.3. (2) To ensure that the health needs of Medi-Cal beneficiaries are met, the department shall, when evaluating a decision to execute a contract, and when evaluating medical supplies for retention on, addition to, or deletion from, the list of medical supplies, consider all of the following criteria: (A) The safety of the product. (B) The effectiveness of the product. (C) The essential need for the product. (D) The potential for misuse of the product. (E) The immediate or long-term cost effectiveness of the product. (3) The deficiency of a product when measured by one of the criteria specified in paragraph (2) may be sufficient to support a decision that the product should be deleted from, should not be added to, or should not be retained on, the list of medical supplies. However, the superiority of a product under one criterion may be sufficient to warrant the addition or retention of the product, notwithstanding a deficiency in another criterion. (4) In the evaluation of the effectiveness of a product, the department may require the manufacturer, distributor, dispenser, or supplier to submit its products to testing by an independent laboratory. For the purposes of this section, “independent laboratory” means an analytical laboratory that is not a subsidiary of, affiliated with, or on retainer for, the manufacturer, distributor, dispenser, or supplier. The department shall only utilize this paragraph involving products where there is a demonstrated experience of a significant variation in performance among the products subject to this particular contracting process. (d) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, actions under this section shall not be subject to the Administrative Procedure Act or to the review and approval of the Office of Administrative Law. (Amended by Stats. 2025, Ch. 105, Sec. 58. (AB 144) Effective September 17, 2025.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.475. (a) In maintaining the lists of medical supplies, incontinence medical supplies, and enteral nutrition products, the department may perform a review of, and contract for, various products in a specific product category. (b) The department shall notify each manufacturer of products in the categories selected pursuant to Sections 14105.47, 14105.8, and Sections 14125 to 14125.9, inclusive. (c) If, within 30 days of notification, a manufacturer does not enter into negotiations for a contract pursuant to those sections, the department may delete the products from their respective lists, or refuse to consider for addition, products of that manufacturer in the selected product categories. (d) If, after 270 days from the initial notification, a contract is not executed for a product currently on the list of medical supplies, incontinence medical supplies, or enteral nutrition products, the department may delete the product from its respective list. (e) If, within 270 days from the initial notification, a contract is executed for a product currently on the list of medical supplies, incontinence medical supplies, or enteral nutrition products, the department shall retain the product on its respective list. (f) If, within 270 days from the date of the initial notification, a contract is executed for a product not currently on the list of medical supplies, incontinence medical supplies, or enteral nutrition products, the department shall add the product to its respective list. (g) The department shall terminate all negotiations 270 days after the initial notification. (h) The department may delete any product from its respective list at the expiration of the contract term or when the contract between the department and the manufacturer of that product is terminated. (i) In the absence of a contract, the department may deem any product on the list of medical supplies, incontinence medical supplies, or enteral nutrition products, a nonbenefit of the program and delete that product from its respective list. (j) Deletions made to the lists of medical supplies, incontinence supplies, and enteral nutrition products, shall become effective no sooner than 30 days after publication of the changes in provider bulletins. (k) (1) A manufacturer of a medical supply, incontinence supply, or enteral nutrition product denied a contract pursuant to this section, or pursuant to Sections 14105.47, 14105.8, and Sections 14125 to 14125.9, inclusive, may file an appeal of that decision with the director within 30 calendar days of the department’s written decision. (2) The director shall issue a final decision on the appeal within 60 calendar days of the postmark date of the appeal. (l) The department shall provide individual notice to Medi-Cal beneficiaries at least 60 calendar days prior to the effective date of the deletion or suspension of any product pursuant to this subdivision. The notice shall include a description of the beneficiary’s right to a fair hearing and shall encourage the beneficiary to consult a physician to determine if an appropriate substitute product is available from Medi-Cal. (Amended by Stats. 2025, Ch. 105, Sec. 59. (AB 144) Effective September 17, 2025.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.48. (a) The department shall establish a list of covered services and maximum allowable reimbursement rates for durable medical equipment, as defined in Section 51160 of Title 22 of the California Code of Regulations, and the list shall be published in provider manuals. The list shall specify utilization controls to be applied to each type of durable medical equipment. (b) Reimbursement for durable medical equipment, except wheelchairs, wheelchair accessories, and speech-generating devices and related accessories, shall be the lesser of (1) the amount billed pursuant to Section 51008.1 of Title 22 of the California Code of Regulations, (2) an amount that does not exceed 80 percent of the lowest maximum allowance for California established by the federal Medicare Program for the same or similar item or service, or (3) the guaranteed acquisition cost negotiated by means of the contracting process provided for pursuant to Section 14105.3 plus a percentage markup to be established by the department. (c) Reimbursement for wheelchairs, wheelchair accessories, and speech-generating devices and related accessories shall be the lesser of (1) the amount billed pursuant to Section 51008.1 of Title 22 of the California Code of Regulations, (2) an amount that does not exceed 100 percent of the lowest maximum allowance for California established by the federal Medicare Program for the same or similar item or service, or (3) the guaranteed acquisition cost negotiated by means of the contracting process provided for pursuant to Section 14105.3 plus a percentage markup to be established by the department. (d) Reimbursement for all durable medical equipment billed to the Medi-Cal program utilizing codes with no specified maximum allowable rate shall be the lesser of (1) the amount billed pursuant to Section 51008.1 of Title 22 of the California Code of Regulations, (2) the guaranteed acquisition cost negotiated by means of the contracting process provided for pursuant to Section 14105.3 plus a percentage markup to be established by the department, (3) the actual acquisition cost plus a markup to be established by the department, (4) the manufacturer’s suggested retail purchase price on or prior to the date of service, and documented by a printed catalog or a hard copy of an electronic catalog page showing that price, reduced by a percentage discount not to exceed 20 percent, or not to exceed 15 percent for wheelchairs and wheelchair accessories if the provider employs or contracts with a qualified rehabilitation technology professional, as defined in Section 14132.85, or (5) a price established through targeted product-specific cost containment provisions developed with providers. (e) Reimbursement for all durable medical equipment supplies and accessories billed to the Medi-Cal program shall be the lesser of (1) the amount billed pursuant to Section 51008.1 of Title 22 of the California Code of Regulations, or (2) the acquisition cost plus a 23 percent markup. (f) (1) Commencing January 1, 2007, reimbursement for oxygen delivery systems and oxygen contents shall utilize national HCPCS codes, and shall be the lesser of (1) the amount billed pursuant to Section 51008.1 of Title 22 of the California Code of Regulations, (2) an amount that does not exceed 80 percent of the lowest maximum allowance for California established by the federal Medicare Program for the same or a similar item or service, or (3) the guaranteed acquisition cost negotiated by means of the contracting process provided for pursuant to Section 14105.3, plus a percentage markup to be established by the department. (2) Effective July 1, 2022, reimbursement for durable medical equipment that is considered to be oxygen and respiratory equipment, as determined by the department, shall not exceed 100 percent of the lowest maximum allowance for California established by the federal Medicare Program for the same or similar item or service. (g) Within six months of the effective date of the act that added this subdivision, the department shall review utilization of services and equipment resulting from the changes to this section made by that act, and shall assess whether the changes are contributing to inappropriate use of those services or equipment. If the department’s review finds an increase in inappropriate use of those services or equipment, the Department of Finance shall notify the Joint Legislative Budget Committee of the State Department of Health Services’ findings and recommended changes to ensure program integrity. (h) Any regulation in Division 3 of Title 22 of the California Code of Regulations that contains provisions for reimbursement rates for durable medical equipment shall be amended or repealed effective for dates of service on or after the date of the act adding this section. (i) Notwithstanding the rulemaking provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this section, in whole or in part, by means of provider bulletins or other similar instructions, without taking any further regulatory action. (j) The department shall consult with interested parties and appropriate stakeholders in implementing this section with respect to all of the following: (1) Notifying the provider representatives of the proposed change. (2) Scheduling at least one meeting to discuss the change. (3) Allowing for written input regarding the change. (4) Providing advance notice on the implementation and effective date of the change. (k) The department may require providers of durable medical equipment to appeal Medicare denials for dually eligible beneficiaries as a condition of Medi-Cal payment. (Amended by Stats. 2022, Ch. 47, Sec. 94. (SB 184) Effective June 30, 2022.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.49. (a) (1) The department shall establish a list of Healthcare Common Procedure Coding System (HCPCS) codes billable to the Medi-Cal program and reimbursement rates, subject to Section 51319 of Title 22 of the California Code of Regulations, hearing aids, and the list shall be published in the Medi-Cal Provider Manual. (2) The department may implement this section by provider manual or bulletin. Notwithstanding the provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of the Government Code), actions of the department under this section shall not be subject to the rulemaking provisions of the Administrative Procedure Act or to the review and approval of the Office of Administrative Law. (b) The maximum reimbursement rate for hearing aids shall not exceed the lesser of the following: (1) The maximum allowable amount established by the department. (2) The one-unit wholesale cost, plus a markup determined by the department. (3) The billed amount. (4) The rate established by the department’s contracting program. (c) The maximum reimbursement rate for hearing aid supplies and accessories shall not exceed the lesser of the following: (1) The retail price. (2) The wholesale cost, plus a markup determined by the department. (3) The billed amount. (4) The rate established by the department’s contracting program. (d) The maximum reimbursement rate for molds or inserts shall not exceed the lesser of the following: (1) The maximum amount allowable established by the department. (2) The billed amount. (3) The rate established by the department’s contracting program. (e) The maximum reimbursement for repairs, subsequent to the guarantee period, shall not exceed the lesser of the following: (1) The invoice cost plus a markup determined by the department. (2) The billed amount. (3) The rate established by the department’s contracting program. (Amended by Stats. 2006, Ch. 74, Sec. 67. Effective July 12, 2006.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.5. The director or prepaid health plans shall make no payment for services rendered prior to January 1, 1977, to any health facility that secures a license under the provisions of Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code after July 1, 1970, covering a new facility or additional bed capacity or the conversion of existing bed capacity to a different license category, unless the licensee received a favorable final decision by the voluntary area health planning agency in the area, the consumer members of a voluntary area health planning agency acting as an appeals body or the Advisory Health Council pursuant to Sections 127155 to 127235, inclusive, of the Health and Safety Code; or unless the licensee had filed an application for a license prior to January 1, 1970, and the application met all then-existing requirements and regulations of the appropriate state agency at the time of application including, at least, preliminary submission of plans, and if the licensee commences construction of his or her project prior to July 1, 1971, and if the licensee has on file with the department a notarized affidavit from the building department having jurisdiction indicating that substantial progress on the approved project was attained by January 1, 1973, and the licensee has on file with the county recorder and department a valid notice of construction completion indicating January 1, 1974, as the completion date; except that the department shall extend the foregoing dates by no more than a total of two years in the case of projects where delay has resulted from the death of the original applicant, and shall extend the foregoing dates by no more than a total of one year in the case of projects where other good cause has been shown why the extension should be granted. The exception provided for in the preceding sentence with respect to applications filed prior to January 1, 1970, except for transfers executed before November 30, 1970, or after July 1, 1971, shall not apply to transferees of the applications of the original applicants. Voluntary area health planning agencies may extend, until July 1, 1972, the date upon which applicants, qualifying under the exception in this section, shall commence construction, if the voluntary area health planning agencies declare that good cause has been shown why the extension should be granted, provided that an applicant applying for the extension had, prior to January 1, 1970, received approval of a health planning association in the county wherein the applicant is located. Applicants receiving extension of the construction commencement date shall have on file with the department a notarized affidavit from the building department having jurisdiction indicating that substantial progress on the approved project was attained by January 1, 1974, and have on file with the county recorder and department a valid notice of construction completion indicating January 1, 1975, as the completion date; except that the department shall extend each of the foregoing dates by no more than a total of one year in the case of projects where good cause has been shown why the extension should be granted. (a) For the purposes of this section, “substantial progress” is defined and evidenced as follows: (1) For structures of three or fewer stories, completion of the foundations and footings; the structural frame; the mechanical, electrical, and plumbing rough-in; the rough flooring; the exterior walls and windows; and the finished roof. (2) For structures of more than three stories, a contractor’s schedule of work shall be filed with the department by January 1, 1973. Every three months thereafter, until completion, evidence shall be submitted to the department that construction is progressing on that schedule. (b) For the purposes of this section, construction of a project is deemed commenced on the date the applicant was so notified by the department, if so notified, or on the date the applicant has completed not less than all of the following: (1) Submission to the appropriate state agency of a written agreement executed between the applicant and a licensed general contractor to construct and complete the facility within a designated time schedule in accordance with final architectural plans and specifications approved by the agency. (2) Obtaining the initial permits or approval for commencing work on the project that is customarily issued for projects of the scope of applicant by the governmental agency having jurisdiction over the construction. (3) Completion of construction work on the project to such a degree as to justify and require a progress payment by the applicant to the general contractor under terms of the construction agreement. (Amended by Stats. 1996, Ch. 1023, Sec. 473.5. Effective September 29, 1996.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.51. (a) The department shall establish “capped rental” reimbursement for specific items of durable medical equipment. Items in this category shall be reimbursed on a monthly rental basis not to exceed a period of continuous use of 10 months. After 10 months of rental have been paid, the provider shall continue to provide the item without charge, except for maintenance and servicing fees, until the medical necessity ends or Medi-Cal coverage ceases. Monthly reimbursement for the rental of these specific items of durable medical equipment may not exceed 80 percent of the lowest maximum allowance for California established by the federal Medicare program for the same or similar item or service. (b) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of the Government Code, actions under subdivision (a) shall not be subject to the rulemaking provisions of the Administrative Procedure Act or to the review and approval of the Office of Administrative Law. (c) The department shall consult with interested parties and appropriate stakeholders in determining which items will be subject to capped rental, including doing all of the following: (1) Notifying provider representatives of the items that will be subject to capped rental. (2) Scheduling at least one meeting to discuss the items. (3) Allowing for written input regarding the items. (4) Providing advance notice of the effective date on and after which the items will be subject to capped rental. (Added by Stats. 2003, Ch. 230, Sec. 67.5. Effective August 11, 2003.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.6. No health facility licensed under the provisions of Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code shall be entitled to receive, or shall receive, any payment whatsoever from the director, or from any prepaid health plan, for any services rendered to any Medi-Cal program beneficiary if the health facility has commenced construction of a project after January 1, 1977, and the health facility has failed to obtain a certificate of need covering such project issued pursuant to Part 1.5 (commencing with Section 437) of Division 1 of the Health and Safety Code. Upon commencement of such a project, or as soon thereafter as possible, the director or the prepaid health plan shall notify the facility in writing of termination of all payments for any services rendered in any portion of the facility after 30 days from the date the notice is mailed. For the purposes of this section, a “project” shall mean any project for which a certificate of need is required pursuant to Part 1.5 (commencing with Section 437) of Division 1 of the Health and Safety Code. (Added by Stats. 1976, Ch. 854.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.7. (a) In order to fairly reimburse pharmacies for the furnishing of prescription drugs to Medi-Cal beneficiaries, the director shall update allowable drug product prices within seven days of receiving notice of a drug product price change. Notice to the director shall include, but not be limited to, publication of the price change in the supplier’s catalog or supplement or in nationally distributed drug price reference guides. (b) No regulation reducing allowable drug product cost reimbursement or removing a drug from the Medi-Cal list of contract drugs shall be operative until at least 30 days after eligible pharmacies have been mailed a notice of the reimbursement limitation by the department or the fiscal intermediary. (c) The director shall limit the rate of payment for the professional fee portion of prescription services rendered under this chapter pursuant to Section 4064 of the Business and Professions Code or Section 11201 of the Health and Safety Code and the professional fee portion of prescription services rendered as a refill immediately subsequent to such prescription to ensure that the total professional fee paid for the two services does not exceed the professional fee paid for the same prescription refill when provided as a routine service. (Amended by Stats. 2005, Ch. 80, Sec. 25.5. Effective July 19, 2005.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.75. (a) In order to ensure that drug products in an injectable form that are not administered by the patient are available to Medi-Cal beneficiaries pursuant to federal law, the department shall do all of the following with respect to any such drug product: (1) (A) Develop and publish a medical benefit drug utilization policy within 180 days of being notified by the manufacturer of approval of the product by the federal Food and Drug Administration. The policy shall be published in the Medi-Cal provider bulletin that immediately follows that 180-day period. The effective date of the drug utilization policy shall be no later than the publication date of the bulletin. (B) If the department is unable to complete and publish the policy within the period specified in subparagraph (A), the department shall, until completion of the utilization policy, allow providers to use the utilization standards approved by the federal Food and Drug Administration that are contained in the official package circular or insert for the product when the department reviews a provider’s submission for utilization of the product. The department shall allow the product to be billed and reimbursed using a miscellaneous billing code until the permanent code is assigned and published pursuant to paragraph (3). (2) Evaluate the necessity of utilization controls, and publish all utilization controls in both the final drug utilization policy and the Medi-Cal provider bulletin. (3) Ensure that the fiscal intermediary enters into the Medi-Cal database the code assigned to the product within 60 days of the date the code was assigned to the product. (b) Nothing in this section shall be construed to affect the department’s authority to require a provider to obtain prior authorization for dispensing or administering an injectable drug. (Added by Stats. 2006, Ch. 792, Sec. 1. Effective January 1, 2007.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.8. (a) The department may enter into contracts with manufacturers of enteral nutrition products that can be used as a therapeutic regimen to prevent serious disability or death in patients with medically diagnosed conditions that preclude the full use of regular food, on a bid or nonbid basis. The department shall maintain a list of those products for which contracts have been executed. For those contracts that generate rebates, those rebates shall be managed through the department’s drug rebate accounting system. (b) (1) To ensure that the health needs of Medi-Cal beneficiaries are met, the department shall, when evaluating a decision to execute a contract, and when evaluating enteral nutrition products for retention on, addition to, or deletion from, the list of enteral nutrition products, consider all of the following criteria: (A) The safety of the product. (B) The effectiveness of the product. (C) The essential need for the product. (D) The potential for misuse of the product. (E) The immediate or long-term cost effectiveness of the product. (2) The deficiency of a product when measured by one of the criteria specified in paragraph (1) may be sufficient to support a decision that the product should be deleted from, should not be added to, or should not be retained on, the list of medical supplies. However, the superiority of a product under one criterion may be sufficient to warrant the addition or retention of the product, notwithstanding a deficiency in another criterion. (c) In order that Medi-Cal beneficiaries may have access to a comprehensive range of enteral nutrition products pursuant to subdivision (a), the department shall ensure that there is representation on the list of both general use and specialized use enteral nutrition products. The department deems all products designed to meet the normal needs of infants, and all products that are an incomplete source of nutrition, including modular products, and all products intended for use in weight loss, are not benefits of the Medi-Cal program. The department may deem an incomplete product a benefit for patients with diagnoses, including, but not limited to, malabsorption and inborn errors of metabolism, when the product either appropriately lacks only an offending nutrient, or has been shown to not be investigational nor experimental when used as part of a therapeutic regimen to prevent serious disability or death, or when both conditions apply. (d) In order to achieve maximum cost savings, the Legislature declares that an expedited process for contracts under this section is necessary. Therefore, contracts entered into on a nonbid basis shall be exempt from Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code. (e) Deletions made to the list of enteral nutrition products shall become effective no sooner than 30 days after publication of the changes in provider bulletins. (f) Changes made to the list of enteral nutrition products under this or any other section are exempt from the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and shall not be subject to the review and approval of the Office of Administrative Law. (g) The department may provide beneficiaries continuing care for products deleted from the list of enteral nutrition products. The department shall assess the need for continuing care based on the criteria in subdivision (b) and the potential impact on beneficiary access to appropriate therapy. To be eligible for continuing care status under this subdivision, a beneficiary must be taking the enteral nutrition product when the product is deleted. Additionally, the department shall have received a claim for the enteral nutrition product with a date of service that is within 100 days prior to the date the product was deleted. A beneficiary shall remain eligible for continuing care status provided that a claim is submitted for the enteral nutrition product in question at least every 100 days and the date of service of the claim is within 100 days of the date of service of the last claim submitted for the same enteral nutrition product. (h) The department shall provide individual notice to Medi-Cal beneficiaries at least 60 calendar days prior to the effective date of the deletion of any enteral nutrition product from the list of enteral nutrition products. The notice shall include a description of the beneficiary’s right to a fair hearing and shall encourage the beneficiary to consult a physician to determine if an appropriate substitute enteral nutrition product is available from Medi-Cal. (i) Enteral nutrition products authorized pursuant to subdivision (a) shall be available only through prior authorization. The department may designate those enteral nutrition products that are without a contract as not being a benefit of the Medi-Cal program, except in the case of continuing care as described in subdivision (h) of this section. (j) Contracts executed pursuant to this section shall be confidential and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). (k) (1) Manufacturers shall calculate and pay interest on late or unpaid rebates. (2) Interest pursuant to paragraph (1) shall begin accruing 38 calendar days from the date of mailing of the quarterly invoice, including supporting utilization data sent to the manufacturer. Interest shall continue to accrue until the date of mailing of the manufacturer’s payment. (3) Interest rates and calculations pursuant to paragraph (1) shall be identical and shall be equal to the drug rebate interest rates as determined by the federal Centers for Medicare and Medicaid Services’ Medicaid Drug Rebate Program Releases or regulations. (4) If the date of mailing of a state rebate payment is 69 days or more from the date of mailing of the invoice, including supporting utilization data sent to the manufacturer, the interest rate shall be as specified in paragraph (3), however the interest rate shall be increased by 10 percentage points. (l) The department may adopt emergency regulations to implement this section in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (Amended by Stats. 2021, Ch. 615, Sec. 447. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.85. (a) Effective July 1, 2002, payment for enteral nutrition products dispensed by a pharmacy provider shall be based on the estimated acquisition cost for that product plus a percentage markup to be determined by the department in consultation with provider representatives from the California Association of Medical Product Suppliers and the California Pharmacists Association. Any changes to the percentage markup may be implemented with 30-day notice to the provider community via a provider bulletin or other specific notification to providers. (b) In determining the estimated acquisition cost of products pursuant to this section, the department shall consider provider related costs of the products that include, but are not limited to, shipping, handling, storage, and delivery. (Amended by Stats. 2007, Ch. 188, Sec. 68. Effective August 24, 2007.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.86. (a) For the purposes of this section, the following definitions apply: (1) (A) “Average sales price” means the price reported to the federal Centers for Medicare and Medicaid Services by the manufacturer pursuant to Section 1847A of the federal Social Security Act (42 U.S.C. Sec. 1395w-3a). (B) “Average manufacturer price” means the price reported to the federal Centers for Medicare and Medicaid Services pursuant to Section 1927 of the federal Social Security Act (42 U.S.C. Sec. 1396r-8). (2) “Blood factors” means plasma protein therapies and their recombinant analogs. Blood factors include, but are not limited to, all of the following: (A) Coagulation factors, including: (i) Factor VIII, nonrecombinant. (ii) Factor VIII, porcine. (iii) Factor VIII, recombinant. (iv) Factor IX, nonrecombinant. (v) Factor IX, complex. (vi) Factor IX, recombinant. (vii) Antithrombin III. (viii) Anti-inhibitor factor. (ix) Von Willebrand factor. (x) Factor VIIa, recombinant. (B) Immune Globulin Intravenous. (C) Alpha-1 Proteinase Inhibitor. (b) The reimbursement for blood factors shall be by national drug code number and shall not exceed 120 percent of the average sales price of the last quarter reported. (c) The average sales price for blood factors of manufacturers or distributors that do not report an average sales price pursuant to subdivision (a) shall be identical to the average manufacturer price. The average sales price for new products that do not have a calculable average sales price or average manufacturer price shall be equal to a projected sales price, as reported by the manufacturer to the department. Manufacturers reporting a projected sales price for a new product shall report the first monthly average manufacturer price reported to the federal Centers for Medicare and Medicaid Services. The reporting of an average sales price that does not meet the requirement of this subdivision shall result in that blood factor no longer being considered a covered benefit. (d) The average sales price shall be reported at the national drug code level to the department on a quarterly basis. (e) (1) Effective July 1, 2008, the department shall collect a state rebate, in addition to rebates pursuant to other provisions of state or federal law, for blood factors reimbursed pursuant to this section by programs that qualify for federal drug rebates pursuant to Section 1927 of the federal Social Security Act (42 U.S.C. Sec. 1396r-8) or otherwise qualify for federal funds under Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.) pursuant to the Medicaid state plan or waivers and the programs authorized by Article 5 (commencing with Section 123800) of Chapter 3 of Part 2 of, and Article 1 (commencing with Section 125125) of Chapter 2 of Part 5 of, Division 106 of the Health and Safety Code. (2) Upon implementation of paragraphs (4) and (5) of subdivision (b) of Section 14105.33 for blood factors pursuant to this section, “utilization data” used to determine the state rebate shall be described pursuant to subdivision (b) of Section 14105.33. The department shall post on its Internet Web site a notice that it has implemented paragraphs (4) and (5) of subdivision (b) of Section 14105.33 for blood factors pursuant to this section. (3) The state rebate shall be negotiated as necessary between the department and the manufacturer. Manufacturers who do not execute an agreement to pay additional rebates pursuant to this section shall have their blood factors available only through an approved treatment or service authorization request. All blood factors that meet the definition of a covered outpatient drug pursuant to Section 1927 of the federal Social Security Act (42 U.S.C. Sec. 1396r-8) shall remain a benefit subject to the utilization controls provided for in this section. (4) In reviewing authorization requests, the department shall approve the lowest net cost product that meets the beneficiary’s medical need. The review of medical need shall take into account a beneficiary’s clinical history or the use of the blood factor pursuant to payment by another third party, or both. (f) A beneficiary may obtain blood factors that require a treatment or service authorization request pursuant to subdivision (e) if the beneficiary qualifies for continuing care status. To be eligible for continuing care status, a beneficiary must be taking the blood factor and the department has reimbursed a claim for the blood factor with a date of service that is within 100 days prior to the date the blood factor was placed on treatment authorization request status. A beneficiary may remain eligible for continuing care status, provided that a claim is submitted for the blood factor in question at least every 100 days and the date of service of the claim is within 100 days of the date of service of the last claim submitted for the same blood factor. (g) Changes made to the list of covered blood factors under this or any other section shall be exempt from the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and shall not be subject to the review and approval of the Office of Administrative Law. (Amended by Stats. 2016, Ch. 30, Sec. 27. (SB 833) Effective June 27, 2016.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.94. (a) An eligible provider, as described in subdivision (b), may, in addition to the rate of payment that the provider would otherwise receive for Medi-Cal ground emergency medical transportation services, receive supplemental Medi-Cal reimbursement to the extent provided in this section. (b) A provider shall be eligible for supplemental reimbursement if the provider has all of the following characteristics continuously during a state fiscal year: (1) Provides ground emergency medical transportation services to Medi-Cal beneficiaries. (2) Is a provider that is enrolled as a Medi-Cal provider for the period being claimed. (3) Is owned or operated by the state, a city, county, city and county, fire protection district organized pursuant to Part 2.7 (commencing with Section 13800) of Division 12 of the Health and Safety Code, special district organized pursuant to Chapter 1 (commencing with Section 58000) of Division 1 of Title 6 of the Government Code, community services district organized pursuant to Part 1 (commencing with Section 61000) of Division 3 of Title 6 of the Government Code, health care district organized pursuant to Chapter 1 (commencing with Section 32000) of Division 23 of the Health and Safety Code, or a federally recognized Indian tribe. (c) An eligible provider’s supplemental reimbursement pursuant to this section shall be calculated and paid as follows: (1) The supplemental reimbursement to an eligible provider, as described in subdivision (b), shall be equal to the amount of federal financial participation received as a result of the claims submitted pursuant to paragraph (2) of subdivision (f). (2) The amount certified pursuant to paragraph (1) of subdivision (e), when combined with the amount received from all other sources of reimbursement from the Medi-Cal program, shall not exceed 100 percent of actual costs, as determined pursuant to the Medi-Cal State Plan, for ground emergency medical transportation services. (3) The supplemental Medi-Cal reimbursement provided by this section shall be distributed exclusively to eligible providers under a payment methodology based on ground emergency medical transportation services provided to Medi-Cal beneficiaries by eligible providers on a per-transport basis or other federally permissible basis. The department shall obtain approval from the federal Centers for Medicare and Medicaid Services for the payment methodology to be utilized, and may not make any payment pursuant to this section prior to obtaining that approval. (d) (1) It is the Legislature’s intent in enacting this section to provide the supplemental reimbursement described in this section without any expenditure from the General Fund. An eligible provider, as a condition of receiving supplemental reimbursement pursuant to this section, shall enter into, and maintain, an agreement with the department for the purposes of implementing this section and reimbursing the department for the costs of administering this section. (2) The nonfederal share of the supplemental reimbursement submitted to the federal Centers for Medicare and Medicaid Services for purposes of claiming federal financial participation shall be paid only with funds from the governmental entities described in paragraph (3) of subdivision (b) and certified to the state as provided in subdivision (e). (e) Participation in the program by an eligible provider described in this section is voluntary. If an applicable governmental entity elects to seek supplemental reimbursement pursuant to this section on behalf of an eligible provider owned or operated by the entity, as described in paragraph (3) of subdivision (b), the governmental entity shall do all of the following: (1) Certify, in conformity with the requirements of Section 433.51 of Title 42 of the Code of Federal Regulations, that the claimed expenditures for the ground emergency medical transportation services are eligible for federal financial participation. (2) Provide evidence supporting the certification as specified by the department. (3) Submit data as specified by the department to determine the appropriate amounts to claim as expenditures qualifying for federal financial participation. (4) Keep, maintain, and have readily retrievable, any records specified by the department to fully disclose reimbursement amounts to which the eligible provider is entitled, and any other records required by the federal Centers for Medicare and Medicaid Services. (f) (1) The department shall promptly seek any necessary federal approvals for the implementation of this section. The department may limit the program to those costs that are allowable expenditures under Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.). If federal approval is not obtained for implementation of this section, this section shall not be implemented. (2) The department shall submit claims for federal financial participation for the expenditures for the services described in subdivision (e) that are allowable expenditures under federal law. (3) The department shall annually submit any necessary materials to the federal government to provide assurances that claims for federal financial participation will include only those expenditures that are allowable under federal law. (g) (1) If a final judicial determination is made by any court of appellate jurisdiction or a final determination is made by the administrator of the federal Centers for Medicare and Medicaid Services that the supplemental reimbursement provided for in this section must be made to any provider not described in this section, the director shall execute a declaration stating that the determination has been made and on that date this section shall become inoperative. (2) The declaration executed pursuant to this subdivision shall be retained by the director, provided to the fiscal and appropriate policy committees of the Legislature, the Secretary of State, the Secretary of the Senate, the Chief Clerk of the Assembly, and the Legislative Counsel, and posted on the department’s internet website. (h) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement and administer this section by means of provider bulletins, or similar instructions, without taking regulatory action. (i) Notwithstanding any other law, this section shall become inoperative during the entirety of any Medi-Cal managed care rating period in which Section 14105.945 is implemented, in whole or in part. The department may conduct any necessary and remaining administrative duties related to any time period during which this provision remained operative, even after this section becomes inoperative, and may receive all compensation for those activities until paid in full. (j) The department, in its sole discretion, may determine it has received all compensation for activities conducted pursuant to this section and completed all administrative duties related to time periods when this section was operative. (Amended by Stats. 2019, Ch. 544, Sec. 1. (AB 1705) Effective January 1, 2020. Section inoperative as prescribed by its own conditions.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.945. (a) For purposes of this section, the following definitions apply: (1) “Eligible provider” means a provider who is eligible for reimbursement of Medi-Cal emergency medical transports pursuant to this section, and who continually meets all of the following requirements during the entirety of any Medi-Cal managed care rating period that this section is implemented: (A) Provides emergency medical transports to Medi-Cal beneficiaries. (B) Is enrolled as a Medi-Cal provider for the period being claimed. (C) Is owned or operated by the state, a city, county, city and county, fire protection district organized pursuant to Part 2.7 (commencing with Section 13800) of Division 12 of the Health and Safety Code, special district organized pursuant to Chapter 1 (commencing with Section 58000) of Division 1 of Title 6 of the Government Code, community services district organized pursuant to Part 1 (commencing with Section 61000) of Division 3 of Title 6 of the Government Code, health care district organized pursuant to Chapter 1 (commencing with Section 32000) of Division 23 of the Health and Safety Code, or a federally recognized Indian tribe. (2) (A) “Emergency medical transport” means the act of transporting an individual from any point of origin to the nearest medical facility capable of meeting the emergency medical needs of the patient by an ambulance licensed, operated, and equipped in accordance with applicable state or local statutes, ordinances, or regulations that are billed with billing codes A0429 BLS Emergency, A0434 Specialty Care Transport, A0225 Neonatal Emergency Transport, A0427 ALS Emergency, and A0433 ALS2, and any equivalent, predecessor, or successor billing codes, as may be determined by the director. (B) “Emergency medical transport” shall not include transportation of beneficiaries by passenger car, taxicab, litter van, wheelchair van, or other forms of public or private conveyances, nor shall it include transportation by an air ambulance provider. An “emergency medical transport” does not occur if a transport is not provided following evaluation of a patient. (3) “Medi-Cal managed care rating period” means a period selected by the department for which the actuarially sound capitation rates are developed and documented in the rate certification that the department submits to the federal Centers for Medicare and Medicaid Services as required by Section 438.7(a) of Title 42 of the Code of Federal Regulations. (b) (1) Commencing no sooner than July 1, 2021, the department shall implement the Public Provider Intergovernmental Transfer Program (program) pursuant to this section for any Medi-Cal managed care rating period that the department has obtained necessary federal approvals. (2) Notwithstanding any other law, during the entirety of any Medi-Cal managed care rating period for which the requirements of this section are implemented, in whole or in part, supplemental Medi-Cal reimbursements described in Section 14105.94 shall become inoperative. (c) To the extent authorized under federal and state law, an eligible provider shall receive increased reimbursement by application of an add-on increase, as determined pursuant to subdivision (d), to the associated Medi-Cal fee-for-service payment schedule for emergency medical transports provided to applicable Medi-Cal beneficiaries. (d) The department shall develop the statewide add-on increase to be provided under the program as follows: (1) The department shall determine an initial statewide add-on increase that is based on the most recent audited cost reports of eligible providers available at the time the add-on increase is developed, as determined by the department. In determining the initial statewide add-on increase, the department may make adjustments to account for inflation, trend, or other material changes, as appropriate under federal law and actuarial standards. (2) The initial statewide add-on increase shall represent the difference between both of the following: (A) The average reimbursement paid pursuant to the applicable base Medi-Cal fee-for-service payment fee schedule for an emergency medical transport during the time period of the applicable cost-report to an eligible provider, and weighted according to those services provided by all eligible providers during the applicable time period. (B) The average cost directly associated with providing a Medi-Cal emergency medical transport under the Medi-Cal program by an eligible provider during the time period of the applicable cost-report, as determined based on all eligible providers’ audited cost reports pursuant to paragraph (1), and weighted according to those services provided by all eligible providers during the applicable time period. (3) For subsequent Medi-Cal managed care rating periods, the department, in consultation with participating eligible providers, and as determined by the department, may adjust periodically the initial statewide add-on increase to account for inflation, trend adjustments, or other material changes, as appropriate under federal law and actuarial standards. (4) To the extent that the department deems practicable, the department shall set a schedule for determining the statewide add-on increase before the department submits to the federal Centers for Medicare and Medicaid Services actuarially sound Medi-Cal managed care rates for an applicable Medi-Cal managed care rating period pursuant to subdivision (e). (5) Once the department determines the add-on increase for a Medi-Cal managed care rating period, the add-on increase shall not be modified for that rating period unless the modification is required for purposes of receiving federal approval or claiming federal financial participation for the requirements of this section. (e) (1) A Medi-Cal managed care health plan shall satisfy its obligation under Section 438.114(c) of Title 42 of the Code of Federal Regulations for emergency medical transport, and shall provide payment to applicable noncontract emergency medical transport providers consistent with Section 1396u-2(b)(2)(D) of Title 42 of the United States Code. (2) During the entirety of any Medi-Cal managed care rating period that this section is implemented, the amounts a noncontract eligible provider may collect if a Medi-Cal beneficiary received medical assistance other than through enrollment in a Medi-Cal managed care health plan pursuant to Section 1396u-2(b)(2)(D) of Title 42 of the United States Code shall be the resulting Medi-Cal fee-for-service payment schedule amounts after the application of the add-on increase described in this section. During the Medi-Cal managed care rating period that the requirements of this section are implemented, any reimbursement to a noncontract emergency medical transport provider that is not an eligible provider shall be made in accordance with subdivision (b) of Section 14129.3. (f) The Medi-Cal reimbursement provided by this section shall be distributed exclusively to eligible providers under a payment methodology based on emergency medical transport provided to Medi-Cal beneficiaries by eligible providers on a per-transport basis or other federally permissible basis. (g) During the entirety of any Medi-Cal managed care rating period that this section is implemented, in whole or in part, the department shall provide appropriate funding to each applicable Medi-Cal managed care plan to account for the add-on increase obligations of these plans pursuant to this section in federally approved risk based capitation rates developed in accordance with Section 14301.1. (h) (1) For any Medi-Cal managed care rating period that this section is implemented, the nonfederal share, which is associated with the add-on increase as it applies to the Medi-Cal fee-for-service payment schedule and the portion of the risk-based capitation rate to Medi-Cal managed care health plans, may consist of voluntary intergovernmental transfers of funds provided by eligible providers and their affiliated governmental entities or other public entities pursuant to Section 14164, as applicable. Upon providing any intergovernmental transfer of funds, each transferring entity shall certify, in the form and manner specified by the department, that the transferred funds qualify for federal financial participation pursuant to applicable laws relating to the federal Medicaid program. Any intergovernmental transfer of funds made pursuant to this section shall be voluntary for purposes of federal law. (2) The department shall assess a 10-percent fee on each transfer of public funds to the state pursuant to this subdivision to pay for health care coverage and to reimburse the department for its costs associated with administering the program. Excluding this fee, the department shall not assess a percentage fee in connection with any intergovernmental transfer of funds made pursuant to this subdivision. (3) The department shall develop and maintain, in consultation with participating eligible providers, a protocol and schedule for funding the nonfederal share of expenditures during a Medi-Cal managed care rating period that this section is implemented using voluntary intergovernmental transfers. (4) This section does not limit or otherwise alter any existing authority of the department to accept intergovernmental transfers for purposes of funding the nonfederal share of expenditures in the Medi-Cal program. (i) During the entirety of any Medi-Cal managed care rating period for which this section is implemented, in whole or in part, an eligible provider shall be exempt from the quality assurance fee and add-on increase pursuant to Article 3.91 (commencing with Section 14129). (j) This section shall cease to be operative on the first day of the Medi-Cal managed care rating period beginning on or after the date the department determines, after consultation with participating eligible providers, that implementation of this section is no longer financially and programmatically supportive of the Medi-Cal program. The department shall make this determination if the projected amount of nonfederal share funds available for an applicable Medi-Cal managed care rating period is insufficient to support implementation of this section in the subject Medi-Cal managed care rating period. The department shall post notice of the determination on its internet website. (k) The director may modify any process or methodology specified in this section to the extent necessary to comply with state or federal law or regulations, or to secure or maintain federal approval or federal financial participation. If the director determines, after consulting with participating eligible providers, that a modification to the process or methodology is necessary, the director shall execute a declaration stating that this determination has been made and describing the modification. The director shall retain the declaration and provide a copy, within five working days of the execution of the declaration, to the fiscal and appropriate policy committees of the Legislature. The director shall post the declaration on the department’s internet website. (l) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of all-county letters, provider bulletins, plan letters, or other similar instructions without taking regulatory action. (m) (1) The department shall implement this section only to the extent that federal financial participation is available and any necessary federal approvals are obtained. (2) The department shall promptly seek any necessary federal approvals for the implementation of this section for an applicable Medi-Cal managed care rating period. (Added by Stats. 2019, Ch. 544, Sec. 2. (AB 1705) Effective January 1, 2020. Section inoperative as prescribed by its own conditions.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.95. (a) Each eligible facility, as described in subdivision (b), may, in addition to the rate of payment that the facility would otherwise receive for adult day health services, receive supplemental Medi-Cal reimbursement to the extent provided in this section. (b) A facility shall be eligible for supplemental reimbursement only if the facility has all of the following characteristics continuously during a state fiscal year commencing with the 2002 fiscal year, and thereafter: (1) Provides services to Medi-Cal beneficiaries. (2) Is an adult day health center, licensed pursuant to Chapter 3.3 (commencing with Section 1570) of Division 2 of the Health and Safety Code. (3) Is owned or operated by a county, city, city and county, or health care district organized pursuant to Chapter 1 (commencing with Section 32000) of Division 23 of the Health and Safety Code. (c) An eligible facility’s supplemental reimbursement pursuant to this section shall be calculated and paid as follows: (1) The supplemental reimbursement to an eligible facility, as described in subdivision (b), shall be equal to the amount of federal financial participation received as a result of the claims submitted pursuant to paragraph (2) of subdivision (g). (2) In no instance shall the amount certified pursuant to paragraph (1) of subdivision (e), when combined with the amount received from all other sources of reimbursement from the Medi-Cal program, exceed 100 percent of projected costs, as determined pursuant to the Medi-Cal State Plan, for adult day health services at each facility. (3) The supplemental Medi-Cal reimbursement provided by this section shall be distributed under a payment methodology based on adult day health services provided to Medi-Cal patients at the eligible facility, either on a per-visit basis or any other federally permissible basis. The department shall seek approval from the federal Centers for Medicare and Medicaid Services for the payment methodology to be utilized, and may not make any payment pursuant to this section prior to obtaining that approval. (d) (1) It is the Legislature’s intent in enacting this section to provide the supplemental reimbursement described in this section without any expenditure from the General Fund. (2) The state share of the supplemental reimbursement submitted to the federal Centers for Medicare and Medicaid Services for purposes of claiming federal financial participation shall be paid only with funds from the governmental entities described in paragraph (3) of subdivision (b) and certified to the state as provided in subdivision (e). (e) A particular governmental entity described in paragraph (3) of subdivision (b), on behalf of any eligible facility owned or operated by the entity shall do all of the following: (1) Certify, in conformity with the requirements of Section 433.51 of Title 42 of the Code of Federal Regulations, that the claimed expenditures for outpatient services are eligible for federal financial participation. (2) Provide evidence supporting the certification as specified by the department. (3) Submit data as specified by the department to determine the appropriate amounts to claim as expenditures qualifying for federal financial participation. (4) Keep, maintain, and have readily retrievable, any records specified by the department to fully disclose reimbursement amounts to which the eligible facility is entitled, and any other records required by the federal Centers for Medicare and Medicaid Services. (f) An eligible facility as described in subdivision (b), as a condition of receiving supplemental reimbursement under this section, shall enter into, and maintain, a contract with the department for the purpose of implementing this section, and to reimburse the department for its administrative costs of implementing this section. (g) (1) The department shall promptly seek any necessary federal approvals for the implementation of this section. If necessary to obtain federal approval, the department may limit the program to those costs that are allowable expenditures under Title XIX of the federal Social Security Act (Subchapter 19 (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code). If federal approval is not obtained for implementation of this section, this section shall become inoperative. (2) The department shall submit claims for federal financial participation for the expenditures for the services described in subdivision (e) that are allowable expenditures under federal law. (3) The department shall, on an annual basis, submit any necessary materials to the federal government to provide assurances that claims for federal financial participation will include only those expenditures that are allowable under federal law. (h) All funds expended pursuant to this section are subject to review and audit by the department. (i) This section shall become inoperative in the event, and on the date, of a final judicial determination by any court of appellate jurisdiction or a final determination by the administrator of the federal Centers for Medicare and Medicaid Services that the supplemental reimbursement provided in this section must be made to any facility not described in this section. (Amended by Stats. 2003, Ch. 62, Sec. 331. Effective January 1, 2004. Conditionally inoperative as provided in subd. (i).)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.96. (a) Each eligible facility, as described in subdivision (b), may, in addition to the rate of payment that the facility would otherwise receive for Medi-Cal outpatient services, receive supplemental Medi-Cal reimbursement to the extent provided in this section. (b) A facility shall be eligible for supplemental reimbursement only if the facility has all of the following characteristics continuously during a state fiscal year commencing with the 2002 fiscal year, and thereafter: (1) Provides services to Medi-Cal beneficiaries. (2) Is an acute care hospital providing outpatient hospital services. For purposes of this paragraph, “acute care hospital” means the facilities described by subdivision (a) or (b), or both, of Section 1250 of the Health and Safety Code. (3) Is owned or operated by a county, city, city and county, the University of California, or health care district organized pursuant to Division 23 (commencing with Section 32000) of the Health and Safety Code. (c) An eligible facility’s supplemental reimbursement pursuant to this section shall be calculated and paid as follows: (1) The supplemental reimbursement to an eligible facility, as described in subdivision (b), shall be equal to the amount of federal financial participation received as a result of the claims submitted pursuant to paragraph (2) of subdivision (g). (2) In no instance shall the amount certified pursuant to paragraph (1) of subdivision (e), when combined with the amount received from all other sources of reimbursement from the Medi-Cal program, exceed 100 percent of projected costs, as determined pursuant to the Medi-Cal State Plan, for outpatient services at each facility. (3) The supplemental Medi-Cal reimbursement provided by this section shall be distributed under a payment methodology based on outpatient services provided to Medi-Cal patients at the eligible facility, either on a per-visit basis, per-procedure basis, or any other federally permissible basis. The department shall seek approval from the federal Centers for Medicare and Medicaid Services for the payment methodology to be utilized, and may not make any payment pursuant to this section prior to obtaining that approval. (d) (1) It is the Legislature’s intent in enacting this section to provide the supplemental reimbursement described in this section without any expenditure from the General Fund. (2) The state share of the supplemental reimbursement submitted to the federal Centers for Medicare and Medicaid Services for purposes of claiming federal financial participation shall be paid only with funds from the governmental entities described in paragraph (3) of subdivision (b) and certified to the state as provided in subdivision (e). (e) A particular governmental entity, described in paragraph (3) of subdivision (b), on behalf of any eligible facility owned or operated by the entity, shall do all of the following: (1) Certify, in conformity with the requirements of Section 433.51 of Title 42 of the Code of Federal Regulations, that the claimed expenditures for the outpatient services are eligible for federal financial participation. (2) Provide evidence supporting the certification as specified by the department. (3) Submit data as specified by the department to determine the appropriate amounts to claim as expenditures qualifying for federal financial participation. (4) Keep, maintain, and have readily retrievable, any records specified by the department to fully disclose reimbursement amounts to which the eligible facility is entitled, and any other records required by the federal Centers for Medicare and Medicaid Services. (f) An eligible facility as described in subdivision (b), as a condition of receiving supplemental reimbursement under this section, shall enter into and maintain a contract with the department for the purpose of implementing this section, and to reimburse the department for its administrative costs of operating this program. (g) (1) The department shall promptly seek any necessary federal approvals for the implementation of this section. If necessary to obtain federal approval, the department may limit the program to those costs that are allowable expenditures under Title XIX of the federal Social Security Act (Subchapter 19 (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code). If federal approval is not obtained for implementation of this section, this section shall become inoperative. (2) The department shall submit claims for federal financial participation for the expenditures for the services described in subdivision (e) that are allowable expenditures under federal law. (3) The department shall, on an annual basis, submit any necessary materials to the federal government to provide assurances that claims for federal financial participation will include only those expenditures that are allowable under federal law. (h) This section shall become inoperative in the event, and on the date, of a final judicial determination by any court of appellate jurisdiction or a final determination by the administrator of the federal Centers for Medicare and Medicaid Services that the supplemental reimbursement provided in this section must be made to any facility not described in this section. (Amended by Stats. 2003, Ch. 62, Sec. 332. Effective January 1, 2004. Conditionally inoperative as provided in subd. (h).)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.97. (a) The department shall annually develop an outpatient disproportionate share factor for each hospital in California that receives Medi-Cal payments for outpatient services. That factor shall be the ratio of the sum of Medi-Cal gross outpatient revenue, county indigent programs gross outpatient revenue, and the outpatient component of other charity deductions from revenue, to total gross outpatient revenue. A hospital with a disproportionate factor that exceeds the mean factor for all hospitals in the state shall receive supplemental Medi-Cal payments in direct proportion to the level of the hospital’s disproportionate factor. This subdivision shall only apply to payments for services provided by disproportionate share hospitals on or after July 1, 1993. (b) Notwithstanding subdivision (a), the outpatient disproportionate share factors for children’s hospitals shall be no less than the amounts that would have been established had the disproportionate factors for all hospitals been computed as the ratio of the sum of Medi-Cal gross outpatient revenue, the outpatient component of county indigent programs contractual adjustments, and the outpatient component of other charity deductions from revenue, to total gross outpatient revenue. (c) The outpatient component of county indigent programs contractual adjustments shall be determined by calculating the ratio of county indigent programs gross outpatient revenue to county indigent programs gross total revenue, by multiplying that ratio by county indigent programs contractual adjustments. The outpatient component of other charity deductions from revenue shall be determined by calculating the ratio of other payors gross outpatient revenue to other payors gross total revenue, and multiplying that ratio by the sum of other charity deductions from revenue and teaching allowances for University of California teaching hospitals. (d) For purposes of computing the outpatient disproportionate share factors, the department shall use the data from the Office of Statewide Health Planning and Development quarterly financial and utilization reports, as adjusted by the office for the calendar year preceding the state fiscal year in which the disproportionate factors will be effective. The department shall use the data existing on the office’s statewide data base as of April 15 of each year. For the purposes of this section, a hospital shall submit to the office by April 1 of each year any adjustments to its quarterly reports for the preceding calendar year. The office shall make its statewide data base, as adjusted, available to the department by April 20 of each year. (e) Augmentation rates shall be applied to hospitals with all inclusive rates at the point of final audit settlement and shall be included in subsequent interim reimbursement rates. (f) (1) If the department deems it necessary to issue general rules in order to implement, interpret, or make specific this section or to establish procedures to implement this section, these rules may be issued without complying with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and shall remain in effect for a period of 180 days. (2) Thereafter, any rules that are necessary to implement, interpret, or make specific this section or that govern departmental procedures shall be adopted in compliance with the Administrative Procedure Act. (3) The adoption, pursuant to paragraph (1), of any emergency regulations that are filed with the Office of Administrative Law within one year of the effective date of this act shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health, or safety. (Amended by Stats. 1993, Ch. 385, Sec. 2. Effective September 8, 1993.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.98. (a) The following definitions shall apply for purposes of this section: (1) “Disproportionate share list” means an annual list of disproportionate share hospitals that provide acute inpatient services issued by the department for purposes of this section. (2) “Fund” means the Medi-Cal Inpatient Payment Adjustment Fund, created pursuant to Section 14163. (3) “Eligible hospital” means a hospital included on a disproportionate share list, which is eligible to receive payment adjustments under this section with respect to a particular state fiscal year. (4) “Hospital” means a health facility that is licensed pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code to provide acute inpatient hospital services, and includes all components of the facility. (5) “Payment adjustment” or “payment adjustment amount” means an amount paid under this section for acute inpatient hospital services provided by a disproportionate share hospital. (6) “Payment adjustment year” means the particular state fiscal year with respect to which payments are to be made to eligible hospitals under this section. (7) “Payment adjustment program” means the system of Medi-Cal payment adjustments for acute inpatient hospital services established by this section. (8) “Annualized Medi-Cal inpatient paid days” means the total number of Medi-Cal acute inpatient hospital days, regardless of dates of service, for which payment was made by or on behalf of the department to a hospital, under present or previous ownership, during the most recent calendar year ending prior to the beginning of a particular payment adjustment year, including all Medi-Cal acute inpatient covered days of care for hospitals which are paid on a different basis than per diem payments. (9) “Low-income utilization rate” means a percentage rate determined by the department in accordance with the requirements of Section 1396r-4(b)(3) of Title 42 of the United States Code, and included on a disproportionate share list. (10) “Low-income number” means a hospital’s low-income utilization rate rounded down to the nearest whole number, and included on a disproportionate share list. (11) “1991 Peer Grouping Report” means the final report issued by the department dated May 1991, entitled “Hospital Peer Grouping.” (12) “Major teaching hospital” means a hospital that meets the definition of a university teaching hospital, major nonuniversity teaching hospital, or large teaching emphasis hospital as set forth on page 51 of the 1991 Peer Grouping Report. (13) “Children’s hospital” means a hospital that meets the definition of a children’s hospital—state defined, as set forth on page 53 of the 1991 Peer Grouping Report, or which is listed in subdivision (a), or subdivisions (c) to (g), inclusive, of Section 16996. (14) “Acute psychiatric hospital” means a hospital that meets the definition of an acute psychiatric hospital, a combination psychiatric/alcohol-drug rehabilitation hospital, or a psychiatric health facility, to the extent the facility is licensed to provide acute inpatient hospital service, as set forth on page 52 of the 1991 Peer Grouping Report. (15) “Alcohol-drug rehabilitation hospital” means a hospital that meets the definition of an alcohol-drug rehabilitation hospital as set forth on page 52 of the 1991 Peer Grouping Report. (16) “Emergency services hospital” means a hospital that is a licensed provider of basic emergency services as described in Sections 70411 to 70419, inclusive, of Title 22 of the California Code of Regulations, or that is a licensed provider of comprehensive emergency medical services as described in Sections 70451 to 70459, inclusive, of Title 22 of the California Code of Regulations. (17) “Medi-Cal day of acute inpatient hospital service” means any acute inpatient day of service attributable to patients who, for those days, were eligible for medical assistance under the California state plan, including any day of service that is reimbursed on a basis other than per diem payments. (18) “Total per diem composite amount” means, for each eligible hospital for a particular payment adjustment year, the total of the various per diem payment adjustment amounts to be paid to the hospital for each eligible day as calculated under the applicable provisions of this section. (19) “Supplemental lump-sum payment adjustment” means a lump-sum amount paid under this section for acute inpatient hospital services provided by a disproportionate share hospital. (20) “Projected total payment adjustment amount” means, for each eligible hospital for a particular payment adjustment year, the amount calculated by the department as the projected maximum total amount the hospital is expected to receive under the payment adjustment program for the particular payment adjustment year (including all per diem payment adjustment amounts and any applicable supplemental lump-sum payment adjustments). (21) “To align the program with the federal allotment” means to modify the size of the payment adjustment program to be as close as reasonably feasible to, but not to exceed, the estimated or actual maximum state disproportionate share hospital allotment for the particular federal fiscal year for California under Section 1396r-4(f) of Title 42 of the United States Code. (22) “Descending pro rata basis” means an allocation methodology under which a pool of funds is distributed to hospitals on a pro rata basis until one of the recipient hospitals reaches its maximum payment limit, after which all remaining amounts in the pool are distributed on a pro rata basis to the recipient hospitals that have not reached their maximum payment limits, until another hospital reaches its maximum payment limit, and which process is repeated until the entire pool of funds has been distributed among the recipient hospitals. (23) “Secondary supplemental payment adjustment” means a payment adjustment amount, whether paid or payable, to an eligible hospital as a second type of supplemental distribution earned as of June 30, 1996, with respect to the 1995–96 payment adjustment year. (24) “OBRA 1993 payment limitation” means the hospital-specific limitation on the total annual amount of payment adjustments to each eligible hospital under the payment adjustment program that can be made with federal financial participation under Section 1396r-4(g) of Title 42 of the United States Code, as implemented pursuant to the Medi-Cal State Plan. (25) “Public hospital” means a hospital that is licensed to a county, a city, a city and county, the State of California, the University of California, a local health care district, a local health authority, or any other political subdivision of the state. (26) “Nonpublic hospital” means a hospital that satisfies all of the following: (A) The hospital does not meet the definition of a public hospital as described in paragraph (25). (B) The hospital does not meet the definition of a nonpublic-converted hospital as described in paragraph (27). (C) The hospital does not meet the definition of a converted hospital as described in paragraph (28). (27) “Nonpublic-converted hospital” means a hospital that satisfies all of the following, or, if two or more inpatient facilities are licensed by the department under a consolidated license, a hospital as to which any component of the hospital satisfies all of the following: (A) The hospital does not meet the definition of a public hospital as described in paragraph (25). (B) The hospital or such component, at any time during the 1994–95 payment adjustment year, was a public hospital as described in paragraph (25), whether or not the hospital or such component currently is located at the same site as it was located when it was a public hospital. (C) The hospital does not meet the definition of a converted hospital as described in paragraph (28). (28) “Converted hospital” means a hospital that satisfies both of the following: (A) The hospital does not meet the definition of a public hospital as described in paragraph (25). (B) The hospital, at any time during the 1999–2000 payment adjustment year, was an eligible hospital meeting the definition of a public hospital as described in paragraph (25), whether or not the hospital currently is located at the same site as it was located when it was a public hospital. (29) “Remained in operation” or “remains in operation” means that, except for closure or other cessation of services caused by natural disasters or other events beyond the hospital’s reasonable control, including labor disputes, the hospital was licensed to provide hospital inpatient services, and continued to provide, or was available to provide, hospital inpatient services to Medi-Cal patients throughout the particular time period in question. (30) “Maximum state disproportionate share hospital allotment for California” means, with respect to the 1998 federal fiscal year and subsequent federal fiscal years, that amount specified for California under Section 1396r-4(f) of Title 42 of the United State Code for that fiscal year, divided by the federal medical assistance percentage applicable for federal financial participation purposes for Medi-Cal program expenditures with respect to that same federal fiscal year. (31) “Applicable federal fiscal year” means, with respect to the 2000–01 payment adjustment year and subsequent payment adjustment years, the federal fiscal year that commences on October 1 of the particular payment adjustment year. (32) “Medical assistance increment” means the federal medical assistance percentage applicable for federal financial participation purposes for Medi-Cal program expenditures, expressed as a percentage, less the number one-half, expressed as a percentage. (b) For each fiscal year commencing with 1991–92, there shall be Medi-Cal payment adjustment amounts paid to hospitals pursuant to this section. The amount of payments made and the eligible hospitals for each payment adjustment year shall be determined in accordance with the provisions of this section. The payments are intended to support health care services rendered by disproportionate share hospitals. (c) For each fiscal year commencing with 1991–92, the department shall issue a disproportionate share list. The list shall be developed in accordance with subdivisions (e) and (f), and shall serve as a basis for payments under this section for the particular payment adjustment year. (d) (1) Except as otherwise provided by this section, the payment adjustment amounts under this section shall be distributed as a supplement to, and concurrent with, payments on all billings for Medi-Cal acute inpatient hospital services that are paid through Medi-Cal claims payment systems on or after July 1, 1991. In connection with those billings, the department shall pay payment adjustment amounts in accordance with subdivision (g), (h), (i), or (j), as applicable, to any hospital qualifying under subdivision (e). In addition, the department shall pay to each of those hospitals any supplemental lump-sum payment adjustment amounts that are payable, and shall adjust payment amounts, in accordance with applicable provisions of this section. The nonfederal share of all payment adjustment amounts shall be funded by amounts from the fund. The department shall obtain federal matching funds for the payment adjustment program through customary Medi-Cal accounting procedures. (2) As a limitation to paragraph (1), all payment adjustment amounts under this section, which are due with respect to billings paid through Medi-Cal claims payment systems on or after July 1, 1991, shall be suspended until the time federal approval is first obtained for the payment adjustment program as part of the Medi-Cal program. For purposes of this paragraph, federal approval requires both (i) approval by appropriate federal agencies of an amendment to the Medi-Cal State Plan, as referred to in subdivision (o), and (ii) confirmation by appropriate federal agencies regarding the availability of federal financial participation for the payment adjustment program at a level of at least 40 percent of the percentage of federal financial participation that is normally applicable for Medi-Cal expenditures for acute inpatient hospital services. At the time federal approval is first obtained, the department shall proceed pursuant to subparagraphs (A) and (B) in connection with the suspended payment adjustment amounts. (A) Except as provided by subdivision (l), or by any other subdivision of this section, any payment adjustment amounts which were suspended shall, within 60 days, be paid for all those billings paid through Medi-Cal claims payment systems during periods of time, on or after July 1, 1991, for which federal approval is first effective for the payment adjustment program. (B) Payment adjustment amounts shall not be paid in connection with any Medi-Cal billings which were paid through Medi-Cal claims payment systems during any period of time for which federal approval is not effective for the payment adjustment program. (3) As a limitation to paragraph (1), the amendments to this section enacted during calendar year 1993 shall not be implemented until the department has obtained any approvals that are necessary under federal law. Until all necessary federal approvals are obtained, the payment adjustment program shall continue as though no amendments had been enacted during calendar year 1993. When all necessary federal approvals have been obtained, the amendments enacted during calendar year 1993, shall be implemented effective as of the earliest effective date permissible under federal law. (4) As a limitation to paragraph (1), amendments to this section enacted during calendar year 1994 shall not be implemented until the department has obtained any approvals that are necessary under federal law. Until all necessary federal approvals are obtained, the payment adjustment program shall continue as though no amendments had been enacted during calendar year 1994. When all necessary federal approvals have been obtained, the amendments enacted during calendar year 1994 shall be implemented effective as of the earliest effective date permissible under federal law. Notwithstanding any other provision of law, on or after the date that federal approval is obtained the payments made prior to that date with respect to the 1994–95 payment adjustment year or subsequent payment adjustment years shall be deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate. (5) As a limitation to paragraph (1), amendments to this section enacted during June 1996 shall not be implemented until the department has obtained any approvals that are necessary under federal law. Until all necessary federal approvals are obtained, the payment adjustment program shall continue as though no amendments had been enacted during June 1996. When all necessary federal approvals have been obtained, the amendments enacted during June 1996 shall be implemented effective as of the earliest effective date permissible under federal law. Notwithstanding any other provision of law, on or after the date that federal approval is obtained, the payments made prior to that date with respect to the 1995–96 payment adjustment year shall be deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate. (6) As a limitation to paragraph (1), any amendment of this section enacted during the period August 1, 1996, to September 30, 1996, inclusive, shall not be implemented until the department has obtained any approvals that are necessary under federal law. Until all necessary federal approvals are obtained, the payment adjustment program shall continue as though no amendments had been enacted during the period August 1, 1996, to September 30, 1996, inclusive. When all necessary federal approvals have been obtained, the amendments enacted during the period August 1, 1996, to September 30, 1996, inclusive, shall be implemented effective as of the earliest effective date permissible under federal law. Notwithstanding any other provision of law, on or after the date that federal approval is obtained, the payments made prior to that date with respect to the 1996–97 payment adjustment year shall be deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate. (7) As a limitation to paragraph (1), any amendment of this section enacted during the period September 1, 1997, to September 30, 1997, inclusive, shall not be implemented until the department has obtained any approvals that are appropriate under federal law. Until appropriate federal approvals are obtained, the payment adjustment program shall continue as though amendments had not been enacted during the period September 1, 1997, to September 30, 1997, inclusive. When appropriate federal approvals have been obtained, the amendments enacted during the period September 1, 1997, to September 30, 1997, inclusive, shall be implemented effective as of the earliest effective date permissible under federal law. Notwithstanding any other provision of law, on or after the date that federal approval is obtained, the payments made prior to that date with respect to the 1997–98 payment adjustment year shall be deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate. (8) As a limitation to paragraph (1), any amendment of this section enacted during the 1998 calendar year shall not be implemented until the department has obtained any approvals that are appropriate under federal law. Until appropriate federal approvals are obtained, the payment adjustment program shall continue as though amendments had not been enacted during the 1998 calendar year. When appropriate federal approvals have been obtained, the amendments enacted during the 1998 calendar year shall be implemented effective as of the earliest effective date permissible under federal law. Notwithstanding any other provision of law, on or after the date that federal approval is obtained, the payments made prior to that date with respect to the particular payment adjustment year shall be deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate. (9) As a limitation to paragraph (1), any amendment of this section enacted during the period of June 1, 1999, to June 30, 1999, inclusive, shall not be implemented until the department has obtained any approvals that are appropriate under federal law. Until appropriate federal approvals are obtained, the payment adjustment program shall continue as though amendments had not been enacted during the period of June 1, 1999, to June 30, 1999, inclusive. When appropriate federal approvals have been obtained, the amendments enacted during the period of June 1, 1999, to June 30, 1999, inclusive, shall be implemented effective as of the earliest effective date permissible under federal law. Notwithstanding any other provision of law, on or after the date that federal approval is obtained, the payments made prior to that date with respect to the particular payment adjustment year shall be deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate. (10) As a limitation to paragraph (1), any amendment of this section enacted during the period of June 1, 2000, to June 30, 2000, inclusive, shall not be implemented until the department has obtained any approvals that are appropriate under federal law. Until appropriate federal approvals are obtained, the payment adjustment program shall continue as though amendments had not been enacted during the period of June 1, 2000, to June 30, 2000, inclusive. When appropriate federal approvals have been obtained, the amendments enacted during the period of June 1, 2000, to June 30, 2000, inclusive, shall be implemented effective as of the earliest effective date permissible under federal law. Notwithstanding any other provision of law, on or after the date that federal approval is obtained, the payments made prior to that date with respect to the particular payment adjustment year shall be deemed nonfinal payments for purposes of this section and Section 14163. Any of those amounts paid or payable prior to that date shall then be compared to the payments that would have been made pursuant to the program changes as approved by the federal government for all periods of time permissible under federal law, and the difference, if any, shall be paid or recouped by the department, as appropriate. (e) To qualify for payment adjustment amounts under this section, a hospital shall have been included on the disproportionate share list for the particular payment adjustment year. The list shall consist of those hospitals which satisfy both of the following requirements: (1) The hospital shall meet the federal requirements for disproportionate share status set forth in subsection (d) of Section 1396r-4 of Title 42 of the United States Code. (2) Either of the following shall apply: (A) The hospital’s medicaid inpatient utilization rate, as defined in Section 1396r-4(b)(2) of Title 42 of the United States Code, shall be at least one standard deviation above the mean medicaid inpatient utilization rate for hospitals receiving medicaid payments in the state. (B) The hospital’s low-income utilization rate shall exceed 25 percent. (f) (1) For the 1991–92 payment adjustment year, a disproportionate share list shall be issued by the department no later than 65 days after the enactment of this section. For subsequent payment adjustment years, a tentative listing shall be prepared by the department at least 60 days before the beginning of the particular payment adjustment year, and a disproportionate share list shall be issued no later than five days after the beginning of the particular payment adjustment year. All state agencies shall take all necessary steps to supply the most recent data available to the department to meet these deadlines. The Office of Statewide Health Planning and Development shall provide to the department quarterly access to the edited and unedited confidential patient discharge data files for all Medi-Cal eligible patients. The department shall maintain the confidentiality of that data to the same extent as is required of the Office of Statewide Health Planning and Development. In addition, the Office of Statewide Health Planning and Development shall provide to the department no later than March 1 of each year, the data specified by the department, as the data existed on the statewide data base file as of February 1 of each year (except that for the 1991–92 payment adjustment year, the Office of Statewide Health Planning and Development shall provide data as it existed on the statewide data base file as of August 30, 1991), from all of the following: (A) Hospital annual disclosure reports, filed with the Office of Statewide Health Planning and Development pursuant to Section 443.31 or 128735 of the Health and Safety Code, for hospital fiscal years which ended during the calendar year ending 13 months prior to the applicable February 1. (B) Annual reports of hospitals, filed with the Office of Statewide Health Planning and Development pursuant to Section 439.2 or 127285 of the Health and Safety Code, for the calendar year ending 13 months prior to the applicable February 1. (C) Hospital patient discharge data reports, filed with the Office of Statewide Health Planning and Development pursuant to subdivision (g) of Section 443.31 or 128735 of the Health and Safety Code, for the calendar year ending 13 months prior to the applicable February 1. (D) Any other materials on file with the Office of Statewide Health Planning and Development. (2) The disproportionate share list shall show all of the following: (A) The name and license number of the hospital. (B) Expressed as a percentage, the hospital’s Medi-Cal utilization rate and low-income utilization rate as referred to in paragraph (2) of subdivision (e). The department shall determine these rates in accordance with paragraph (4). (C) Based on the hospital’s low-income utilization rate, the hospital’s low-income number. (3) The department shall determine a hospital’s satisfaction of paragraph (1) of subdivision (e) based on the most recent annual data available, as it existed on the Office of Statewide Health Planning and Development statewide data base file as of February 1 of each year, and August 30 for the 1991–92 payment adjustment year, whether the data relates to operations under present or previous ownership. (4) To determine a hospital’s Medi-Cal inpatient utilization rate and low-income utilization rate for purposes of disproportionate share lists, the department shall utilize the same methodology, formulae, and data sources as set forth in connection with interim determinations in Attachment 4.19-A of the Medi-Cal State Plan (effective on or about July 1, 1990), and as subsequently amended by Medi-Cal State Plan amendments relating to the payment adjustment program submitted to and approved by the federal Health Care Financing Administration, except that the following shall apply: (A) The calculations shall not be interim, but shall be final for purposes of this section. (B) To the extent permitted by federal law, the payment adjustment amounts provided to hospitals pursuant to this section shall not be included for any purpose in the calculations and determinations made pursuant to this section. (C) Any other variation otherwise required by this section or by federal law. (D) The data utilized by the department shall relate to the hospital under present and previous ownership. When there has been a change of ownership, a change in the location of the main hospital facility, or a material change in patient admission patterns during the 24 months immediately prior to the payment adjustment year, and the change has resulted in a diminution of access for Medi-Cal inpatients at the hospital, all as determined by the department, the department shall, to the extent permitted by federal law, utilize current data that are reflective of the diminution of access, even if the data are not annual data. (E) Unless expressly provided otherwise by this section, the hospital’s low-income utilization rate shall be based on the most recent annual data available from annual hospital reports existing on the Office of Statewide Health Planning and Development data base file as of February 1 of each year. (F) (i) If, for the 1994–95 payment adjustment year, some or all of the annual data elements available to the department from hospital reports filed with the Office of Statewide Health Planning and Development for purposes of computing hospital low-income utilization rates are different than in prior years due to changes in data reporting requirements of the Office of Statewide Health Planning and Development or changes in other state health care programs, the department shall take the necessary steps to obtain from hospitals appropriate data in order to clarify the annual data filed with the Office of Statewide Health Planning and Development. This shall be done by the department in order to ensure that low-income utilization rates are determined in a manner as equivalent as possible to the approach and methodology used for the 1991–92 payment adjustment year. (ii) The efforts of the department to obtain and apply data for the purposes described in clause (i) shall include a survey to collect, from one or more hospitals, any data necessary to calculate the low-income utilization rates in accordance with clause (i). The purpose for the survey shall be to clarify the data already included by hospitals in their annual reports submitted to the Office of Statewide Health Planning and Development. The data requested by the department in the survey may include, among other things, information regarding the manner in which payments made to hospitals under this section were reported by the hospitals to the Office of Statewide Health Planning and Development. The data requested may also include information regarding the manner in which hospitals reported figures relating to charity care, bad debts, and amounts received in connection with state or local indigent care programs. (iii) In connection with any survey conducted under clause (ii), the department may require that hospitals submit responses in accordance with a deadline established by the department, and that the responses be supported by a verification of a hospital representative. Should any hospital not respond on a timely basis in accordance with protocols established by the department, the department shall utilize prior year data, adjusted by the department in its discretion, to calculate the hospital’s low-income utilization rate. (G) Notwithstanding any other provision of law, all payment adjustment amounts, including per diem payment adjustment amounts and supplemental lump-sum payment adjustments, paid or payable to a hospital under this section, shall be recorded on an accrual basis of accounting in reports filed by the hospital with the Office of Statewide Health Planning and Development or the department. (5) For purposes of payment adjustment amounts under this section, each disproportionate share list shall be considered complete when issued by the department pursuant to paragraph (1). Nothing on a disproportionate share list, once issued by the department, shall be modified for any reason, other than mathematical or typographical errors or omissions on the part of the department or the Office of Statewide Health Planning and Development in preparation of the list. (6) No Medi-Cal State Plan amendment of the type referred to in paragraph (4) shall be valid if inconsistent with this section. For those Medi-Cal State Plan amendments of the type referred to in paragraph (4), to be initially submitted to the federal Health Care Financing Administration on or after the operative date of this paragraph, these amendments shall be provided to representatives of the hospital industry, including, but not limited to, the California Healthcare Association, as soon as possible, but in no event less than 30 days prior to submission of the amendment to the federal Health Care Financing Administration. If, in the public interest, the director determines that exigent circumstances necessitate that the 30-day requirement cannot be met, the director shall immediately in writing advise the Chairperson of the Senate Committee on Health and Human Services and the Assembly Committee on Health of the exigent circumstances and the department’s timetable for providing the amendment to the hospital industry. (g) For each Medi-Cal day of acute inpatient hospital service paid by or on behalf of the department during a payment adjustment year, regardless of dates of service, to a hospital on the applicable disproportionate share list, where that hospital, on the first day of the payment adjustment year, is a major teaching hospital, the hospital shall be paid the sum of all of the following amounts, except as limited by other applicable provisions of this section: (1) A minimum payment adjustment of three hundred dollars ($300). (2) The sum of the following amounts, minus three hundred dollars ($300): (A) A ninety dollar ($90) payment adjustment for each percentage point, from 25 percent to 29 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (B) A seventy dollar ($70) payment adjustment for each percentage point, from 30 percent to 34 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (C) A fifty dollar ($50) payment adjustment for each percentage point, from 35 percent to 44 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (D) A thirty dollar ($30) payment adjustment for each percentage point, from 45 percent to 64 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (E) A ten dollar ($10) payment adjustment for each percentage point, from 65 percent to 80 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (3) If the sum calculated under paragraph (2) is less than zero, it shall be disregarded for payment purposes. (h) For each Medi-Cal day of acute inpatient hospital service paid by or on behalf of the department during a payment adjustment year, regardless of dates of service, to a hospital on the applicable disproportionate share list, where that hospital, on the first day of the payment adjustment year, is a children’s hospital, the hospital shall be paid the sum of four hundred fifty dollars ($450), except as limited by other applicable provisions of this section. (i) For each Medi-Cal day of acute inpatient hospital service paid by or on behalf of the department during a payment adjustment year, regardless of dates of service, to a hospital on the applicable disproportionate share list, where that hospital, on the first day of the payment adjustment year, is an acute psychiatric hospital or an alcohol-drug rehabilitation hospital, the hospital shall be paid the sum of all of the following amounts, except as limited by other applicable provisions of this section: (1) A minimum payment adjustment of fifty dollars ($50). (2) The sum of the following amounts, minus fifty dollars ($50): (A) A ten dollar ($10) payment adjustment for each percentage point, from 25 to 29 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (B) A seven dollar ($7) payment adjustment for each percentage point, from 30 to 34 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (C) A five dollar ($5) payment adjustment for each percentage point, from 35 to 44 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (D) A two dollar ($2) payment adjustment for each percentage point, from 45 to 64 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (E) A one dollar ($1) payment adjustment for each percentage point, from 65 to 80 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (3) If the sum calculated under paragraph (2) is less than zero, it shall be disregarded for payment purposes. (j) For each Medi-Cal day of acute inpatient hospital service paid by or on behalf of the department during a payment adjustment year, regardless of dates of service, to a hospital on the applicable disproportionate share list, where that hospital does not meet the criteria for receiving payments under subdivision (g), (h), or (i) above, the hospital shall be paid the sum of all of the following amounts, except as limited by other applicable provisions of this section: (1) A minimum payment adjustment of one hundred dollars ($100). (2) If the hospital is an emergency services hospital at the time the payment adjustment is paid, a two hundred dollar ($200) payment adjustment. (3) The sum of the following amounts minus one hundred dollars ($100), and minus an additional two hundred dollars ($200) if the hospital is an emergency services hospital at the time the payment adjustment is paid: (A) A forty dollar ($40) payment adjustment for each percentage point, from 25 percent to 29 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (B) A thirty-five dollar ($35) payment adjustment for each percentage point, from 30 percent to 34 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (C) A thirty dollar ($30) payment adjustment for each percentage point, from 35 percent to 44 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (D) A twenty dollar ($20) payment adjustment for each percentage point, from 45 percent to 64 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (E) A fifteen dollar ($15) payment adjustment for each percentage point, from 65 percent to 80 percent, inclusive, of the hospital’s low-income number as shown on the disproportionate share list. (4) If the sum calculated under paragraph (3) is less than zero, it shall be disregarded for payment purposes. (k) (1) For any particular payment adjustment year, no hospital may qualify for payments under more than one subdivision among subdivisions (g), (h), (i), and (j). If any hospital qualifies under more than one subdivision, the department shall determine which subdivision shall apply for payments. (2) For each payment adjustment year beginning with 1992–93, the total applicable per diem payment adjustment amount calculated for each eligible hospital pursuant to subdivision (g), (h), (i), or (j) shall be adjusted by a percentage identical to the percentage increase in transfer amounts that the department has authorized for use pursuant to paragraph (1) of subdivision (h) of Section 14163 for the particular fiscal year. (3) If an eligible hospital ordinarily is paid by or on behalf of the department for Medi-Cal acute inpatient hospital services based on a payment methodology other than per diem payments, the eligible hospital shall receive payment adjustment amounts under subdivision (g), (h), (i), or (j) of this section based on its approved Medi-Cal days of acute inpatient hospital care, in the same fashion as all other eligible hospitals under this section. (l) (1) (A) In determining Medi-Cal days of service for purposes of payment adjustments under this section, the department shall recognize all acute inpatient hospital days of service required to be taken into account under federal law. (B) For the 1992–93 payment year, the department may consider the Medi-Cal days of service provided by the qualifying hospitals for Medi-Cal patients covered by the prepaid health plans contracting directly with the Medi-Cal program in achieving their maximum payments. (C) For 1993–94 and subsequent payment years, the department may consider the Medi-Cal days of service provided by hospitals for Medi-Cal patients covered by the prepaid health plans contracting directly with the Medi-Cal program in determining the Medi-Cal utilization rate and the maximum days of payment. Additionally, the department may consider the days of service provided by the qualifying hospitals for Medi-Cal patients covered by the prepaid health plans contracting directly with the Medi-Cal program in achieving their maximum payments in those payment years. (D) In order to meet the requirements of subparagraph (C), the Office of Statewide Health Planning and Development shall provide to the department quarterly access to all data elements on the edited and unedited confidential patient discharge data files, including Social Security account numbers. The department shall match these data with the department’s Medi-Cal Eligibility Data System files to extract any data necessary to meet the requirements of subparagraph (C). The department shall maintain the confidentiality of all patient discharge data to the same extent as is required of the Office of Statewide Health Planning and Development. (2) Notwithstanding paragraph (1), there shall be, for each eligible hospital, a maximum limit on the number of Medi-Cal acute inpatient hospital days for which payment adjustment amounts may be paid under this section with respect to each payment adjustment year. The maximum limit shall be that number of days that equals 80 percent of the eligible hospital’s annualized Medi-Cal inpatient paid days, as determined from all Medi-Cal paid claims records available through April 1 preceding the beginning of the payment adjustment year. (m) No payment rate for any service rendered by any hospital under the Medi-Cal selective provider contracting program shall be reduced as a result of this section. (n) Notwithstanding any other provision of law, to the extent consistent with federal law, and except as provided by this section, no maximum payment limit shall be placed on the amount of Medi-Cal payment adjustments which may be made to disproportionate share hospitals. The payments made to disproportionate share hospitals pursuant to this section and Section 14105.99 shall not cause any other amounts paid or payable to a hospital to be deemed in excess of any applicable maximum payment limit. (o) The department shall promptly seek any necessary federal approvals in order to implement this section, including any amendments. Pursuant to Section 1396r-4 of Title 42 of the United States Code, and related federal medicaid statutes and regulations, payment adjustment systems for inpatient hospital services rendered by disproportionate share hospitals shall be included in a state’s medicaid plan. Therefore, the department shall, prior to the end of the calendar quarter during which this section is enacted or amended, submit for federal approval an amendment to the Medi-Cal State Plan in connection with the payment adjustment program. (p) (1) The department shall compute, prior to the beginning of each payment adjustment year, the projected size of the payment adjustment program for the particular payment adjustment year. To do so, the department shall determine the projected total payment adjustment amount for each eligible hospital, and shall add these amounts together to determine the projected total size of the program. To the extent this projected total figure for the program exceeds the portion of the maximum state disproportionate share hospital allotment for California under federal law that the department anticipates will be available for the period in question, the department shall reduce the total per diem composite amounts of the various eligible hospitals in the fashion described below so that the allotment in question will not be exceeded. (2) As an initial step, all total per diem composite amounts for the entire payment adjustment year shall be reduced proportionately not to exceed 2 percent of each total per diem composite amount. (3) If the reductions authorized by paragraph (2) are insufficient to align the program with the federal allotment for California, then, to the extent permitted by federal law, the following shall apply: (A) The adjusted total per diem composite amounts, as calculated under paragraph (2), shall remain in effect for each eligible hospital whose low-income number is 30 percent or more. (B) The adjusted total per diem composite amounts, as calculated under paragraph (2), for all other eligible hospitals shall be further reduced proportionately to align the program with the federal allotment, but in no event to a level that is less than 65 percent of the total per diem composite amount that would have been payable to the eligible hospital had no reductions taken place. (4) If the steps set forth in paragraph (3) are not permissible under federal law, or are not adequate to align the program with the federal allotment, the adjusted total per diem composite amounts for all eligible hospitals for the entire payment adjustment year shall be further reduced proportionately to align the program with the federal allotment, but in no event to a level that would result in adjusted total per diem composite amounts that are less than 65 percent of the total per diem composite amounts that would have been payable had no reductions taken place. (5) When all eligible hospitals have been reduced to the 65-percent level set forth in paragraphs (3) and (4), the adjusted total per diem composite amounts for all eligible hospitals shall be further reduced proportionately as necessary to align the program with the federal allotment. (6) This subdivision shall not apply to the 1995–96 payment adjustment year. (q) (1) If it is necessary to apply the provisions of paragraph (3) of subdivision (p) at any time, the department shall, as soon as practicable, evaluate why the insufficiency arose and identify the projected occurrence and duration of any future insufficiencies. (2) If the department determines as a result of the evaluations under paragraph (1) that (A) implementation of paragraph (3) of subdivision (p) will likely be necessary to resolve additional insufficiencies for the current payment adjustment year or the next payment adjustment year; and (B) that the level of federal financial participation realized by the payment adjustment program, for the current payment adjustment year as a whole, will be less than 30 percent of the percentage of federal financial participation that normally is applicable for Medi-Cal expenditures for acute inpatient hospital services, and that the level of federal financial participation for the payment adjustment program is expected to continue to remain below that 30-percent level for the next payment adjustment year as a whole, the department shall, as soon as practicable, implement paragraphs (3) and (4). (3) If the department determines that the circumstances described in paragraph (2) are present, the payment adjustment program shall be terminated, effective as of the earliest date permissible under federal law. In that event, all installment payments to the fund which are already due pursuant to Section 14163 at the time of the department’s determination shall remain due, and shall be collected by the Controller. However, installment payments which are not yet due at that time shall not become due. (4) Within 90 days after the termination of the payment adjustment program, as referred to in paragraph (3), or as soon as practicable, the department shall determine whether any amounts remain in the fund that are not needed to pay prior payment adjustment amounts under this section. If remaining amounts exist in the fund, they shall be refunded to transferor entities on a pro rata basis, within 45 days after the date of the department’s determination. (r) (1) The state shall be held harmless from any federal disallowance resulting from payments made under this section, and from payments made to hospitals based on transfers accepted by the department under Section 14164. Any hospital that has received payments under this section, or based on transfers accepted by the department under Section 14164, shall be liable for any audit exception or federal disallowance only with respect to the payments made to that hospital. The department shall recoup from a hospital the amount of any audit exception or federal disallowance in the manner authorized by applicable laws and regulations. (2) Notwithstanding any other provisions of law, if any payment adjustment that has been paid, or that otherwise would have been payable to an eligible hospital under this section, exceeds the OBRA 1993 payment limitation for the particular hospital, the department shall withhold or recoup the payment adjustment amount that exceeds the limitation. The nonfederal component of the amount withheld or recouped shall be redeposited in, or shall remain in, the fund, as applicable, until used for the purposes described in paragraph (2) of subdivision (j) of Section 14163. (s) (1) The department may utilize existing administrative appeal procedures for purposes of any appealable matter that arises under the payment adjustment program. The matters that may be appealed shall be limited to those related to the following: (A) Paragraph (5) of subdivision (f). (B) State audit disallowances of amounts paid to hospitals under the payment adjustment program. (2) Calculations which are final pursuant to paragraph (4) or (5) of subdivision (f) or the procedures or data on which those calculations are based, shall not be appealed. (t) (1) Except as provided in paragraph (2), the department shall take all appropriate steps permitted by law and the Medi-Cal State Plan to ensure the following for all years of the payment adjustment program: (A) That well-baby (nursery) days and acute administrative days are included in the payment adjustment program in the same fashion as all other Medi-Cal days of acute inpatient hospital service. (B) That, to the same extent as any other Medi-Cal days of acute inpatient hospital service, well-baby (nursery) days and acute administrative days are included as payable days under the payment adjustment program and in the total of annualized Medi-Cal inpatient paid days. (C) That, if pursuant to paragraph (2), any well-baby (nursery) days or acute administrative days are not included in the payment adjustment program for payment purposes for any parts of the 1992–93 or 1993–94 payment adjustment years, all those days are nevertheless included in the total of annualized Medi-Cal inpatient paid days for all purposes under the payment adjustment program, unless otherwise barred by paragraph (2). (2) In no event shall paragraph (1) be implemented in a fashion that is inconsistent with federal medicaid law or the Medi-Cal State Plan. (u) (1) For the 1993–94 payment adjustment year, each eligible hospital shall also be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the hospital being included on the disproportionate share list as of September 30, 1993. For purposes of federal medicaid rules, including Section 447.297(d) of Title 42 of the Code of Federal Regulations, the supplemental payment adjustments shall be applicable to the federal fiscal year that ends on September 30, 1993. (2) The availability of supplemental payment adjustments under this subdivision shall be determined as follows: (A) The final maximum state disproportionate share hospital allotment for California under the provisions of applicable federal medicaid rules shall be identified for the 1993 federal fiscal year. This final allotment is two billion one hundred ninety-one million four hundred fifty-one thousand dollars ($2,191,451,000), as specified at page 43186 of Volume 58 of the Federal Register. (B) The total amount of all per diem payment adjustment amounts under this section, whether paid or payable, that are applicable to the 1993 federal fiscal year shall be determined. The applicability of the per diem payment adjustment amounts to the 1993 federal fiscal year shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (C) The figure determined under subparagraph (B) shall be subtracted from the figure identified under subparagraph (A). If the remainder is a positive figure, supplemental lump-sum payment adjustments shall be made under this subdivision in accordance with paragraph (3). (3) The amount of the supplemental lump-sum payment adjustment to each eligible hospital shall be computed as follows: (A) The projected total of all per diem payment adjustment amounts payable to each particular eligible hospital under this section for the 1993–94 payment adjustment year shall be determined. For each hospital, this figure shall be identical to the figure used for the same hospital in the calculations regarding transfer amounts under subdivision (h) of Section 14163 for the 1993–94 state fiscal year. (B) The projected totals for all eligible hospitals determined under subparagraph (A) shall be added together to determine an aggregate total of all projected per diem payment adjustments for the 1993–94 payment adjustment year. This figure shall be identical to the aggregate figure for all hospitals used in the calculations regarding transfer amounts under subdivision (h) of Section 14163 for the 1993–94 state fiscal year. (C) The figure determined for each eligible hospital under subparagraph (A) shall be divided by the aggregate figure determined under subparagraph (B), yielding a percentage figure for each hospital. (D) The percentage figure determined for each hospital under subparagraph (C) shall be multiplied by the positive remainder calculated under subparagraph (C) of paragraph (2). (E) The product as so determined for each eligible hospital under subparagraph (D) shall be the supplemental lump-sum payment adjustment amount payable to the particular hospital. (4) The department shall make partial payments of the supplemental lump-sum payment adjustments to eligible hospitals on or before January 1, 1994. The department shall make final calculations regarding the supplemental lump-sum payments based on data available as of March 1, 1994, and shall distribute the final payments promptly thereafter. (5) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. In doing so, the department shall comply with any procedures instituted by the Health Care Financing Administration in connection with Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (v) (1) For the 1993–94 payment adjustment year, each eligible hospital that remains in operation as of June 30, 1994, shall also be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the hospital being a disproportionate share hospital in operation as of that date. (2) The availability of supplemental lump-sum payment adjustments under this subdivision shall be determined by the department as follows: (A) The final maximum state disproportionate share hospital allotment for California under the provisions of applicable federal medicaid rules shall be identified for the 1994 federal fiscal year. This final allotment is two billion one hundred ninety-one million four hundred fifty-one thousand dollars ($2,191,451,000), as specified on page 22676 of Volume 59 of the Federal Register. (B) The total amount of all per diem payment adjustment amounts under this section, whether paid or payable, that are applicable to the period October 1, 1993, through June 30, 1994, shall be determined. The applicability of the per diem payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (C) The figure determined under subparagraph (B) shall be subtracted from the figure identified under subparagraph (A). If the remainder is a positive figure, supplemental lump-sum payment adjustments shall be made under this subdivision in accordance with paragraph (3). (3) The amount of the supplemental lump-sum payment adjustment to each hospital shall be computed as follows: (A) The projected total of all other payment adjustment amounts payable to each particular hospital under this section applicable to the 1993–94 payment adjustment year shall be determined. For each hospital, this figure shall be identical to the sum of the figures used for the same hospital in the calculations regarding transfer amounts under subdivision (h) of Section 14163 for the 1993–94 state fiscal year, not including the supplemental lump-sum payments described in this subdivision. (B) The projected totals for all hospitals determined under subparagraph (A) shall be added together to determine an aggregate total. This aggregate total shall be identical to the aggregate figure for all hospitals used in the calculations regarding transfer amounts under subdivision (h) of Section 14163 for the 1993–94 state fiscal year, not including the supplemental lump-sum payments described in this subdivision. (C) The figure determined for each hospital under subparagraph (A) shall be divided by the aggregate figure determined under subparagraph (B), yielding a percentage figure for each hospital. (D) The percentage figure determined for each hospital under subparagraph (C) shall be multiplied by the positive remainder calculated under subparagraph (C) of paragraph (2). (E) The product determined under subparagraph (D) for each hospital shall be the supplemental lump-sum payment adjustment amount payable to the particular hospital, which shall be payable because the facility is a disproportionate share hospital in operation as of June 30, 1994. (4) The department shall make interim and final payments of the supplemental lump-sum payment adjustments to hospitals on or before October 31, 1994. (5) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. In doing so, the department shall comply with any procedures instituted by the Health Care Financing Administration in connection with Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (w) (1) For the 1994–95 payment adjustment year, each eligible hospital that remains in operation as of June 30, 1995, shall also be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the hospital being a disproportionate share hospital in operation as of that date. (2) The availability of supplemental lump-sum payment adjustments under this subdivision shall be determined by the department as follows: (A) The final maximum state disproportionate share hospital allotment for California under the provisions of applicable federal medicaid rules shall be identified for the 1995 federal fiscal year. (B) The total amount of all per diem payment adjustment amounts under this section, whether paid or payable, that are applicable to the period October 1, 1994, through June 30, 1995, shall be determined. The applicability of the per diem payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (C) The figure determined under subparagraph (B) shall be subtracted from the figure identified under subparagraph (A). If the remainder is a positive figure, supplemental lump-sum payment adjustments shall be made under this subdivision in accordance with paragraph (3). (3) The amount of the supplemental lump-sum payment adjustment to each hospital shall be computed as follows: (A) The projected total of all other payment adjustment amounts payable to each particular hospital under this section applicable to the 1994–95 payment adjustment year shall be determined. For each hospital, this figure shall be identical to the sum of the figures used for the same hospital in the calculations regarding transfer amounts under subdivision (h) of Section 14163 for the 1994–95 state fiscal year, not including the supplemental lump-sum payments described in this subdivision. (B) The projected totals for all hospitals determined under subparagraph (A) shall be added together to determine an aggregate total. This aggregate total shall be identical to the aggregate figure for all hospitals used in the calculations regarding transfer amounts under subdivision (h) of Section 14163 for the 1994–95 state fiscal year, not including the supplemental lump-sum payments described in this subdivision. (C) The figure determined for each hospital under subparagraph (A) shall be divided by the aggregate figure determined under subparagraph (B), yielding a percentage figure for each hospital. (D) The percentage figure determined for each hospital under subparagraph (C) shall be multiplied by the positive remainder calculated under subparagraph (C) of paragraph (2). (E) The product as so determined under subparagraph (D) for each hospital shall be the supplemental lump-sum payment adjustment amount payable to the particular hospital, which shall be payable because the facility is a disproportionate share hospital in operation as of June 30, 1995. (4) The department shall make interim and final payments of the supplemental lump-sum payment adjustments to hospitals on or before October 31, 1995. (5) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. In doing so, the department shall comply with any procedures instituted by the Health Care Financing Administration in connection with Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (x) (1) With respect to per diem payment adjustments otherwise payable in connection with the period of July 1 through September 30 of the 1994–95 payment adjustment year, payment adjustment amounts shall be adjusted as described in paragraph (2). (2) No per diem payment adjustment amounts shall be payable in connection with the period of July 1 through September 30 of the 1994–95 payment adjustment year. The Medi-Cal days of acute inpatient hospital service paid by or on behalf of the department that otherwise would have given rise to payment adjustment amounts with respect to this period of time shall not count toward the maximum limit set forth in paragraph (2) of subdivision (l). (y) Notwithstanding any other provision of law, except subdivision (z), the payment adjustment program for the 1995–96 payment adjustment year shall be structured as set forth below. (1) (A) The department shall, in the manner used for prior years, compute the projected total payment adjustment amounts for all eligible hospitals, by determining for each eligible hospital its total per diem composite amount and multiplying that figure by 80 percent of the hospital’s annualized Medi-Cal inpatient paid days. (B) The products of the calculations under subparagraph (A) for all eligible hospitals shall be added together. The sum of all these figures shall be the unadjusted projected total payment adjustment program for the 1995–96 payment adjustment year. (2) The remaining amount available as part of the state disproportionate share hospital allotment for California under applicable federal rules for July 1995 through September 1995 (as part of the 1995 federal fiscal year) shall be recognized as being zero. (3) The department shall estimate what the state disproportionate share hospital allotment for California will be for the 1996 federal fiscal year under applicable federal rules. The estimate shall not exceed the allotment that was applicable for California for the 1995 federal fiscal year. (4) The estimate identified by the department under paragraph (3) shall be reduced by subtracting the total amount of the supplemental lump-sum payments paid or payable under subdivisions (v) and (w). (5) The remainder determined under paragraph (4) shall be added to the amount determined under paragraph (2). The total of those two amounts shall be the unadjusted tentative size of the payment adjustment program for the 1995–96 payment adjustment year. (6) The total per diem composite amount computed for each eligible hospital under subparagraph (A) of paragraph (1) shall be modified as follows: (A) The department shall reduce the total per diem composite amount for each eligible hospital by multiplying the amount by an identical percentage. The percentage figure to be used for this purpose shall be that percentage that is derived by dividing the amount determined under paragraph (5) by the unadjusted projected total payment adjustment program amount determined under subparagraph (B) of paragraph (1). (B) The percentage figure derived under subparagraph (A) shall be applied to the total per diem composite amount for each eligible hospital, yielding an adjusted total per diem composite amount for each hospital for the 1995–96 payment adjustment year. (C) (i) The adjusted total per diem composite amount determined under subparagraph (B) for each eligible hospital shall be multiplied by 80 percent of the hospital’s annualized Medi-Cal inpatient paid days. (ii) The amount computed for each hospital under clause (i) shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital. (iii) Where the amount computed under clause (i) for the particular hospital is less than the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) shall be used for purposes of clause (v). (iv) Where the amount computed under clause (i) for the particular hospital exceeds the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) shall be reduced to an amount equal to the OBRA 1993 payment limitation for the particular hospital. The amount as so reduced shall be used for purposes of clause (v). (v) The amount for each hospital, as determined under either clause (iii) or clause (iv), as applicable, shall be the adjusted projected total payment adjustment amount for the hospital for the 1995–96 payment adjustment year. (D) The adjusted figures computed for all eligible hospitals under subparagraph (C) shall be added together, yielding the adjusted tentative size of the payment adjustment program for the 1995–96 payment adjustment year. (7) The adjusted tentative size of the payment adjustment program for the 1995–96 payment adjustment year as determined under subparagraph (D) of paragraph (6), and the adjusted projected total payment adjustment amount for each eligible hospital, as determined under subparagraph (C) of paragraph (6), shall be distributed as follows: (A) No per diem payment adjustment amounts shall be payable in connection with the period of July 1 through September 30 of the 1995–96 payment adjustment year. The Medi-Cal days of acute inpatient hospital service paid by or on behalf of the department that otherwise would have given rise to payment adjustment amounts with respect to this period of time shall not count toward the maximum limit set forth in paragraph (2) of subdivision (l). (B) For all eligible hospitals, the adjusted per diem composite amounts (as determined under subparagraph (B) of paragraph (6)) shall be the amounts payable with respect to the period of October 1 through June 30 of the 1995–96 payment adjustment year, subject to the applicable provisions of subdivision (z). (8) For the 1995–96 payment adjustment year, each eligible hospital that remains in operation as of June 30, 1996, shall also be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date. The availability of supplemental lump-sum payment adjustments under this paragraph shall be determined by the department as follows: (A) The adjusted projected total payment adjustment amount for each hospital, as determined under subparagraph (C) of paragraph (6), shall be identified. (B) The total amount of all per diem payment adjustment amounts under this section, whether paid or payable, that are applicable to the period July 1, 1995, through June 30, 1996, shall be determined for each hospital, taking into account subparagraph (A) of paragraph (7). The applicability of the per diem payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (C) The amount determined under subparagraph (B) for each hospital shall be subtracted from the amount identified under subparagraph (A) for each hospital. If the remainder is a positive figure for the particular hospital, the supplemental lump-sum payment adjustment for the hospital shall be the positive remainder amount, which shall be payable because the facility is a disproportionate share hospital in operation as of June 30, 1996. (D) The department shall make interim and final payments of the supplemental lump-sum payment adjustments under this paragraph on or before September 30, 1996. (9) Except as provided in subparagraph (C), for the 1995–96 payment adjustment year each eligible hospital that remains in operation as of June 30, 1996, shall also be eligible to receive a secondary supplemental payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date. The availability of secondary supplemental payment adjustments under this paragraph shall be determined by the department as follows: (A) The maximum amount of secondary supplemental payment adjustments available pursuant to this paragraph shall be calculated as follows: (i) The total amount of all per diem payment adjustment amounts, whether paid or payable, for the 1995–96 payment adjustment year, as determined under subparagraph (B) of paragraph (8), shall be identified. (ii) The total amount of all supplemental lump-sum payment adjustments, whether paid or payable, as determined under subparagraph (C) of paragraph (8), shall be identified. (iii) The department shall estimate the total amount of payment adjustments under this section that it anticipates will be applicable to the period July 1, 1996, through September 30, 1996. The applicability of the payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (iv) The department shall identify the amount of the final maximum state disproportionate share hospital allotment for California for the 1996 federal fiscal year under applicable federal rules. The amount identified shall not exceed two billion one hundred ninety-one million four hundred fifty-one thousand dollars ($2,191,451,000). (v) The amounts identified or estimated under clauses (i), (ii), and (iii) shall be added together, and the sum of these amounts shall be subtracted from the amount identified under clause (iv). The remainder determined from this calculation, or the amount of two hundred million dollars ($200,000,000), whichever is less, shall be the maximum amount available for secondary supplemental payment adjustments under this paragraph. (B) The maximum amount available for secondary supplemental payment adjustments, as identified under clause (v) of subparagraph (A), shall be distributed to eligible hospitals as follows: (i) The total amount of all per diem payment adjustments and supplemental lump-sum payment adjustments relating to the 1995–96 payment adjustment year, whether paid or payable, shall be identified for each eligible hospital. However, notwithstanding any other provision of law, those hospitals referred to in subparagraph (C) shall not be included in this step, and shall not receive any secondary supplemental payment adjustments, as described in subparagraph (C). (ii) For purposes of secondary supplemental payment adjustments, the eligible hospitals shall be classified into various groups. No hospital may qualify for more than one of these groups. Notwithstanding subclause (II), the hospitals described in subparagraph (C) shall not be included in any of these groups. The following groups of hospitals shall be recognized: (I) “State of California hospitals,” which shall include all eligible hospitals that, as of July 1, 1995, were licensed to the State of California or to the University of California. (II) “County hospitals,” which shall include all eligible hospitals that, as of July 1, 1995, were licensed to a county or a city and county, but shall exclude those hospitals referred to in subparagraph (C). (III) “Other public hospitals,” which shall include all eligible hospitals that, as of July 1, 1995, were licensed to a local hospital district, a local health authority, a city, or any other noncounty political subdivision of the state. (IV) “Children’s hospitals,” which shall include all eligible hospitals that, as of July 1, 1995, were included in the children’s hospital group under subdivision (h). (V) “Other nonpublic hospitals,” which shall include all eligible hospitals that are not included in any group described in subclauses (I) through (IV). (iii) The amount determined to be the maximum amount of secondary supplemental payment adjustments under clause (v) of subparagraph (A) shall first be allocated among the groups of hospitals referred to in clause (ii), as follows: (I) “State of California hospitals”: 64.35 percent of the maximum amount. (II) “County hospitals”: 18.095 percent of the maximum amount. (III) “Other public hospitals”: 0.65 percent of the maximum amount. (IV) “Children’s hospitals”: 6.755 percent of the maximum amount. (V) “Other nonpublic hospitals”: 10.15 percent of the maximum amount. (iv) (I) The amount of funds allocated pursuant to clause (iii) to each of the particular groups of hospitals referred to in clauses (ii) and (iii) shall then be distributed as secondary supplemental payment adjustments among the eligible hospitals within each particular group. The secondary supplemental distributions shall be made on a descending pro rata basis within each group. Each cycle of the descending pro rata distribution shall be considered to be a phase of the process. As described in subclauses (II) to (V), inclusive, in each phase of the descending pro rata distribution, the pro rata share of the distribution to each hospital that remains eligible to receive additional distributions shall be computed based on the ratio of the total payment adjustments that the particular hospital has already earned under the payment adjustment program for the 1995–96 payment adjustment year, as compared to the total payment adjustments already earned by the other hospitals in the particular group that remain eligible to receive the additional distributions. (II) For the first phase, the total amount of payment adjustments under this section for the 1995–96 payment adjustment year, including all per diem payment adjustments and all supplemental lump-sum payment adjustments, that are determined by the department as already being paid or payable to each hospital eligible for the distribution shall be determined. (III) The figures determined under subclause (II) for each hospital in the particular group shall be added together to determine an aggregate total. (IV) The figures determined for each hospital under subclause (II) shall be divided by the aggregate total determined under subclause (III), yielding a percentage figure for each hospital. (V) The percentage figure determined for each hospital under subclause (IV) shall be applied to the maximum portion of the funds allocated to the particular group under clause (iii) that can be distributed in the particular phase until a hospital in the particular group reaches the limitation set forth in clause (v). (v) For each hospital, no secondary supplemental payment adjustment shall be paid to the extent that either of the following conditions exist: (I) The secondary supplemental payment adjustment would cause the total of all payment adjustments to the hospital under this section relating to the 1995–96 payment adjustment year to exceed the amount that is the product of multiplying 0.95 times the particular hospital’s OBRA 1993 payment limitation for the 1995–96 payment adjustment year, as computed by the department in accordance with applicable provisions of the Medi-Cal State Plan. (II) Without regard to any secondary supplemental payment adjustment, the hospital has already received or has earned payment adjustments relating to the 1995–96 payment adjustment year that equal or exceed the product referred to in subclause (I). (vi) Any secondary supplemental payment adjustment amount, or portion thereof, that otherwise would have been payable to a particular hospital under this paragraph, but that is barred by the limitation described in clause (v), shall be distributed by the department through additional phases of the descending pro rata distribution process to those hospitals within the same group, as set forth in clauses (ii) and (iii), as the particular hospital. For each additional phase, the mathematical steps referred to in subclauses (II) to (V), inclusive, of clause (iv) shall be repeated for those hospitals that have not reached the limitation set forth in clause (v). The phases shall continue until the funds allocated to the particular group under clause (iii) have been fully exhausted. No such distribution, however, shall be in an amount that would cause any hospital to exceed the limitation set forth in clause (v). (C) Notwithstanding any other provision of law, prior to the allocation or distribution of any secondary supplemental payment adjustments, hospitals that, as of July 1, 1995, were part of a county-operated health system of three or more eligible hospitals licensed to the county, shall be deemed to have reached the limitations on total payments described in subclause (II) of clause (v) of subparagraph (B). Data regarding payment adjustments earned by these hospitals with respect to the 1995–96 payment adjustment year, whether paid or payable, shall be included in the computations under subparagraph (A), but excluded from the computations under subparagraph (B). (D) The department shall make payments of the secondary supplemental payment adjustments to hospitals on or before November 30, 1996. (10) The final total amount of per diem payment adjustments paid by the department for the 1995–96 payment adjustment year, plus the final total amount of supplemental lump-sum payment adjustments and secondary supplemental payment adjustments paid by the department for the 1995–96 payment adjustment year, shall be the maximum size of the payment adjustment program for the 1995–96 payment adjustment year. (11) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. In doing so, the department shall comply with any procedures instituted by the Health Care Financing Administration in connection with Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (z) (1) (A) Notwithstanding any other provision of law (except for subparagraph (B)), all Medi-Cal days of acute inpatient hospital service paid by or on behalf of the department that give rise to payment adjustment amounts with respect to the period October 1, 1994, through June 30, 1995, shall be treated as involving 1.4 days for purposes of payment adjustments with respect to this period of time. As a result, each per diem payment adjustment amount otherwise payable to the hospital in connection with these days shall be increased by 40 percent. The Medi-Cal days in question shall be treated as involving 1.4 days toward the maximum limit set forth in paragraph (2) of subdivision (l). The Medi-Cal days in question shall be treated as involving 1.0 days for purposes of determining the hospital’s annualized Medi-Cal inpatient paid days for the next applicable payment adjustment year. (B) For the 1994–95 payment adjustment year, no eligible hospital shall receive total payment adjustments, including per diem payment adjustment amounts and any supplemental lump-sum payment adjustment amounts, in excess of the projected total payment adjustment amounts that were computed or recomputed, as applicable, for the hospital by the department with respect to the 1994–95 payment adjustment year. For each hospital, this maximum figure shall not exceed the sum of the following two components: (i) The final figure computed by the department as the hospital’s total per diem composite amount (including any applicable adjustments under subdivision (p)), multiplied by 80 percent of the hospital’s annualized Medi-Cal inpatient paid days. (ii) The amount calculated by the department as the hospital’s pro rata share (based on the figures for all hospitals computed under clause (i)) of the remainder determined by subtracting (I) the sum of the figures computed for all hospitals under clause (i) from (II) the final maximum state disproportionate share hospital allotment for California under applicable federal rules for the 1995 federal fiscal year. (C) Any payment adjustment amount that otherwise would be payable to a hospital, but that is barred by subparagraph (B), shall be withheld or recouped by the department and distributed on a descending pro rata basis as part of the supplemental lump-sum distribution described in subdivision (w) to those hospitals that have not reached their maximum figures as described in subparagraph (B). (2) (A) Notwithstanding any other provision of law, except for subparagraph (B), all Medi-Cal days of acute inpatient hospital service paid by or on behalf of the department that give rise to payment adjustment amounts with respect to the period October 1, 1995, through June 30, 1996, shall be treated as involving 1.4 days for purposes of payment adjustments with respect to this period of time. As a result, each per diem payment adjustment amount otherwise payable to the hospital in connection with these days shall be increased by 40 percent. The Medi-Cal days in question shall be treated as involving 1.4 days toward the maximum limit set forth in paragraph (2) of subdivision (l). The Medi-Cal days in question shall be treated as involving 1.0 days for purposes of determining the hospital’s annualized Medi-Cal inpatient paid days for the next applicable payment adjustment year. (B) For the 1995–96 payment adjustment year, no eligible hospital shall receive total payment adjustments, including per diem payment adjustment amounts, supplemental lump-sum payment adjustment amounts, and secondary supplemental payment adjustments in excess of the hospital’s OBRA 1993 payment limitation as computed by the department pursuant to the Medi-Cal State Plan. No hospital shall receive secondary supplemental payment adjustments to the extent the payment adjustments would be inconsistent with paragraph (9) of subdivision (y). (C) Any payment adjustment amount that otherwise would be payable to a hospital, but that is barred by subparagraph (B), shall be withheld or recouped by the department and thereafter distributed to other eligible hospitals, refunded to transferors, or otherwise processed in accordance with this section and Section 14163. (3) Notwithstanding any other provision of law, to the extent necessary or appropriate to implement and administer the amendments to this section enacted during the 1994 calendar year, the department may utilize an approach involving interim payments, with reconciliation to final payments within a reasonable time. (aa) (1) For the 1996–97 payment adjustment year, each eligible hospital that remains in operation as of June 30, 1997, shall also be eligible to receive a supplemental lump-sum payment adjustment, that shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date. The availability of supplemental lump-sum payment adjustments under this paragraph shall be determined by the department as follows: (A) The projected total payment adjustment amount for each hospital, as determined by the department at the outset of the payment adjustment year, including any reductions arising from payment limitations under this section, shall be identified. For each hospital, this amount shall be identical to the amount that was used for the same hospital in the calculations made at the outset of the 1996–97 state fiscal year regarding transfer amounts under subdivision (h) of Section 14163 for that fiscal year. (B) The total amount of all per diem payment adjustment amounts under this section, whether paid or payable, that are applicable to the period July 1, 1996, through June 30, 1997, shall be determined for each hospital. The applicability of the per diem payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (C) The amount determined under subparagraph (B) for each hospital shall be subtracted from the amount identified under subparagraph (A) for each hospital. If the remainder is a positive figure for the particular hospital, the supplemental lump-sum payment adjustment for the hospital shall be the positive remainder amount, which shall be payable because the facility is a disproportionate share hospital in operation as of June 30, 1997. (D) The department shall make interim and final payments of the supplemental lump-sum payment adjustments under this paragraph on or before September 30, 1997. (2) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. In doing so, the department shall comply with any procedures instituted by the Health Care Financing Administration in connection with Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (ab) (1) For the 1997–98 payment adjustment year, eligible hospitals that meet the requirements of this subdivision and that remain in operation as of September 30, 1997, shall be eligible to receive a special supplemental payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date. For purposes of federal medicaid rules, including Section 447.297(d) of Title 42 of the Code of Federal Regulations, the special supplemental payment adjustments shall be applicable to the federal fiscal year that ends on September 30, 1997. (2) The availability of special supplemental payment adjustments under this subdivision shall be determined as follows: (A) The final maximum state disproportionate share hospital allotment for California under the provisions of applicable federal medicaid rules shall be identified for the 1997 federal fiscal year. (B) The total amount of all per diem payment adjustment amounts and supplemental payment adjustments under this section (exclusive of any payments under this subdivision) applicable to the 1997 federal fiscal year, whether paid or payable, shall be determined. The applicability of per diem payment adjustment amounts and supplemental payment adjustments of all types to the 1997 federal fiscal year shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (C) The figure determined under subparagraph (B) shall be subtracted from the figure identified under subparagraph (A). If the remainder is a positive figure, special supplemental payment adjustments shall be made under this subdivision in accordance with paragraph (3). The positive remainder shall be the maximum amount of special supplemental payment adjustments under this subdivision. (3) (A) For purposes of these special supplemental payment adjustments, only hospitals that can be categorized into either of the two groups specified in clauses (i) and (ii) shall be eligible to receive the supplemental payment adjustments, and no hospital may qualify for more than one of the two groups. The following groups of hospitals shall be recognized: (i) “Public hospitals,” which shall include all eligible hospitals that, as of July 1, 1997, met the definition of a public hospital. (ii) “Nonpublic hospitals,” which shall include all eligible hospitals that, as of July 1, 1997, met the definition of a nonpublic hospital. (B) The amount determined to be the maximum amount of special supplemental payment adjustments under subparagraph (C) of paragraph (2) shall first be allocated between the two groups of hospitals referred to in subparagraph (A) as follows: (i) “Public hospitals”: 74.885 percent of the maximum amount. (ii) “Nonpublic hospitals”: 25.115 percent of the maximum amount. (C) The amount of funds allocated pursuant to subparagraph (B) to each of the particular groups of hospitals referred to in subparagraphs (A) and (B) shall then be distributed as special supplemental payment adjustments among the eligible hospitals within each particular group as follows: (i) The department shall compute the projected total payment adjustment amounts for all eligible hospitals for the 1997–98 payment adjustment year, exclusive of any payments under this subdivision, subdivision (ad), or subdivision (af), by determining for each eligible hospital its total per diem composite amount and multiplying that figure by the maximum number of the hospital’s Medi-Cal inpatient paid days determined under paragraph (2) of subdivision (l). For purposes of this clause, the determinations shall be without regard to the OBRA 1993 payment limitations. (ii) The amount computed under clause (i) for each hospital described in subparagraph (A) shall be compared to the amount that is the product of multiplying 0.95 times the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the 1997–98 payment adjustment year. (iii) Where the amount computed under clause (i) for the particular hospital is equal to or exceeds the product computed for the hospital under clause (ii), the hospital shall not receive a special supplemental payment adjustment. Data regarding hospitals that have reached this limitation shall not be used for purposes of clauses (v) through (viii). (iv) Where the amount computed under clause (i) for the particular hospital is less than the product computed for the hospital under clause (ii), the amount computed under clause (i) for the hospital shall be used for purposes of clauses (v) through (viii). (v) The figures determined under clause (iv) for each hospital in the particular group shall be added together to determine an aggregate total for each group. (vi) The figures determined for each hospital under clause (iv) shall be divided by the aggregate total determined under clause (v) for the particular group, yielding a percentage figure for each hospital. (vii) The percentage figure determined for each hospital under clause (vi) shall be applied to the maximum portion of the funds allocated to the particular group under subparagraph (B), to determine the hospital’s pro rata share of the special supplemental lump-sum payment adjustments. Except, however, in the case of a nonpublic hospital that, as of July 1, 1997, meets the definition of a children’s hospital, such pro rata share otherwise determined shall be multiplied by a factor of 1.09, yielding a modified pro rata share. The pro rata share for the other nonpublic hospitals shall be reduced accordingly, yielding a modified pro rata share, so that the maximum portion of the funds allocated to the nonpublic hospitals group will not be exceeded. The pro rata share or modified pro rata share, as applicable, for each hospital, as computed under this clause, shall also be used for all purposes relating to descending pro rata distributions under clause (viii). (viii) In no event shall a hospital receive special supplemental payment adjustment amounts in excess of the difference between the product computed for the hospital under clause (ii) and the amount computed for the hospital under clause (i). Any special supplemental payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals within the same group. (D) The department shall make interim and final payments of the special supplemental payment adjustments to hospitals on or before February 28, 1998. (4) The department shall implement this subdivision only if consistent with federal medicaid law and the Medi-Cal State Plan, and only if the department determines that federal financial participation is available. (ac) Notwithstanding any other provision of law, the payment adjustment program with respect to the period October 1, 1997 through June 30, 1998, shall be structured as set forth below and in subdivisions (ad) and (af). However, if the effective date of the Medi-Cal State Plan amendment relating to this subdivision is later than October 1, 1997, as approved by the federal Health Care Financing Administration, all references in this subdivision to the period October 1, 1997, through June 30, 1998, shall be references to the period that commences on that effective date and continues through June 30, 1998. (1) (A) The department shall utilize the computations made pursuant to clause (i) of subparagraph (C) of paragraph (3) of subdivision (ab) of the projected total payment adjustment amounts for all eligible hospitals for the entire 1997–98 payment adjustment year, exclusive of any supplemental payments under subdivision (ab), (ad), or (af). (B) The computed amount referred to in subparagraph (A) for each hospital shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital. (C) Where the computed amount referred to in subparagraph (A) for the particular hospital exceeds the OBRA 1993 payment limitation for the hospital, the amount computed under subparagraph (A) shall be reduced to an amount equal to the OBRA 1993 payment limitation for the particular hospital. The amount so reduced shall be used for purposes of subparagraph (E). (D) Where the computed amount referred to in subparagraph (A) for the particular hospital is equal to or less than the OBRA 1993 payment limitation for the hospital, the computed amount referred to in subparagraph (A) shall be used for purposes of subparagraph (E). (E) The amounts determined under subparagraphs (C) and (D) for all eligible hospitals shall be added together, yielding an aggregate sum. The aggregate sum shall be the unadjusted projected total payment adjustment program for the entire 1997–98 payment adjustment year, exclusive of any supplemental payments under subdivision (ab) or (ad). (2) The initial maximum size of the payment adjustment program for the entire 1997–98 payment adjustment year shall be set at one billion seven hundred fifty million dollars ($1,750,000,000), exclusive of any supplemental payments under subdivision (ab) or (ad). (3) The department shall increase or decrease the amount determined for each eligible hospital under subparagraph (C) or (D) of paragraph (1), as applicable, by multiplying the amount by an identical percentage, yielding the hospital’s tentative adjusted projected total payment adjustment amount for the 1997–98 payment adjustment year. The identical percentage figure to be used for this purpose shall be that percentage that is derived by dividing the amount set forth in paragraph (2) by the aggregate sum determined under subparagraph (E) of paragraph (1). Except, however, the amount determined for a hospital under subparagraph (C) or (D) of paragraph (1) shall not be increased if it would exceed the OBRA 1993 payment limitation for the hospital. (4) The tentative adjusted projected total payment adjustment amount computed for each eligible hospital under paragraph (3) shall be further adjusted as follows: (A) (i) For each eligible hospital that met the definition of a nonpublic-converted hospital as of July 1, 1997, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic-converted hospital adjustment factor.” The applicable adjustment factor shall be that which is necessary to result in an amount, for each hospital, equal to the amount used for the particular hospital under subparagraph (E) of paragraph (1). The amount so adjusted shall be used for purposes of clause (iii). (ii) The total amount of all per diem payment adjustment amounts under this section, whether paid or payable, applicable to the period July 1, 1997, through September 30, 1997, shall be determined for each hospital referred to in clause (i). The applicability of the per diem payment adjustment amounts to the period July 1, 1997, through September 30, 1997, shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. However, if the effective date of the Medi-Cal State Plan amendment relating to this subdivision is later than October 1, 1997, as approved by the federal Health Care Financing Administration, all determinations under this clause shall include per diem payment adjustment amounts applicable to the period July 1, 1997, through the date that is one day prior to that effective date. (iii) The amount determined for each hospital under clause (i) shall be reduced by the amount determined under clause (ii) for the hospital. The resulting figure shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 1997, through June 30, 1998, which shall be paid to the hospital in accordance with paragraph (5). (B) (i) For each eligible hospital that met the definition of a nonpublic hospital as of July 1, 1997, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic hospital adjustment factor.” The applicable adjustment factor shall be derived as follows: (I) The tentative adjusted projected total payment adjustment amounts determined under paragraph (3) for each nonpublic hospital described above shall be added together. (II) The amount identified in paragraph (2) shall be divided by 2.38. The resulting figure shall then be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clauses (ii) and (iii) of subparagraph (A). (III) The amount computed under subclause (II) shall be divided by 2, and the result thereof further reduced by the amount of thirty-seven million five hundred thousand dollars ($37,500,000). (IV) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (III) by the amount derived in subclause (I). (ii) The total amount of all per diem payment adjustment amounts under this section, whether paid or payable, applicable to the period July 1, 1997, through September 30, 1997, shall be determined for each hospital referred to in clause (i). The applicability of the per diem payment adjustment amounts to the period July 1, 1997, through September 30, 1997, shall be determined in accordance with federal medicaid rules including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. However, if the effective date of the Medi-Cal State Plan amendment relating to this subdivision is later than October 1, 1997, as approved by the federal Health Care Financing Administration, all determinations under this clause shall include per diem payment adjustment amounts applicable to the period July 1, 1997, through the date that is one day prior to that effective date. (iii) The amount determined for each hospital under clause (i) shall be reduced by the amount determined under clause (ii) for the hospital. The resulting figure shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 1997, through June 30, 1998, which shall be paid to the hospital in accordance with paragraph (5). (C) (i) For each eligible hospital that met the definition of a public hospital as of July 1, 1997, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “public hospital adjustment factor.” The applicable adjustment factor shall be derived as follows: (I) The tentative adjusted projected total payment adjustment amounts determined under paragraph (3) for each public hospital described above shall be added together. (II) The amount identified in paragraph (2) shall be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clauses (ii) and (iii) of subparagraph (A) and the sum of the amounts determined for all nonpublic hospitals under clauses (ii) and (iii) of subparagraph (B). (III) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (II) by the amount derived in subclause (I). (ii) The total amount of all per diem payment adjustment amounts under this section, whether paid or payable, applicable to the period July 1, 1997, through September 30, 1997, shall be determined for each hospital referred to in clause (i). The applicability of the per diem payment adjustment amounts to the period July 1, 1997, through September 30, 1997, shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. However, if the effective date of the Medi-Cal State Plan amendment relating to this subdivision is later than October 1, 1997, as approved by the federal Health Care Financing Administration, all determinations under this clause shall include per diem payment adjustment amounts applicable to the period July 1, 1997, through the date that is one day prior to that effective date. (iii) The amount determined for each hospital under clause (i) shall be reduced by the amount determined under clause (ii) for the hospital. The resulting figure shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 1997, through June 30, 1998, which shall be paid to the hospital in accordance with paragraph (5). (5) The final adjusted projected total payment adjustment amount determined for each eligible hospital for the period October 1, 1997, through June 30, 1998, shall be distributed in 16 or fewer equal installments to be paid no later than the 10th and 25th day of each month during the period that commences on the effective date of the Medi-Cal State Plan amendment relating to this subdivision, as approved by the federal Health Care Financing Administration, and continues through May 25, 1998. (6) Notwithstanding any other provision of law, for the entire 1997–98 payment adjustment year, no eligible hospital shall receive total payment adjustments, including per diem payment adjustments, payments under this subdivision, and any supplemental payments under subdivision (ab) or (ad), in excess of the hospital’s OBRA 1993 payment limitation as computed by the department pursuant to the Medi-Cal State Plan. No hospital shall receive any special supplemental payment adjustments or supplemental lump-sum payment adjustments to the extent the payments would be inconsistent with subdivision (ab) or (ad), respectively. (7) The aggregate sum of the final adjusted projected total payment adjustment amounts computed under paragraph (4) for each eligible hospital for the period October 1, 1997, through June 30, 1998, plus the aggregate sum of the amounts determined for each eligible hospital under clause (ii) of subparagraph (A) of paragraph (4), clause (ii) of subparagraph (B) of paragraph (4) and clause (ii) of subparagraph (C) of paragraph (4), shall be the maximum size of the payment adjustment program for the entire 1997–98 payment adjustment year, exclusive of the special supplemental payment adjustments provided for under subdivision (ab) and the supplemental lump-sum payment adjustments provided for under subdivision (ad). (8) The department shall implement this subdivision only if consistent with federal medicaid law and the Medi-Cal State Plan, and only if the department determines that federal financial participation is available. (ad) (1) For the 1997–98 payment adjustment year, eligible hospitals that meet the requirements of this subdivision and that remain in operation as of June 30, 1998, shall be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date, but only if the hospital has remained in operation for the period October 1, 1997, to June 30, 1998, inclusive. (2) The amount of supplemental lump-sum payment adjustments available to hospitals under this subdivision shall be four hundred five million dollars ($405,000,000). (3) (A) For purposes of these supplemental lump-sum payment adjustments, only hospitals that can be categorized into either of the two groups specified in clauses (i) and (ii) shall be eligible to receive the supplemental payment adjustments, and no hospital may qualify for more than one of the two groups. The following groups of hospitals shall be recognized: (i) “Public hospitals,” which shall include all eligible hospitals that, as of July 1, 1997, met the definition of a public hospital. (ii) “Nonpublic hospitals,” which shall include all eligible hospitals that, as of July 1, 1997, met the definition of a nonpublic hospital. (B) The amount of supplemental lump-sum payment adjustments as referred to in paragraph (2) shall first be allocated between the two groups of hospitals referred to in subparagraph (A) as follows: (i) “Public hospitals”: 72.17 percent of the amount. (ii) “Nonpublic hospitals”: 27.83 percent of the amount. (C) The amount of funds allocated pursuant to subparagraph (B) to each of the particular groups of hospitals referred to in subparagraphs (A) and (B) shall then be distributed as supplemental lump-sum payment adjustments among the eligible hospitals within each particular group as follows: (i) The department shall identify for each eligible hospital the total amount of payment adjustments under this section (exclusive of any payments under this subdivision and subdivision (af)) applicable to the 1997–98 payment adjustment year, whether paid or payable. The applicability of the payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (ii) The amount identified for each hospital under clause (i) shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the 1997–98 payment adjustment year. (iii) Where the amount computed under clause (i) for the particular hospital is equal to or exceeds the OBRA 1993 payment limitation for the hospital, the hospital shall not receive a supplemental lump-sum payment adjustment. Data regarding hospitals that have reached this limitation shall not be used for purposes of clauses (v) through (viii). (iv) Where the amount computed under clause (i) for the particular hospital is less than the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) minus that amount paid or payable to the hospital under subdivision (ab) shall be used for purposes of clauses (v) through (viii). (v) The figures determined under clause (iv) for each hospital in the particular group shall be added together to determine an aggregate total for each group. (vi) The figures determined for each hospital under clause (iv) shall be divided by the aggregate total determined under clause (v) for the particular group, yielding a percentage figure for each hospital. (vii) The percentage figure determined for each hospital under clause (vi) shall be applied to the maximum portion of the funds allocated to the particular group under subparagraph (B), to determine the hospital’s pro rata share of the supplemental lump-sum payment adjustments. Except, however, in the case of a nonpublic hospital that, as of July 1, 1997, meets the definition of a children’s hospital, the pro rata share otherwise determined shall be multiplied by a factor of 1.09, yielding a modified pro rata share. The pro rata share for the other nonpublic hospitals shall be reduced accordingly, yielding a modified pro rata share, so that the maximum portion of the funds allocated to the nonpublic hospitals group will not be exceeded. The pro rata share or modified pro rata share, as applicable, for each hospital, as computed under this clause, shall also be used for all purposes relating to descending pro rata distributions under clause (viii). (viii) In no event shall a hospital receive supplemental lump-sum payment adjustment amounts in excess of the difference between the OBRA 1993 payment limitation for the hospital and the amount computed for the hospital under clause (i). Any supplemental lump-sum payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals within the same group. (D) The department shall make interim and final payments of the supplemental lump-sum payment adjustments to hospitals on or before August 15, 1998. (4) The department shall implement this subdivision only if consistent with federal medicaid law and the Medi-Cal State Plan, and only if the department determines that federal financial participation is available. (5) Notwithstanding any other provision of law, the payment adjustments, data, and related aspects of subdivision (af) shall not be taken into account for any purpose under this subdivision, subdivision (ab), or subdivision (ac). (ae) (1) In the event that any provision of subdivision (ab), (ac), or (ad), as reflected in a proposed Medi-Cal State Plan amendment, is not approved by the federal Health Care Financing Administration, the director shall modify the proposed Medi-Cal State Plan amendment in a manner intended to be consistent with all applicable federal requirements. Subject to the requirements of federal law, in developing the modified proposed Medi-Cal State Plan amendment, the director shall, to the extent practicable, incorporate, implement, and modify, as necessary, the payment methodologies applicable to the 1997–98 payment adjustment year in a manner that is as consistent as possible with the approach and intent of subdivisions (ab), (ac), and (ad), respectively. (2) In the event that any provision of subdivision (af), (ag), (ah), (ai), or (aj), as reflected in a proposed Medi-Cal State Plan amendment, is not approved by the federal Health Care Financing Administration, the director shall modify that proposed Medi-Cal State Plan amendment in a manner intended to be consistent with all applicable federal requirements. Subject to the requirements of federal law, in developing the modified proposed Medi-Cal State Plan amendment, the director shall, to the extent practicable, incorporate, implement, and modify, as necessary, the payment methodologies applicable to the 1997–98, 1998–99, and 1999–2000 payment adjustment years in a manner that is as consistent as possible with the approach and intent of subdivisions (af), (ag), (ah), (ai), and (aj), respectively. (3) In the event that any provision of subdivision (ak), (al), (am), or (an), as reflected in a proposed Medi-Cal State Plan amendment, is not approved by the federal Health Care Financing Administration, the director shall modify that proposed Medi-Cal State Plan amendment in a manner intended to be consistent with all applicable federal requirements. Subject to the requirements of federal law, in developing the modified proposed Medi-Cal State Plan amendment, the director shall, to the extent practicable, and after consulting with representatives of the hospital industry, including, but not limited to, the California Healthcare Association, incorporate, implement, and modify, as necessary, the payment methodologies applicable to the 2000–01 payment adjustment year and subsequent payment adjustment years in a manner that is as consistent as possible with the approach and intent of subdivisions (ak), (al), (am), and (an), respectively. (af) (1) The provisions of this subdivision shall apply for the 1997–98 payment adjustment year, and, for all purposes under the program, shall be implemented subsequent to the provisions of subdivisions (ab), (ac), and (ad). Under this subdivision, eligible hospitals that, as of October 1, 1997, were part of a county-operated health system of three or more eligible hospitals licensed to the county, and that are in operation as of June 30, 1998, shall be eligible to receive an additional supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date, but only if the hospital has remained in operation for the period October 1, 1997, through June 30, 1998. (2) The maximum amount of additional supplemental lump-sum payment adjustments under this subdivision shall be one hundred sixty-six million dollars ($166,000,000). (3) The maximum amount of funds specified under paragraph (2) shall be distributed as additional supplemental lump-sum payment adjustments among the hospitals eligible under this subdivision as follows: (A) The department shall identify for each eligible hospital the total amount of payment adjustments under this section (exclusive of any payments under this subdivision) applicable to the 1997–98 payment adjustment year, whether paid or payable. The applicability of the payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (B) The amount identified for each hospital under subparagraph (A) shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the 1997–98 payment adjustment year. (C) Where the amount computed under subparagraph (A) for the particular hospital is equal to or exceeds the OBRA 1993 payment limitation for the hospital, the hospital shall not receive an additional supplemental lump-sum payment adjustment. Data regarding hospitals that have reached this limitation shall not be used for purposes of subparagraphs (E) through (H). (D) Where the amount computed under subparagraph (A) for the particular hospital is less than the OBRA 1993 payment limitation for the hospital, the amount computed under subparagraph (A) shall be used for purposes of subparagraphs (E) through (H). (E) The figures determined under subparagraph (D) for each hospital eligible to receive additional supplemental lump-sum payment adjustments under this subdivision shall be added together to determine an aggregate total. (F) The figures determined for each hospital under subparagraph (D) shall be divided by the aggregate total determined under subparagraph (E), yielding a percentage figure for each hospital. (G) The percentage figure determined for each hospital under subparagraph (F) shall be applied to the maximum amount specified in paragraph (2), to determine the hospital’s pro rata share of the additional supplemental lump-sum payment adjustments. (H) In no event shall a hospital receive additional supplemental lump-sum payment adjustment amounts in excess of the difference between the OBRA 1993 payment limitation for the hospital and the amount computed for the hospital under subparagraph (A). Any additional supplemental lump-sum payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals eligible for distributions under this subdivision that have not reached their OBRA 1993 payment limitation. (4) The department shall make interim and final payments of the additional supplemental lump-sum payment adjustments to hospitals on or before August 15, 1998. (5) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. (ag) Notwithstanding any other provision of law, the payment adjustment program for the 1998–99 payment adjustment year shall be structured as set forth below and in subdivision (ah). (1) (A) The department shall compute the projected total payment adjustment amounts for all eligible hospitals for the 1998–99 payment adjustment year by determining for each eligible hospital its total per diem composite amount and multiplying that figure by the maximum number of the hospital’s Medi-Cal inpatient paid days determined under paragraph (2) of subdivision (l). For purposes of this subparagraph, these determinations shall be without regard to the OBRA 1993 payment limitations. With respect to a public hospital that, as of July 1, 1998, is part of a county-operated health system of three or more eligible hospitals licensed to the county, the projected total payment adjustment amount shall be reduced by an amount equal to the amount paid or payable to the hospital under subdivision (af). (B) The computed amount referred to in subparagraph (A) for each hospital shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital. (C) Where the computed amount referred to in subparagraph (A) for the particular hospital exceeds the OBRA 1993 payment limitation for the hospital, the amount computed under subparagraph (A) shall be reduced to an amount equal to the OBRA 1993 payment limitation for the particular hospital. The amount so reduced shall be used for purposes of subparagraph (E). Except, however, with respect to a public hospital that, as of July 1, 1998, is part of a county-operated health system of three or more eligible hospitals licensed to the county, the amount as so reduced shall be increased by an amount equal to the amount paid or payable to the hospital under subdivision (af), and used for purposes of subparagraph (E). (D) Where the computed amount referred to in subparagraph (A) for the particular hospital is equal to or less than the OBRA 1993 payment limitation for the hospital, the computed amount referred to in subparagraph (A) shall be used for purposes of subparagraph (E). Except, however, with respect to a public hospital that, as of July 1, 1998, is part of a county-operated health system of three or more eligible hospitals licensed to the county, the computed amount shall be increased by an amount equal to the amount paid or payable to the hospital under subdivision (af), and used for purposes of subparagraph (E). (E) The amounts determined under subparagraphs (C) and (D) for all eligible hospitals shall be added together, yielding an aggregate sum. The aggregate sum shall be the unadjusted projected total payment adjustment program for the 1998–99 payment adjustment year, exclusive of any supplemental payment adjustments under subdivision (ah). (2) The initial maximum size of the payment adjustment program for the 1998–99 payment adjustment program shall be set at one billion seven hundred fifty million dollars ($1,750,000,000), exclusive of any supplemental payment adjustments under subdivision (ah). (3) (A) The department shall increase or decrease the amount determined for each eligible hospital under subparagraph (C) or (D) of paragraph (1), as applicable, by multiplying the amount by an identical percentage, yielding the hospital’s tentative adjusted projected total payment adjustment amount for the 1998–99 payment adjustment year. The identical percentage figure to be used for this purpose shall be that percentage that is derived by dividing the amount set forth in paragraph (2) by the aggregate sum determined under subparagraph (E) of paragraph (1). Except, however, the amount determined for a hospital under subparagraph (C) or (D) of paragraph (1), as applicable, shall not be increased so that it would exceed the OBRA 1993 payment limitation for the hospital, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the tentative adjusted projected total payment adjustment amounts for all hospitals equals the amount set forth in paragraph (2). (B) (i) With respect to a public hospital that, as of July 1, 1998, is part of a county-operated health system of three or more eligible hospitals licensed to the county, the amount determined under subparagraph (C) or (D) of paragraph (1), as applicable, shall be reduced by an amount equal to the amount paid or payable to the hospital under subdivision (af), prior to applying the OBRA 1993 payment limitation under subparagraph (A). (ii) Notwithstanding clause (i), all other computations under subparagraph (A), including the determination of the hospital’s pro rata share of any reallocations, shall be made as though the reduction described in clause (i) had not occurred. (4) The tentative adjusted projected total payment adjustment amount computed for each eligible hospital under paragraph (3) shall be further adjusted as follows: (A) (i) For each eligible hospital that meets the definition of a nonpublic-converted hospital as of July 1, 1998, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic-converted hospital adjustment factor.” The applicable adjustment factor shall be that which is necessary to result for each such hospital in an amount equal to the amount used for the particular hospital under subparagraph (E) of paragraph (1). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the 1998–99 payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5). (B) (i) For each eligible hospital that meets the definition of a converted hospital as of July 1, 1998, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “converted hospital adjustment factor.” The applicable adjustment factor shall be that which is necessary to result for each such hospital in an amount equal to: (I) the maximum number of the hospital’s annualized Medi-Cal inpatient paid days determined under paragraph (2) of subdivision (l); multiplied by (II) the total per diem composite amount determined for the hospital, the calculation of the per diem composite amount being restricted by a maximum low-income number of 40 percent for the hospital, regardless if the hospital’s low-income number would otherwise be higher. In no case shall the product of this calculation exceed the amount used for the particular hospital under subparagraph (E) of paragraph (1). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the 1998–99 payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5). (C) (i) For each eligible hospital that meets the definition of a nonpublic hospital as of July 1, 1998, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic hospital adjustment factor.” The applicable adjustment factor shall be derived as follows: (I) The tentative adjusted projected total payment adjustment amounts determined under paragraph (3) for each nonpublic hospital described above shall be added together. (II) The amount identified in paragraph (2) shall be divided by 2.347. The resulting figure shall then be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A) and the amounts determined for all converted hospitals under clause (ii) of subparagraph (B). (III) The amount computed under subclause (II) shall be divided by 2, and the result thereof further reduced by the amount of thirty-seven million five hundred thousand dollars ($37,500,000). (IV) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (III) by the amount derived in subclause (I). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the 1998–99 payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5). Except, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other nonpublic hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all nonpublic hospitals equals the amount derived in subclause (III) of clause (i). (D) (i) For each eligible hospital that meets the definition of a public hospital as of July 1, 1998, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “public hospital adjustment factor.” The applicable adjustment factor shall be derived as follows: (I) The tentative adjusted projected total payment adjustment amounts determined under paragraph (3) for each public hospital described above shall be added together. (II) The amount identified in paragraph (2) shall be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A), the amounts determined for all converted hospitals under clause (ii) of subparagraph (B) and the amounts determined for all nonpublic hospitals under clause (ii) of subparagraph (C). (III) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (II) by the amount derived in subclause (I). (ii) The product determined for each hospital under clause (i) shall be further adjusted as follows: (I) The product shall be reduced as necessary so as not to exceed the hospital’s OBRA 1993 payment limitation. (II) With respect to a public hospital that, as of July 1, 1998, is part of a county-operated health system of three or more eligible hospitals licensed to the county, the product shall, prior to the application of subclause (I), be reduced by an amount equal to the amount paid or payable to the hospital under subdivision (af). (III) Any amounts that would otherwise have been allocated to a hospital but for the hospital’s OBRA 1993 payment limitation as applied under subclause (I) shall be reallocated to all other public hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis. With respect to a public hospital described in subclause (II), the hospital’s pro rata share of any reallocated amounts shall be based on the product derived for the hospital under clause (i). (IV) The amount determined for each hospital pursuant to subclause (I) and subclause (II), as applicable (including the reduction under subclause (II)), plus any reallocations to the hospital under subclause (III), shall be the final adjusted projected total payment adjustment amount for the hospital for the 1998–99 payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5). (5) The final adjusted projected total payment adjustment amount determined for each eligible hospital for the 1998–99 payment adjustment year shall be distributed as set forth below. (A) With respect to the period July 1, 1998, through September 30, 1998, payment adjustment amounts shall be payable only to those eligible hospitals that, as of July 1, 1998, were not part of a county-operated health system of three or more eligible hospitals licensed to the county. (i) The maximum amount of payment adjustments payable to eligible hospitals under this paragraph for the period of July 1, 1998, through September 30, 1998, shall be determined as follows: (I) The maximum state disproportionate share hospitals allotment for California under the provisions of applicable federal medicaid rules shall be identified for the 1998 federal fiscal year. This maximum allotment is two billion one hundred seventeen million eight hundred ninety-nine thousand six hundred sixty-eight dollars ($2,117,899,668). (II) The total amount of all payment adjustments under this section (exclusive of any payments under this subparagraph) applicable to the 1998 federal fiscal year, whether paid or payable, shall be determined. The applicability of payment adjustment amounts to the 1998 federal fiscal year shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (III) The figure determined under subclause (II) shall be subtracted from the figure identified under subclause (I). The positive remainder shall be the maximum amount of payment adjustments payable with respect to the period July 1, 1998, through September 30, 1998, under this subparagraph. (ii) With respect to an eligible hospital that, as of July 1, 1998, meets the definition of a nonpublic-converted hospital, the maximum amount payable for the period July 1, 1998, through September 30, 1998, shall be equal to the product of the final adjusted projected total payment adjustment amount determined for the hospital pursuant to paragraph (4), multiplied by a fraction that is computed as follows: (I) The maximum amount derived in subclause (III) of clause (i) shall be increased by an amount equal to the total amount of payment adjustments paid or payable under subdivision (af). (II) The figure derived in subclause (I) shall be divided by the amount specified in paragraph (2). (iii) With respect to an eligible hospital that, as of July 1, 1998, meets the definition of a converted hospital, the maximum amount payable for the period July 1, 1998, through September 30, 1998, shall be equal to the product of the final adjusted projected total payment adjustment amount determined for the hospital pursuant to paragraph (4), multiplied by a fraction that is computed as follows: (I) The maximum amount derived in subclause (III) of clause (i) shall be increased by an amount equal to the total amount of payment adjustments paid or payable under subdivision (af). (II) The figure derived in subclause (I) shall be divided by the amount specified in paragraph (2). (iv) With respect to an eligible hospital that, as of July 1, 1998, meets the definition of a nonpublic hospital, the maximum amount payable for the period July 1, 1998, through September 30, 1998, shall be equal to the product of the final adjusted projected total payment adjustment amount determined for the hospital pursuant to paragraph (4), multiplied by a fraction that is computed as follows: (I) The maximum amount derived in subclause (III) of clause (i) shall be increased by an amount equal to the total amount of payment adjustments paid or payable under subdivision (af). (II) The figure derived in subclause (I) shall be divided by the amount specified in paragraph (2). (v) With respect to an eligible hospital that, as of July 1, 1998, meets the definition of a public hospital, the maximum amount payable for the period July 1, 1998, through September 30, 1998, shall be equal to the product of the final adjusted projected total payment adjustment amount determined for the hospital pursuant to paragraph (4), multiplied by a fraction that is computed as follows: (I) The maximum amount derived in subclause (III) of clause (i) shall be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clause (ii), the amounts determined for all converted hospitals under clause (iii) and the amounts determined for all nonpublic hospitals under clause (iv). (II) The amounts computed under paragraph (4) with respect to all public hospitals that are subject to this subparagraph (A) shall be added together, yielding an aggregate sum. (III) The figure derived in subclause (I) shall be divided by the aggregate sum derived in subclause (II). (vi) The resulting product determined for each hospital pursuant to clauses (ii) through (v), as applicable, shall be distributed to the hospital in three equal installments, each payable as of the last day of each month from July 1998 through September 1998. However, no hospital shall receive an installment for any month in which the hospital does not remain in operation for the entire month. To the extent that any hospital is not entitled to receive an installment that otherwise would be payable but for the hospital’s failure to remain in operation through the last day of a particular month, the amount that would have been paid to the hospital shall be redistributed among those hospitals within the same hospital group (as those groups are described in clauses (ii) through (v)) that remain in operation from July 1, 1998, through September 30, 1998, to be distributed on a pro rata basis. The redistributed amounts shall be payable as of September 30, 1998. (B) (i) With respect to the period October 1, 1998, through June 30, 1999, payment adjustment amounts shall be payable to each eligible hospital in the amount equal to the final adjusted projected total payment adjustment amount determined for the hospital pursuant to paragraph (4), less any payment adjustments paid or payable to the hospital, or payment adjustments that would have been payable but for the hospital’s failure to remain in operation for a particular month, under subparagraph (A). The payment adjustments shall be distributed in eight equal amounts, each payable as of the last day of each month from October 1998 through May 1999. However, no hospital shall receive an installment for any month in which the hospital does not remain in operation for the entire month. (ii) To the extent that any hospital of either of the hospital types described in clause (iv) or (v) of subparagraph (A) is not entitled to receive an installment that otherwise would be payable but for the hospital’s failure to remain in operation through the last day of a particular month, the amount that would have been paid to the hospital shall be redistributed among those hospitals of the same hospital type that remain in operation from October 1, 1998, through June 30, 1999, to be distributed on a pro rata basis. The redistributed amounts shall be payable as of June 30, 1999. (iii) With respect to a public hospital that, as of July 1, 1998, is part of a county-operated health system of three or more eligible hospitals licensed to the county, the hospital’s pro rata share of any reallocations under clause (ii) shall be based on the final adjusted projected total payment adjustment amount determined for the hospital pursuant to paragraph (4), as increased by an amount equal to the amount paid or payable to the hospital under subdivision (af). (6) Notwithstanding any other provision of law, for the 1998–99 payment adjustment year, no eligible hospital shall receive total payment adjustments in excess of the hospital’s OBRA 1993 payment limitation as computed by the department pursuant to the Medi-Cal State Plan. (7) The aggregate sum of the final adjusted projected total payment adjustment amounts computed under paragraph (4) for each eligible hospital shall be the maximum size of the payment adjustment program for the 1998–99 payment adjustment year, exclusive of the supplemental payment adjustments provided for under subdivision (ah). (8) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. (ah) (1) For the 1998–99 payment adjustment year, eligible hospitals that meet the requirements of this subdivision and that are in operation as of June 30, 1999, shall be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date, but only if the hospital has remained in operation for the period October 1, 1998, through June 30, 1999. (2) The availability of supplemental lump-sum payment adjustments under this subdivision shall be determined as follows: (A) The maximum state disproportionate share hospital allotment for California under the provisions of applicable federal medicaid rules shall be identified for the 1999 federal fiscal year. It is estimated that this amount will be two billion seventy-one million seven hundred seventy-four thousand nine hundred seventy-six dollars ($2,071,774,976). (B) The total amount of all payment adjustment amounts under this section (exclusive of any payments under this subdivision) applicable to the 1999 federal fiscal year, whether paid or payable, shall be determined. The applicability of payment adjustment amounts to the 1999 federal fiscal year shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (C) The figure determined under subparagraph (B) shall be subtracted from the figure identified under subparagraph (A). If the remainder is a positive figure, supplemental lump-sum payment adjustments shall be made under this subdivision in accordance with paragraph (3). The positive remainder shall be the maximum amount of supplemental lump-sum payment adjustments under this subdivision. (3) (A) For purposes of supplemental lump-sum payment adjustments under this subdivision, only hospitals that can be categorized into either of the two groups specified in clauses (i) and (ii) below shall be eligible to receive the supplemental payment adjustments, and no hospital may qualify for more than one of the two groups. The following groups of hospitals shall be recognized: (i) “Public hospitals,” which shall include all eligible hospitals that, as of July 1, 1998, met the definition of a public hospital. (ii) “Nonpublic hospitals,” which shall include all eligible hospitals that, as of July 1, 1998, met the definition of a nonpublic hospital. (B) The amount determined to be the maximum amount of supplemental lump-sum payment adjustments under subparagraph (C) of paragraph (2) shall first be allocated between the two groups of hospitals referred to in subparagraph (A) as follows: (i) “Public hospitals”: 72.78 percent of the maximum amount. (ii) “Nonpublic hospitals”: 27.22 percent of the maximum amount. (C) The amount of funds allocated pursuant to subparagraph (B) to each of the particular groups of hospitals referred to in subparagraphs (A) and (B) shall then be distributed as supplemental lump-sum payment adjustments among the eligible hospitals within each particular group as follows: (i) The department shall identify for each eligible hospital the total amount of payment adjustments under this section (exclusive of any payments under this subdivision) applicable to the 1998–99 payment adjustment year, whether paid or payable. The applicability of the payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (ii) The amount identified for each hospital under clause (i) shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the 1998–99 payment adjustment year. (iii) Where the amount computed under clause (i) for the particular hospital is equal to or exceeds the OBRA 1993 payment limitation for the hospital, the hospital shall not receive a supplemental lump-sum payment adjustment. Data regarding hospitals that have reached this limitation shall not be used for purposes of clauses (v) through (viii). (iv) Where the amount computed under clause (i) for the particular hospital is less than the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) shall be used for purposes of clauses (v) through (viii). Except, however, with respect to a public hospital that, as of July 1, 1998, was part of a county-operated health system of three or more eligible hospitals licensed to the county, the amount computed under clause (i) plus the amounts paid or payable to the hospital pursuant to subdivision (af) shall be used for purposes of clauses (v) through (vii), while the amount computed under clause (i) only shall be used for purposes of applying the limitation described in clause (viii). (v) The figures determined under clause (iv) for each hospital in the particular group shall be added together to determine an aggregate total for each group. (vi) The figures determined for each hospital under clause (iv) shall be divided by the aggregate total determined under clause (v) for the particular group, yielding a percentage figure for each hospital. (vii) The percentage figure determined for each hospital under clause (vi) shall be applied to the maximum portion of the funds allocated to the particular group under subparagraph (B), to determine the hospital’s pro rata share of the supplemental lump-sum payment adjustments. Except, however, in the case of a nonpublic hospital that, as of July 1, 1998, met the definition of a children’s hospital, the pro rata share otherwise determined shall be multiplied by a factor of 1.09, yielding a modified pro rata share. The pro rata share for the other nonpublic hospitals shall be reduced accordingly, yielding a modified pro rata share, so that the maximum portion of the funds allocated to the nonpublic hospitals group will not be exceeded. The pro rata share or modified pro rata share, as applicable, for each hospital, as computed under this clause, shall also be used for all purposes relating to descending pro rata distributions under clause (viii). (viii) In no event shall a hospital receive supplemental lump-sum payment adjustment amounts in excess of the difference between the OBRA 1993 payment limitation for the hospital and the amount computed for the hospital under clause (i). Any supplemental lump-sum payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals within the same group. (D) The department shall make interim and final payments of the supplemental lump-sum payment adjustments to hospitals on or before August 15, 1999. (4) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. (ai) Notwithstanding any other provision of law, no payment adjustment amounts shall be payable in connection with the period of July 1 through September 30 of the 1999–2000 payment adjustment year. The payment adjustment program with respect to the period October 1, 1999, through June 30, 2000, shall be structured as set forth below and in subdivision (aj). (1) (A) The department shall compute the projected total payment adjustment amounts for all eligible hospitals for the 1999–2000 payment adjustment year, by determining for each eligible hospital its total per diem composite amount and multiplying that figure by the maximum number of the hospital’s Medi-Cal inpatient paid days determined under paragraph (2) of subdivision (l). For purposes of this subparagraph, these determinations shall be without regard to the OBRA 1993 payment limitations. (B) The computed amount referred to in subparagraph (A) for each hospital shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital. (C) Where the computed amount referred to in subparagraph (A) for the particular hospital exceeds the OBRA 1993 payment limitation for the hospital, the amount computed under subparagraph (A) shall be reduced to an amount equal to the OBRA 1993 payment limitation for the particular hospital. The amount so reduced shall be used for purposes of subparagraph (E). (D) Where the computed amount referred to in subparagraph (A) for the particular hospital is equal to or less than the OBRA 1993 payment limitation for the hospital, the computed amount referred to in subparagraph (A) shall be used for purposes of subparagraph (E). (E) The amounts determined under subparagraphs (C) and (D) for all eligible hospitals shall be added together, yielding an aggregate sum. The aggregate sum shall be the unadjusted projected total payment adjustment program for the period of October 1, 1999, through June 30, 2000, exclusive of any supplemental payment adjustments under subdivision (aj). (2) The initial maximum size of the payment adjustment program for the period October 1, 1999, through June 30, 2000, shall be set at one billion seven hundred fifty million dollars ($1,750,000,000), exclusive of any supplemental payment adjustments under subdivision (aj). (3) The department shall increase or decrease the amount determined for each eligible hospital under subparagraph (C) or (D) of paragraph (1), as applicable, by multiplying the amount by an identical percentage, yielding the hospital’s tentative adjusted projected total payment adjustment amount for the period October 1, 1999, through June 30, 2000. The identical percentage figure to be used for this purpose shall be that percentage that is derived by dividing the amount set forth in paragraph (2) by the aggregate sum determined under subparagraph (E) of paragraph (1). Except, however, the amount determined for a hospital under subparagraphs (C) or (D) of paragraph (1) shall not be increased so that it would exceed the OBRA 1993 payment limitation for the hospital, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the tentative adjusted projected total payment adjustment amount for all hospitals equals the amount set forth in paragraph (2). (4) The tentative adjusted projected total payment adjustment amount computed for each eligible hospital under paragraph (3) shall be further adjusted as follows: (A) (i) For each eligible hospital that meets the definition of a nonpublic-converted hospital as of July 1, 1999, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic-converted hospital adjustment factor.” The applicable adjustment factor shall be that which is necessary to result in an amount for each such hospital equal to the amount used for the particular hospital under subparagraph (E) of paragraph (1). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 1999, through June 30, 2000, which shall be paid to the hospital in accordance with paragraph (5). (B) (i) For each eligible hospital that meets the definition of a converted hospital as of July 1, 1999, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “converted hospital adjustment factor.” The applicable adjustment factor shall be that which is necessary to result for each such hospital in an amount equal to: (I) the maximum number of the hospital’s annualized Medi-Cal inpatient paid days determined under paragraph (2) of subdivision (l); multiplied by (II) the total per diem composite amount determined for the hospital, the calculation of the per diem composite amount being restricted by a maximum low-income number of 40 percent for the hospital, regardless if the hospital’s low-income number would otherwise be higher. In no case shall the product of this calculation exceed the amount used for the particular hospital under subparagraph (E) of paragraph (1). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 1999, through June 30, 2000, which shall be paid to the hospital in accordance with paragraph (5). (C) (i) For each eligible hospital that meets the definition of a nonpublic hospital as of July 1, 1999, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic hospital adjustment factor.” The applicable adjustment factor shall be derived as follows: (I) The tentative adjusted projected total payment adjustment amounts determined under paragraph (3) for each nonpublic hospital shall be added together. (II) The amount identified in paragraph (2) shall be divided by 2.130. The resulting figure shall then be reduced by the sums of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A) and all converted hospitals under clause (ii) of subparagraph (B). (III) The amount computed under subclause (II) shall be divided by 2, and the result thereof further reduced by the amount of thirty-seven million five hundred thousand dollars ($37,500,000). (IV) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (III) by the amount derived in subclause (I). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 1999, through June 30, 2000, which shall be paid to the hospital in accordance with paragraph (5). Except, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other nonpublic hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all nonpublic hospitals equals the amount derived in subclause (III) of clause (i). (D) (i) For each eligible hospital that meets the definition of a public hospital as of July 1, 1999, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “public hospital adjustment factor.” The applicable adjustment factor shall be derived as follows: (I) The tentative adjusted projected total payment adjustment amounts determined under paragraph (3) for each public hospital described above shall be added together. (II) The amount identified in paragraph (2) shall be reduced by the sums of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A) and all converted hospitals under clause (ii) of subparagraph (B), and the sum of the amounts determined for all nonpublic hospitals under clause (ii) of subparagraph (C). (III) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (II) by the amount derived in subclause (I). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 1999, through June 30, 2000, which shall be paid to the hospital in accordance with paragraph (5). Except, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other public hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all public hospitals equals the amount derived in subclause (II) of clause (i). (5) (A) The final adjusted projected total payment adjustment amount determined for each eligible hospital for the period October 1, 1999, through June 30, 2000, shall be distributed to the hospital in 8 equal installments, each payable as of the last day of each month from October 1999 through May 2000. However, no hospital shall receive an installment for any month in which the hospital does not remain in operation for the entire month. (B) To the extent that any hospital of either of the hospital types described in subparagraph (C) or (D) of paragraph (4) is not entitled to receive an installment that otherwise would be payable but for the hospital’s failure to remain in operation through the last day of a particular month, the amount that would have been paid to the hospital shall be redistributed among those hospitals of the same hospital type that remain in operation from October 1, 1999, through June 30, 2000, to be distributed on a pro rata basis. The redistributed amounts shall be payable as of June 30, 2000. (6) Notwithstanding any other provision of law, with respect to a hospital that meets the definition of a public hospital as of July 1, 1999, the provisions of paragraphs (1) through (5) shall initially be implemented for the period October 1, 1999, through December 31, 1999, without application of the OBRA 1993 payment limitations. As of January 1, 2000, the department shall recalculate all determinations under paragraphs (1) through (5) for the payment adjustment year, taking into account the hospital’s OBRA 1993 payment limitation as determined pursuant to federal medicaid law in existence as of January 1, 2000, and adjust, as necessary, the monthly payment installments from January 2000 through May 2000 to take into account any modifications to the recalculated amounts payable for the period October 1999 through December 1999 as may arise from the application of this paragraph. (7) Notwithstanding any other provision of law, for the entire 1999–2000 payment adjustment year, no eligible hospital shall receive total payment adjustments in excess of the hospital’s OBRA 1993 payment limitation as computed by the department pursuant to the Medi-Cal State Plan. (8) The aggregate sum of the final adjusted projected total payment adjustment amounts computed under paragraph (4) for each eligible hospital for the period October 1, 1999, through June 30, 2000, shall be the maximum size of the payment adjustment program for the entire 1999–2000 payment adjustment year, exclusive of the supplemental payment adjustments provided for under subdivision (aj). (9) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. (aj) (1) For the 1999–2000 payment adjustment year, eligible hospitals that meet the requirements of this subdivision and that are in operation as of June 30, 2000, shall be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date, but only if the hospital has remained in operation for the period October 1, 1999, through June 30, 2000. (2) The availability of supplemental lump-sum payment adjustments under this subdivision shall be determined as follows: (A) The maximum state disproportionate share hospital allotment for California under the provisions of applicable federal medicaid rules shall be identified for the 2000 federal fiscal year. (B) The total amount of all payment adjustment amounts under this section (exclusive of any payments under this subdivision) applicable to the 2000 federal fiscal year, whether paid or payable, shall be determined. The applicability of payment adjustment amounts to the 2000 federal fiscal year shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (C) (i) The figure determined under subparagraph (B) shall be subtracted from the figure identified under subparagraph (A). If the remainder is a positive figure, supplemental lump-sum payment adjustments shall be made under this subdivision in accordance with this subparagraph and paragraph (3). (ii) The positive remainder derived under clause (i) shall be the maximum amount of supplemental lump-sum payment adjustments under this subdivision where: (I) effective for at least the 1999–2000 payment adjustment year, federal legislation is enacted regarding the application of the OBRA 1993 payment limitation with provisions substantially similar in effect to Section 4721(e) of the federal Balanced Budget Act of 1997 (P.L. 105-33) as that related to the 1997–98 and 1998–99 payment adjustment years; and (II) all necessary amendments to the Medi-Cal State Plan implementing that federal legislation as it relates to the 1999–2000 payment adjustment year have been approved by the federal Health Care Financing Administration. (iii) If any element set forth in clause (ii) is not satisfied, the maximum amount of supplemental lump-sum payment adjustments under this subdivision shall be the lesser of: (I) the positive remainder derived in clause (i); or (II) one hundred six million dollars ($106,000,000). (3) (A) For purposes of supplemental lump-sum payment adjustments under this subdivision, only hospitals that can be categorized into either of the two groups specified in clauses (i) and (ii) below shall be eligible to receive the supplemental payment adjustments, and no hospital may qualify for more than one of the two groups. The following groups of hospitals shall be recognized: (i) “Public hospitals,” which shall include all eligible hospitals that, as of July 1, 1999, met the definition of a public hospital. (ii) “Nonpublic hospitals,” which shall include all eligible hospitals that, as of July 1, 1999, met the definition of a nonpublic hospital. (B) The amount determined to be the maximum amount of supplemental lump-sum payment adjustments under subparagraph (C) of paragraph (2) shall first be allocated between the two groups of hospitals referred to in subparagraph (A) as follows: (i) “Public hospitals”: 71.64 percent of the maximum amount. (ii) “Nonpublic hospitals”: 28.36 percent of the maximum amount. (C) The amount of funds allocated pursuant to subparagraph (B) to each of the particular groups of hospitals referred to in subparagraphs (A) and (B) shall then be distributed as supplemental lump-sum payment adjustments among the eligible hospitals within each particular group as follows: (i) The department shall identify for each eligible hospital the total amount of payment adjustments under this section (exclusive of any payments under this subdivision) applicable to the 1999–2000 payment adjustment year, whether paid or payable. The applicability of the payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules, including Sections 447.297(d)(3) and 447.298 of Title 42 of the Code of Federal Regulations. (ii) The amount identified for each hospital under clause (i) shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the 1999–2000 payment adjustment year. For all purposes under this subdivision, calculations of the OBRA 1993 payment limitations for public hospitals shall not be performed prior to January 1, 2000, as referred to in paragraph (6) of subdivision (ai). (iii) Where the amount computed under clause (i) for the particular hospital is equal to or exceeds the OBRA 1993 payment limitation for the hospital, the hospital shall not receive a supplemental lump-sum payment adjustment. Data regarding hospitals that have reached this limitation shall not be used for purposes of clauses (v) through (viii). (iv) Where the amount computed under clause (i) for the particular hospital is less than the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) shall be used for purposes of clauses (v) through (viii). (v) The figures determined under clause (iv) for each hospital in the particular group shall be added together to determine an aggregate total for each group. (vi) The figures determined for each hospital under clause (iv) shall be divided by the aggregate total determined under clause (v) for the particular group, yielding a percentage figure for each hospital. (vii) The percentage figure determined for each hospital under clause (vi) shall be applied to the maximum portion of the funds allocated to the particular group under subparagraph (B), to determine the hospital’s pro rata share of the supplemental lump-sum payment adjustments. Except, however, in the case of a nonpublic hospital that, as of July 1, 1999, met the definition of a children’s hospital, that pro rata share otherwise determined shall be multiplied by a factor of 1.09, yielding a modified pro rata share. The pro rata share for the other nonpublic hospitals shall be reduced accordingly, yielding a modified pro rata share, so that the maximum portion of the funds allocated to the nonpublic hospitals group will not be exceeded. The pro rata share or modified pro rata share, as applicable, for each hospital, as computed under this clause, shall also be used for all purposes relating to descending pro rata distributions under clause (viii). (viii) In no event shall a hospital receive supplemental lump-sum payment adjustment amounts in excess of the difference between the OBRA 1993 payment limitation for the hospital and the amount computed for the hospital under clause (i). Any supplemental lump-sum payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals within the same group. (D) The department shall make interim and final payments of the supplemental lump-sum payment adjustments to hospitals on or before August 15, 2000. (4) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. (ak) Notwithstanding any other provision of law, no payment adjustment amounts shall be payable in connection with the period of July 1 through September 30 of the 2000–01 payment adjustment year. The payment adjustment program with respect to the period October 1, 2000, through June 30, 2001, shall be structured as set forth below and in subdivision (al). (1) (A) The department shall compute the projected total payment adjustment amounts for all eligible hospitals for the 2000–01 payment adjustment year, by determining for each eligible hospital its total per diem composite amount and multiplying that figure by the maximum number of the hospital’s Medi-Cal inpatient paid days determined under paragraph (2) of subdivision (l). For purposes of this subparagraph, these determinations shall be without regard to the OBRA 1993 payment limitations. Notwithstanding the foregoing, with respect to a hospital that, as of July 1, 2000, meets the definition of converted hospital, the amount otherwise determined under this subparagraph shall be reduced as necessary so as not to exceed the total amount of all payment adjustment amounts payable to the hospital under this section for that payment adjustment year in which the hospital was last an eligible hospital meeting the definition of a public hospital. (B) The computed amount referred to in subparagraph (A) for each hospital shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital. (C) Where the computed amount referred to in subparagraph (A) for the particular hospital exceeds the OBRA 1993 payment limitation for the hospital, the amount computed under subparagraph (A) shall be reduced to an amount equal to the OBRA 1993 payment limitation for the particular hospital. The amount so reduced shall be used for purposes of subparagraph (E). (D) Where the computed amount referred to in subparagraph (A) for the particular hospital is equal to or less than the OBRA 1993 payment limitation for the hospital, the computed amount referred to in subparagraph (A) shall be used for purposes of subparagraph (E). (E) The amounts determined under subparagraphs (C) and (D) for all eligible hospitals shall be added together, yielding an aggregate sum. The aggregate sum shall be the unadjusted projected total payment adjustment program for the period of October 1, 2000, through June 30, 2001, exclusive of any supplemental payment adjustments under subdivision (al). (2) The initial maximum size of the payment adjustment program for the period October 1, 2000, through June 30, 2001, shall be set at one billion seven hundred fifty million dollars ($1,750,000,000), exclusive of any supplemental payment adjustments under subdivision (al). (3) The department shall increase or decrease the amount determined for each eligible hospital under subparagraph (C) or (D) of paragraph (1), as applicable, by multiplying the amount by an identical percentage, yielding the hospital’s tentative adjusted projected total payment adjustment amount for the period October 1, 2000, through June 30, 2001. The identical percentage figure to be used for this purpose shall be that percentage that is derived by dividing the amount set forth in paragraph (2) by the aggregate sum determined under subparagraph (E) of paragraph (1). Notwithstanding the foregoing, however, the amount determined for a hospital under subparagraphs (C) or (D) of paragraph (1) shall not be increased so that it would exceed the OBRA 1993 payment limitation for the hospital, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the tentative adjusted projected total payment adjustment amount for all hospitals equals the amount set forth in paragraph (2). (4) The tentative adjusted projected total payment adjustment amount computed for each eligible hospital under paragraph (3) shall be further adjusted as follows: (A) (i) For each eligible hospital that meets the definition of a nonpublic-converted hospital as of July 1, 2000, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic-converted hospital adjustment factor.” The applicable adjustment factor for the particular hospital shall be 0.81; except however, where the hospital also meets the definition of a major teaching hospital as of July 1, 2000, the applicable adjustment factor shall be that which is necessary to result in an amount for the particular hospital equal to forty million dollars ($40,000,000). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 2000, through June 30, 2001, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation. (B) (i) For each eligible hospital that meets the definition of a converted hospital as of July 1, 2000, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “converted hospital adjustment factor,” derived as follows: (I) The maximum OBRA 1993 payment limitation specified by federal law, expressed as a maximum percentage of uncompensated care costs, that is applicable to the hospital for the 2000–01 payment adjustment year shall be subtracted from that maximum percentage of uncompensated care costs that the hospital was subject to as a public hospital during the 1999–2000 payment adjustment year. (II) The converted hospital adjustment factor shall be that figure derived in subclause (I), expressed as a fraction, subtracted from 1.00. (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 2000, through June 30, 2001, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation. (C) (i) For each eligible hospital that meets the definition of a nonpublic hospital as of July 1, 2000, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic hospital adjustment factor.” The applicable adjustment factor shall be derived as follows: (I) The tentative adjusted projected total payment adjustment amounts determined under paragraph (3) for each nonpublic hospital shall be added together. (II) The amount identified in paragraph (2) shall be divided by 2.1527. (III) The amount derived under subclause (II) shall be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A), and the sum of the amounts determined for all converted hospitals under clause (ii) of subparagraph (B) that exceed that amount equal to 31 percent of all payment adjustment amounts payable to each converted hospital under this section for that payment adjustment year in which the hospital was last an eligible hospital meeting the definition of a public hospital. (IV) The amount computed under subclause (III) shall be divided by 2, and the result thereof further reduced by the amount of thirty-three million five hundred thousand dollars ($33,500,000). (V) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (IV) by the amount derived in subclause (I). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 2000, through June 30, 2001, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other nonpublic hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all nonpublic hospitals equals the amount derived in subclause (IV) of clause (i). (D) (i) For each eligible hospital that meets the definition of a public hospital as of July 1, 2000, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “public hospital adjustment factor.” The applicable adjustment factor shall be derived as follows: (I) The tentative adjusted projected total payment adjustment amounts determined under paragraph (3) for each public hospital described above shall be added together. (II) The amount identified in paragraph (2) shall be reduced by the sums of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A) and all converted hospitals under clause (ii) of subparagraph (B), and the sum of the amounts determined for all nonpublic hospitals under clause (ii) of subparagraph (C). (III) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (II) by the amount derived in subclause (I). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1, 2000, through June 30, 2001, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other public hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all public hospitals equals the amount derived in subclause (II) of clause (i). (5) (A) The final adjusted projected total payment adjustment amount determined for each eligible hospital for the period October 1, 2000, through June 30, 2001, shall be distributed to the hospital in 8 equal installments, each payable as of the last day of each month from October 2000 through May 2001. However, no hospital shall receive an installment for any month in which the hospital does not remain in operation for the entire month. (B) To the extent that any hospital of either of the hospital types described in subparagraph (C) or (D) of paragraph (4) is not entitled to receive an installment that otherwise would be payable but for the hospital’s failure to remain in operation through the last day of a particular month, the amount that would have been paid to the hospital shall be redistributed among those hospitals of the same hospital type that remain in operation from October 1, 2000, through June 30, 2001, to be distributed on a pro rata basis. The redistributed amounts shall be payable as of June 30, 2001. (6) If, effective for the 2001 federal fiscal year, federal legislation is enacted that amends Section 1396r-4(f) of Title 42 of the United States Code to increase the amount for California for that fiscal year above the amount that would have otherwise been identified pursuant to that section as in existence on January 1, 2000, the department shall implement the provisions of paragraphs (1) through (5) as modified below. (A) The department shall determine the maximum state disproportionate share hospital allotment for California for the 2001 federal fiscal year under the provisions of applicable federal medicaid rules. (B) The department shall determine the maximum state disproportionate share hospital allotment for California for the 2001 federal fiscal year that would have resulted had Section 1396r-4(f) of Title 42 of the United States Code not been amended from the version of that section as in existence on January 1, 2000. (C) The amount determined under subparagraph (B) shall be subtracted from the amount determined under subparagraph (A). (D) For purposes of the calculations set forth in paragraph (3) regarding each hospital’s tentative adjusted projected total payment adjustment amount, the initial amount as set forth in paragraph (2) shall, in each instance prior to its application in those calculations, be increased by the amount derived in subparagraph (C). (E) The difference derived in subparagraph (C) shall be divided by the amount determined in subparagraph (B). The resulting fraction shall be multiplied by 1.145, and the result thereof added to 1.00, yielding a factor for purposes of modifying the determination of the applicable nonpublic hospital adjustment factor pursuant to subparagraph (F). (F) The amount determined under subclause (II) of clause (i) of subparagraph (C) of paragraph (4) shall be multiplied by the factor derived in subparagraph (E). The resulting amount shall be used for purposes of the calculations set forth in subclause (III) of clause (i) of subparagraph (C) of paragraph (4). (G) For purposes of the calculations set forth in clause (i) of subparagraph (D) of paragraph (4) regarding the determination of the applicable public hospital adjustment factor, the initial amount as set forth in paragraph (2) shall, in each instance prior to its application in those calculations, be increased by the amount derived in subparagraph (C). (7) Notwithstanding any other provision of law, for the entire 2000–01 payment adjustment year, no eligible hospital shall receive total payment adjustments in excess of the hospital’s OBRA 1993 payment limitation as computed by the department pursuant to the Medi-Cal State Plan. (8) The aggregate sum of the final adjusted projected total payment adjustment amounts computed under paragraph (4) for each eligible hospital for the period October 1, 2000, through June 30, 2001, shall be the maximum size of the payment adjustment program for the entire 2000–01 payment adjustment year, exclusive of the supplemental payment adjustments provided for under subdivision (al). (9) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. (al) (1) For the 2000–01 payment adjustment year, eligible hospitals that meet the requirements of this subdivision and that are in operation as of June 30, 2001, shall be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date, but only if the hospital has remained in operation for the period October 1, 2000, through June 30, 2001. (2) The availability of supplemental lump-sum payment adjustments under this subdivision shall be determined as follows: (A) The maximum state disproportionate share hospital allotment for California under the provisions of applicable federal medicaid rules shall be identified for the 2001 federal fiscal year. (B) The total amount of all payment adjustment amounts under this section (exclusive of any payments under this subdivision) applicable to the 2001 federal fiscal year, whether paid or payable, shall be determined. The applicability of payment adjustment amounts to the 2001 federal fiscal year shall be determined in accordance with federal medicaid rules. (C) The figure determined under subparagraph (B) shall be subtracted from the figure identified under subparagraph (A). If the remainder is a positive figure, supplemental lump-sum payment adjustments shall be made under this subdivision in accordance with this subparagraph and paragraph (3). The positive remainder so derived shall be the maximum amount of supplemental lump-sum payment adjustments under this subdivision. (3) (A) For purposes of supplemental lump-sum payment adjustments under this subdivision, only hospitals that can be categorized into either of the two groups specified in clauses (i) and (ii) below shall be eligible to receive the supplemental payment adjustments, and no hospital may qualify for more than one of the two groups. The following groups of hospitals shall be recognized: (i) “Public hospitals,” which shall include all eligible hospitals that, as of July 1, 2000, met the definition of a public hospital. (ii) “Nonpublic hospitals,” which shall include all eligible hospitals that, as of July 1, 2000, met the definition of a nonpublic hospital. (B) The amount determined to be the maximum amount of supplemental lump-sum payment adjustments under subparagraph (C) of paragraph (2) shall first be allocated between the two groups of hospitals referred to in subparagraph (A) as follows: (i) “Public hospitals”: 75 percent of the maximum amount. (ii) “Nonpublic hospitals”: 25 percent of the maximum amount. (C) The amount of funds allocated pursuant to subparagraph (B) to each of the particular groups of hospitals referred to in subparagraphs (A) and (B) shall then be distributed as supplemental lump-sum payment adjustments among the eligible hospitals within each particular group as follows: (i) The department shall identify for each eligible hospital the total amount of payment adjustments under this section, exclusive of any payments under this subdivision, applicable to the 2000–01 payment adjustment year, whether paid or payable. The applicability of the payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules. (ii) The amount identified for each hospital under clause (i) shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the 2000–01 payment adjustment year. (iii) Where the amount computed under clause (i) for the particular hospital is equal to or exceeds the OBRA 1993 payment limitation for the hospital, the hospital shall not receive a supplemental lump-sum payment adjustment. Data regarding hospitals that have reached this limitation shall not be used for purposes of clauses (v) through (viii). (iv) Where the amount computed under clause (i) for the particular hospital is less than the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) shall be used for purposes of clauses (v) through (viii). (v) The figures determined under clause (iv) for each hospital in the particular group shall be added together to determine an aggregate total for each group. (vi) The figures determined for each hospital under clause (iv) shall be divided by the aggregate total determined under clause (v) for the particular group, yielding a percentage figure for each hospital. (vii) The percentage figure determined for each hospital under clause (vi) shall be applied to the maximum portion of the funds allocated to the particular group under subparagraph (B), to determine the hospital’s pro rata share of the supplemental lump-sum payment adjustments. Notwithstanding the foregoing, however, in the case of a nonpublic hospital that, as of July 1, 2000, met the definition of a children’s hospital, that pro rata share otherwise determined shall be multiplied by a factor of 1.69, yielding a modified pro rata share to be applied only with respect to the first one million dollars ($1,000,000) of the funds allocated pursuant to clause (ii) of subparagraph (B), and, with respect to the remainder of the funds so allocated, the pro rata share otherwise determined shall be multiplied by a factor of 1.09, yielding a modified pro rata share to be applied. The pro rata share for the other nonpublic hospitals shall be reduced accordingly, yielding a modified pro rata share, so that the maximum portion of the funds allocated to the nonpublic hospitals group will not be exceeded. The pro rata share or modified pro rata share, as applicable, for each hospital, as computed under this clause, shall also be used for all purposes relating to descending pro rata distributions under clause (viii). (viii) In no event shall a hospital receive supplemental lump-sum payment adjustment amounts in excess of the difference between the OBRA 1993 payment limitation for the hospital and the amount computed for the hospital under clause (i). Any supplemental lump-sum payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals within the same group. (D) The department shall make interim and final payments of the supplemental lump-sum payment adjustments to hospitals on June 30, 2001. (4) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. (am) Notwithstanding any other provision of law, no payment adjustment amounts shall be payable in connection with the period of July 1 through September 30 of the 2001–02 payment adjustment year and subsequent payment adjustment years. The payment adjustment program with respect to the period October 1 through June 30 of the 2001–02 payment adjustment year and subsequent payment adjustment years shall be structured as set forth below and in subdivision (an). (1) (A) The department shall compute the projected total payment adjustment amounts for all eligible hospitals for the applicable payment adjustment year, by determining for each eligible hospital its total per diem composite amount and multiplying that figure by the maximum number of the hospital’s Medi-Cal inpatient paid days determined under paragraph (2) of subdivision (l). For purposes of this subparagraph, these determinations shall be without regard to the OBRA 1993 payment limitations. Notwithstanding the foregoing, with respect to a hospital that, as of July 1 of the applicable payment adjustment year, meets the definition of a converted hospital, the amount otherwise determined under this subparagraph shall be reduced as necessary so as not to exceed the total amount of all payment adjustment amounts payable to the hospital under this section for that payment adjustment year in which the hospital was last an eligible hospital meeting the definition of a public hospital. (B) The computed amount referred to in subparagraph (A) for each hospital shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital. (C) Where the computed amount referred to in subparagraph (A) for the particular hospital exceeds the OBRA 1993 payment limitation for the hospital, the amount computed under subparagraph (A) shall be reduced to an amount equal to the OBRA 1993 payment limitation for the particular hospital. The amount so reduced shall be used for purposes of subparagraph (E). (D) Where the computed amount referred to in subparagraph (A) for the particular hospital is equal to or less than the OBRA 1993 payment limitation for the hospital, the computed amount referred to in subparagraph (A) shall be used for purposes of subparagraph (E). (E) The amounts determined under subparagraphs (C) and (D) for all eligible hospitals shall be added together, yielding an aggregate sum. The aggregate sum shall be the unadjusted projected total payment adjustment program for the period of October 1 through June 30 of the applicable payment adjustment year, exclusive of any supplemental payment adjustments under subdivision (an). (2) (A) The department shall determine the maximum state disproportionate share hospital allotment for California for the applicable federal fiscal year under the provisions of applicable federal medicaid rules. (B) The initial maximum size of the payment adjustment program for the period October 1 through June 30 of each applicable payment adjustment year, shall be set at one billion six hundred million dollars ($1,600,000,000), exclusive of any supplemental payment adjustments under subdivision (an). (3) The department shall increase or decrease the amount determined for each eligible hospital under subparagraph (C) or (D) of paragraph (1), as applicable, by multiplying the amount by an identical percentage, yielding the hospital’s tentative adjusted projected total payment adjustment amount for the period October 1 through June 30 of the applicable payment adjustment year. The identical percentage figure to be used for this purpose shall be that percentage that is derived by dividing the amount set forth in subparagraph (B) of paragraph (2) by the aggregate sum determined under subparagraph (E) of paragraph (1). Notwithstanding the foregoing, however, the amount determined for a hospital under subparagraph (C) or (D) of paragraph (1) shall not be increased so that it would exceed the OBRA 1993 payment limitation for the hospital, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the tentative adjusted projected total payment adjustment amount for all hospitals equals the amount set forth in subparagraph (B) of paragraph (2). (4) The tentative adjusted projected total payment adjustment amount computed for each eligible hospital under paragraph (3) shall be further adjusted as follows: (A) (i) For each eligible hospital that meets the definition of a nonpublic-converted hospital as of July 1 of the applicable payment adjustment year, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic-converted hospital adjustment factor.” The applicable adjustment factor for the particular hospital shall be 0.835; except, however, where the hospital also meets the definition of a major teaching hospital as of July 1 of the applicable payment adjustment year, the applicable adjustment factor shall be the lesser of 1.00, or that which is necessary to result in an amount for the particular hospital equal to thirty-five million eight hundred thousand dollars ($35,800,000). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1 through June 30 of the applicable payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation. (B) (i) For each eligible hospital that meets the definition of a converted hospital as of July 1 of the applicable payment adjustment year, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “converted hospital adjustment factor,” derived as follows: (I) The maximum OBRA 1993 payment limitation specified by federal law, expressed as a maximum percentage of uncompensated care costs, that is applicable to the hospital for the particular payment adjustment year shall be subtracted from that maximum percentage of uncompensated care costs that the hospital was subject to as a public hospital during the 1999–2000 payment adjustment year. (II) The converted hospital adjustment factor shall be that figure derived in subclause (I), expressed as a fraction, subtracted from 1.00. (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1 through June 30 of the applicable payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation. (C) (i) For each eligible hospital that meets the definition of a nonpublic hospital as of July 1 of the applicable payment adjustment year, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “nonpublic hospital adjustment factor.” The applicable adjustment factor shall be derived as follows: (I) The tentative adjusted projected total payment adjustment amounts determined under paragraph (3) for each nonpublic hospital shall be added together. (II) The amount identified in subparagraph (B) of paragraph (2) shall be divided by 2.237. (III) The resulting figure in subclause (II) shall be increased by an amount equal to the product of the medical assistance increment multiplied by the maximum amount identified in subparagraph (A) of paragraph (2). (IV) The amount derived under subclause (III) shall be reduced by the sum of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A), and the sum of the amounts determined for all converted hospitals under clause (ii) of subparagraph (B) that exceed that amount equal to 31 percent of all payment adjustment amounts payable to each converted hospital under this section for that payment adjustment year in which the hospital was last an eligible hospital meeting the definition of a public hospital. (V) The amount computed under subclause (IV) shall be divided by 2, and the result thereof further reduced by the amount of thirty-three million five hundred thousand dollars ($33,500,000). (VI) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (V) by the amount derived in subclause (I). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1 through June 30 of the applicable payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other nonpublic hospitals (that have not reached their OBRA 1993 payment limitation) on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all nonpublic hospitals equals the amount derived in subclause (V) of clause (i). (D) (i) For each eligible hospital that meets the definition of a public hospital as of July 1 of the applicable payment adjustment year, the hospital’s tentative adjusted projected total payment adjustment amount shall be multiplied by a “public hospital adjustment factor.” The applicable adjustment factor shall be derived as follows: (I) The tentative adjusted projected total payment adjustment amounts determined under paragraph (3) for each public hospital described above shall be added together. (II) The amount identified in subparagraph (B) of paragraph (2) shall be reduced by the sums of the amounts determined for all nonpublic-converted hospitals under clause (ii) of subparagraph (A) and all converted hospitals under clause (ii) of subparagraph (B) and the sum of the amounts determined for all nonpublic hospitals under clause (ii) of subparagraph (C). (III) The applicable adjustment factor shall be that ratio that results from dividing the amount derived in subclause (II) by the amount derived in subclause (I). (ii) The resulting product shall be the final adjusted projected total payment adjustment amount for the hospital for the period October 1 through June 30 of the applicable payment adjustment year, which shall be paid to the hospital in accordance with paragraph (5). Notwithstanding the foregoing, however, in no case shall the final adjusted projected total payment adjustment amount exceed the hospital’s OBRA 1993 payment limitation, and, where that would otherwise occur, the remaining amount that would have been allocated to the particular hospital shall be reallocated to all other public hospitals that have not reached their OBRA 1993 payment limitation on a pro rata basis so that the aggregate sum of the final adjusted projected total payment adjustment amounts for all public hospitals equals the amount derived in subclause (II) of clause (i). (5) (A) The final adjusted projected total payment adjustment amount determined for each eligible hospital for the period October 1 through June 30 of the applicable payment adjustment year shall be distributed to the hospital in 8 equal installments, each payable as of the last day of each month from October through May of the applicable payment adjustment year. However, no hospital shall receive an installment for any month in which the hospital does not remain in operation for the entire month. (B) To the extent that any hospital of either of the hospital types described in subparagraph (C) or (D) of paragraph (4) is not entitled to receive an installment that otherwise would be payable but for the hospital’s failure to remain in operation through the last day of a particular month, the amount that would have been paid to the hospital shall be redistributed among those hospitals of the same hospital type that remain in operation from October 1 through June 30 of the applicable payment adjustment year, to be distributed on a pro rata basis. The redistributed amounts shall be payable as of June 30 of the applicable payment adjustment year. (6) If, with respect to the 2001–02 payment adjustment year or any subsequent payment adjustment year, the amount identified for California for the applicable federal fiscal year pursuant to Section 1396r-4(f) of Title 42 of the United States Code exceeds the amount of eight hundred seventy-seven million dollars ($877,000,000), the department shall implement the provisions of paragraphs (1) through (5) with respect to the applicable payment adjustment year as modified below. (A) The department shall determine the maximum state disproportionate share hospital allotment for California under the provisions of applicable federal medicaid rules. (B) The department shall calculate the maximum state disproportionate share hospital allotment for California, by substituting in the calculation the amount of eight hundred seventy-seven million dollars ($877,000,000), as though that amount was identified for California for the applicable federal fiscal year pursuant to Section 1396r-4(f) of Title 42 of the United States Code. (C) The amount determined under subparagraph (B) shall be subtracted from the amount determined under subparagraph (A). (D) For purposes of the calculations set forth in paragraph (3) regarding each hospital’s tentative adjusted projected total payment adjustment amount, the initial amount as set forth in subparagraph (B) of paragraph (2) shall, in each instance prior to its application in those calculations, be increased by the amount derived in subparagraph (C). (E) The difference derived in subparagraph (C) shall be divided by the amount determined in subparagraph (B). (F) For purposes of the determination made under clause (i) of subparagraph (A) of paragraph (4) regarding nonpublic-converted hospitals that also meet the definition of a major teaching hospital, the amount of thirty-five million eight hundred thousand dollars ($35,800,000) as specified therein shall be multiplied by a number equal to the sum of the fraction derived in subparagraph (E) plus the number 1.00. (G) The fraction derived in subparagraph (E) shall be multiplied by 1.226, and the result thereof added to 1.00, yielding a factor for purposes of modifying the determination of the applicable nonpublic hospital adjustment factor pursuant to subparagraphs (H) and (I). (H) The amount determined under subclause (II) of clause (i) of subparagraph (C) of paragraph (4) shall be multiplied by the factor derived in subparagraph (G), and the resulting amount shall be used for purposes of the calculations set forth in subclause (III) of clause (i) of subparagraph (C) of paragraph (4), as modified by subparagraph (I) below. (I) For purposes of the calculations in subclause (III) of clause (i) of subparagraph (C) of paragraph (4), the recalculated maximum amount derived in subparagraph (B) shall be used in lieu of the maximum amount determined in subparagraph (A) of paragraph (2). (J) For purposes of the calculations set forth in subclause (II) of clause (i) of subparagraph (D) of paragraph (4) regarding the determination of the applicable public hospital adjustment factor, the initial amount as set forth in subparagraph (B) of paragraph (2) shall, in each instance prior to its application in those calculations, be increased by the amount derived in subparagraph (C). (7) Notwithstanding any other provision of law, for the entire payment adjustment year, no eligible hospital shall receive total payment adjustments in excess of the hospital’s OBRA 1993 payment limitation as computed by the department pursuant to the Medi-Cal State Plan. (8) The aggregate sum of the final adjusted projected total payment adjustment amounts computed under paragraph (4) for each eligible hospital for the period October 1 through June 30 of the applicable payment adjustment year, shall be the maximum size of the payment adjustment program for the entire payment adjustment year, exclusive of the supplemental payment adjustments provided for under subdivision (an). (9) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. (an) (1) For the 2001–02 payment adjustment year and subsequent payment adjustment years, eligible hospitals that meet the requirements of this subdivision and that are in operation as of June 30 of the applicable payment adjustment year, shall be eligible to receive a supplemental lump-sum payment adjustment, which shall be payable as a result of the facility being a disproportionate share hospital in operation as of that date, but only if the hospital has remained in operation for the period October 1 through June 30 of the applicable payment adjustment year. (2) The availability of supplemental lump-sum payment adjustments under this subdivision shall be determined as follows: (A) The maximum state disproportionate share hospital allotment for California under the provisions of applicable federal medicaid rules shall be identified for the applicable federal fiscal year. (B) The total amount of all payment adjustment amounts under this section, exclusive of any payments under this subdivision, applicable to the applicable federal fiscal year, whether paid or payable, shall be determined. The applicability of payment adjustment amounts to the 2000 federal fiscal year shall be determined in accordance with federal medicaid rules. (C) The figure determined under subparagraph (B) shall be subtracted from the figure identified under subparagraph (A). If the remainder is a positive figure, supplemental lump-sum payment adjustments shall be made under this subdivision in accordance with this subparagraph and paragraph (3). The positive remainder so derived shall be the maximum amount of supplemental lump-sum payment adjustments under this subdivision for the applicable payment adjustment year. (3) (A) For purposes of supplemental lump-sum payment adjustments under this subdivision, only hospitals that can be categorized into either of the two groups specified in clauses (i) and (ii) below shall be eligible to receive the supplemental payment adjustments, and no hospital may qualify for more than one of the two groups. The following groups of hospitals shall be recognized: (i) “Public hospitals,” which shall include all eligible hospitals that, as of July 1 of the applicable payment adjustment year, met the definition of a public hospital. (ii) “Nonpublic hospitals,” which shall include all eligible hospitals that, as of July 1 of the applicable payment adjustment year, met the definition of a nonpublic hospital. (B) The amount determined to be the maximum amount of supplemental lump-sum payment adjustments under subparagraph (C) of paragraph (2) shall first be allocated between the two groups of hospitals referred to in subparagraph (A) as follows: (i) “Public hospitals”: 75 percent of the maximum amount. (ii) “Nonpublic hospitals”: 25 percent of the maximum amount. (C) The amount of funds allocated pursuant to subparagraph (B) to each of the particular groups of hospitals referred to in subparagraphs (A) and (B) shall then be distributed as supplemental lump-sum payment adjustments among the eligible hospitals within each particular group as follows: (i) The department shall identify for each eligible hospital the total amount of payment adjustments under this section, exclusive of any payments under this subdivision, applicable to the payment adjustment year, whether paid or payable. The applicability of the payment adjustment amounts to this period of time shall be determined in accordance with federal medicaid rules. (ii) The amount identified for each hospital under clause (i) shall be compared to the OBRA 1993 payment limitation that, in accordance with applicable provisions of the Medi-Cal State Plan, the department has computed for the particular hospital for the applicable payment adjustment year. (iii) Where the amount computed under clause (i) for the particular hospital is equal to or exceeds the OBRA 1993 payment limitation for the hospital, the hospital shall not receive a supplemental lump-sum payment adjustment. Data regarding hospitals that have reached this limitation shall not be used for purposes of clauses (v) through (viii). (iv) Where the amount computed under clause (i) for the particular hospital is less than the OBRA 1993 payment limitation for the hospital, the amount computed under clause (i) shall be used for purposes of clauses (v) through (viii). (v) The figures determined under clause (iv) for each hospital in the particular group shall be added together to determine an aggregate total for each group. (vi) The figures determined for each hospital under clause (iv) shall be divided by the aggregate total determined under clause (v) for the particular group, yielding a percentage figure for each hospital. (vii) The percentage figure determined for each hospital under clause (vi) shall be applied to the maximum portion of the funds allocated to the particular group under subparagraph (B), to determine the hospital’s pro rata share of the supplemental lump-sum payment adjustments. Notwithstanding the foregoing, however, in the case of a nonpublic hospital that, as of July 1 of the applicable payment adjustment year, met the definition of a children’s hospital, that pro rata share otherwise determined shall be multiplied by a factor of 1.69, yielding a modified pro rata share to be applied only with respect to the first one million dollars ($1,000,000) of the funds allocated pursuant to clause (ii) of subparagraph (B), and, with respect to the remainder of the funds so allocated, the pro rata share otherwise determined shall be multiplied by a factor of 1.09, yielding a modified pro rata share to be applied. The pro rata share for the other nonpublic hospitals shall be reduced accordingly, yielding a modified pro rata share, so that the maximum portion of the funds allocated to the nonpublic hospitals group will not be exceeded. The pro rata share or modified pro rata share, as applicable, for each hospital, as computed under this clause, shall also be used for all purposes relating to descending pro rata distributions under clause (viii). (viii) In no event shall a hospital receive supplemental lump-sum payment adjustment amounts in excess of the difference between the OBRA 1993 payment limitation for the hospital and the amount computed for the hospital under clause (i). Any supplemental lump-sum payment adjustment amount, or portion thereof, that otherwise would have been payable under this paragraph to a hospital, but that is barred by this limitation, shall be distributed on a descending pro rata basis to those hospitals within the same group. (D) The department shall make interim and final payments of the supplemental lump-sum payment adjustments to hospitals on June 30 of the applicable payment adjustment year. (4) The department shall implement this subdivision only to the extent consistent with federal medicaid law and the Medi-Cal State Plan, and only to the extent that the department determines that federal financial participation is available. (Amended by Stats. 2000, Ch. 48, Sec. 1. Effective June 29, 2000.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.982. (a) (1) The department may adopt emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 1 of Title 2 of the Government Code to specify a process for the preparation and issuance of any or all of the following: (A) The tentative listing, as that term is used in paragraph (1) of subdivision (f) of Section 14105.98. (B) The disproportionate share list, as that term is used in paragraphs (1) and (2) of subdivision (f) of Section 14105.98. (C) Hospital-specific payment determinations pursuant to Section 14105.98. (2) The process may include, but shall not be limited to, all of the following: (A) Identification of the particular information to be prepared and issued. (B) The opportunity for an affected hospital to review its individual hospital data elements. (C) The timeframes for issuance and review of the items described in paragraph (1). (D) The circumstances under which updated or corrected data may be accepted and used by the department. (b) The initial adoption of the emergency regulations and one readoption of the initial regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare. The initial emergency regulations and the first readoption of those regulations shall be exempt from review by the Office of Administrative Law. The emergency regulations authorized by this section shall be submitted to the Office of Administrative Law for filing with the Secretary of State and publication in the California Code of Regulations, and shall remain in effect for no more than 180 days. Before adopting any emergency regulations pursuant to this section, the department shall seek input from representatives of the hospital industry, including, but not limited to, the California Healthcare Association. (Added by Stats. 2000, Ch. 48, Sec. 2. Effective June 29, 2000.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.985. (a) (1) Disproportionate share payment augmentation programs shall be maintained for eligible providers pursuant to Section 14087.5, 14088, 14089, 14093, or 14200. (2) The department shall make payment augmentations directly to eligible providers. (b) (1) Inpatient days provided by licensed hospitals to Medi-Cal beneficiaries under contract to managed care contractors who are contracting with the department under Section 14087.5, 14088, 14093, 14200, or 14490 shall be included in the department’s calculation of annualized Medi-Cal inpatient paid days for use in determining the hospital’s medicaid inpatient hospitalization rate under Section 14105.98. (2) Managed care contractors subject to paragraph (1) shall report inpatient days subject to paragraph (1) to the department. (c) Revenue for inpatient services provided for Medi-Cal beneficiaries received by hospitals under contract to managed care contractors who are contracting with the department under Section 14087.5, 14088, 14093, 14200, or 14490 shall be included in the percentage rate calculations for the determination of the low-income utilization rate under Section 14105.98. (Added by Stats. 1992, Ch. 722, Sec. 107.5. Effective September 15, 1992.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.986. (a) Any children’s hospital as defined in Section 10727 that holds a consolidated license issued pursuant to subparagraph (C) of paragraph (4) of subdivision (b) of Section 1250.8 of the Health and Safety Code may be evaluated for eligibility for payments under subdivision (c) of Section 14105.98 no earlier than January 1, 2000, using data related to all physical plants appearing on the consolidated license. For purposes of calculating the appropriate amount of the payment adjustment under subdivision (l) of Section 14105.98 for these children’s hospitals, the department shall use data relating only to the children’s hospital or any other physical plant appearing on the consolidated license which is not more than 15 miles from the children’s hospital and shall exclude data relating to any physical plant added to the consolidated license pursuant to subparagraph (C) of paragraph (4) of subdivision (b) of Section 1250.8 of the Health and Safety Code. (b) The department shall not implement this section unless all of the following occur: (1) Federal financial participation is available. (2) The federal Health Care Financing Administration approves a state plan amendment to implement this section. (3) All data necessary to complete the evaluations and calculations required by subdivision (a) are provided to the department from the same sources described in Section 14105.98 and in the approved state plan existing on July 1, 1998. In no event shall data directly provided by a children’s hospital be utilized for these evaluations and calculations. (Added by Stats. 1998, Ch. 982, Sec. 2. Effective January 1, 1999.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14105.99. (a) For purposes of this section, “Attachment 4.19-A” means the Medi-Cal payment adjustment system for acute inpatient hospital services set forth in Attachment 4.19-A of the Medi-Cal State Plan which became effective on or about July 1, 1990. (b) (1) It is the intent of the Legislature that the annual appropriation for, and distribution of, payments pursuant to Attachment 4.19-A shall be reduced as a result of the payment adjustment program set forth in Section 14105.98, but only when federal approval, as described in paragraph (2) of subdivision (d) of Section 14105.98, is gained for that payment adjustment program. (2) When the payment adjustment program set forth in Section 14105.98 gains federal approval, Attachment 4.19-A shall become inoperative and any appropriated amount for Attachment 4.19-A that is unexpended shall revert to the Health Care Deposit Fund for use in support of the Medi-Cal program. (Amended by Stats. 1991, Ch. 1046, Sec. 4. Effective October 14, 1991.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14106. If a Medi-Cal provider negotiates a rate of payment for inpatient, outpatient, or ancillary services with a prepaid health plan under contract with the department pursuant to Chapter 8 (commencing with Section 14200) of this part which is lower than or equal to the lesser of reasonable costs, customary charges, or the schedule of maximum allowances, the rate shall not affect the director’s determination of reasonable costs, customary charges, or schedule of maximum allowances. (Amended by Stats. 1982, Ch. 328, Sec. 27. Effective June 30, 1982.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14106.2. Insofar as permitted by federal law, for purposes of determining the reasonable costs of any service reimbursable under the provisions of this chapter, or determining prospective per capita rates of payment or cost-basis reimbursement under Chapter 8 (commencing with Section 14200) or Chapter 8.7 (commencing with Section 14520), any gifts, grants, or endowments received by the provider of such services or prepaid health plan, and any income earned by the investment or deposit thereof, shall not be deducted from the operating costs of such provider or plan. It is the intent of the Legislature, in enacting this section, to encourage philanthropic support of health facilities and other providers of services to Medi-Cal beneficiaries. (Added by Stats. 1980, Ch. 887, Sec. 2.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14106.6. The director shall establish and update annually a rate schedule of reimbursement for paramedic services which provides reimbursement based upon reasonable cost standards of the department. Notwithstanding any other provision of law, and to the extent federal financial participation is available, any city, county, or special district providing paramedic services as set forth in subdivision (s) of Section 14132, shall reimburse the Health Care Deposit Fund for the state costs of paying such medical claims. Funds allocated to the county from the County Health Services Fund pursuant to Part 4.5 (commencing with Section 16700) of Division 9 of the Welfare and Institutions Code may be utilized by the county or city to make such reimbursement. Nothing in this chapter shall be construed to require a city, county, or special district providing, or contracting for, paramedic services as part of a program established under Article 3 (commencing with Section 1480) of Chapter 2.5 of Division 2 of the Health and Safety Code, to seek Medi-Cal reimbursement for services rendered to eligible Medi-Cal recipients. This section shall be in effect only to the extent federal financial participation is available. (Added by Stats. 1980, Ch. 1322, Sec. 2. Effective September 30, 1980.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14107. (a) Any person, including any applicant or provider as defined in Section 14043.1, or billing agent, as defined in Section 14040.1, who engages in any of the activities identified in subdivision (b) is punishable by imprisonment as set forth in subdivisions (c) , (d), and (e), by a fine not exceeding three times the amount of the fraud or improper reimbursement or value of the scheme or artifice, or by both this fine and imprisonment. (b) The following activities are subject to subdivision (a): (1) A person, with intent to defraud, presents for allowance or payment any false or fraudulent claim for furnishing services or merchandise under this chapter or Chapter 8 (commencing with Section 14200). (2) A person knowingly submits false information for the purpose of obtaining greater compensation than that to which he or she is legally entitled for furnishing services or merchandise under this chapter or Chapter 8 (commencing with Section 14200). (3) A person knowingly submits false information for the purpose of obtaining authorization for furnishing services or merchandise under this chapter or Chapter 8 (commencing with Section 14200). (4) A person knowingly and willfully executes, or attempts to execute, a scheme or artifice to do either of the following: (A) Defraud the Medi-Cal program or any other health care program administered by the department or its agents or contractors. (B) Obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, the Medi-Cal program or any other health care program administered by the department or its agents or contractors, in connection with the delivery of or payment for health care benefits, services, goods, supplies, or merchandise. (c) A violation of subdivision (a) is punishable by imprisonment in a county jail, or in the state prison for two, three, or five years. (d) If the execution of a scheme or artifice to defraud as defined in paragraph (4) of subdivision (b) is committed under circumstances likely to cause or that do cause two or more persons great bodily injury, as defined in Section 12022.7 of the Penal Code, or serious bodily injury, as defined in paragraph (4) of subdivision (f) of Section 243 of the Penal Code, a term of four years, in addition and consecutive to the term of imprisonment imposed in subdivision (c), shall be imposed for each person who suffers great bodily injury or serious bodily injury. The additional terms provided in this subdivision shall not be imposed unless the facts showing the circumstances that were likely to cause or that did cause great bodily injury or serious bodily injury to two or more persons are charged in the accusatory pleading and admitted or found to be true by the trier of fact. (e) If the execution of a scheme or artifice to defraud, as defined in paragraph (4) of subdivision (b) results in a death which constitutes a second degree murder, as defined in Section 189 of the Penal Code, the offense shall be punishable, upon conviction, pursuant to subdivision (a) of Section 190 of the Penal Code. (f) Any person, including an applicant or provider as defined in Section 14043.1, or billing agent, as defined in Section 14040.1, who has engaged in any of the activities subject to fine or imprisonment under this section, shall be subject to the asset forfeiture provisions for criminal profiteering. (g) Pursuant to Section 923 of the Penal Code, the Attorney General may convene a grand jury to investigate and indict for any of the activities subject to fine, imprisonment, or asset forfeiture under this section. (h) The enforcement remedies provided under this section are not exclusive and shall not preclude the use of any other criminal or civil remedy. However, an act or omission punishable in different ways by this section and other provisions of law shall not be punished under more than one provision, but the penalty to be imposed shall be determined as set forth in Section 654 of the Penal Code. (Amended by Stats. 2000, Ch. 322, Sec. 27. Effective January 1, 2001.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14107.1. Any provider on whose behalf improper claims are submitted for authorization or payment under this chapter may be required to submit all such claims over the provider’s own signature for whatever time period the department determines appropriate. (Added by Stats. 1976, Ch. 965.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14107.11. (a) Upon receipt of a credible allegation of fraud as defined in subdivision (d) and for which an investigation is pending under the Medi-Cal program against a provider as defined in Section 14043.1, or the commencement of a suspension under Section 14123, the provider shall be temporarily placed under payment suspension, unless it is determined there is a good cause exception, as defined in subdivision (g), not to suspend the payments or to suspend them only in part, and the department may do any of the following: (1) Collect any Medi-Cal program overpayment identified through an audit or examination, or any portion thereof from any provider. Notwithstanding Section 100171 of the Health and Safety Code, a provider may appeal the collection of overpayments under this section pursuant to procedures established in Article 5.3 (commencing with Section 14170). Overpayments collected under this section shall not be returned to the provider during the pendency of any appeal and may be offset to satisfy audit or appeal findings if the findings are against the provider. Overpayments will be returned to a provider with interest if findings are in favor of the provider. (2) Give notification of the payment suspension for any goods, services, supplies, or merchandise, or any portion thereof. The department shall notify the provider within five days of any payment suspension under this section. The department may delay notification to the provider by 30 days if it is requested to do so in writing by any law enforcement agency, which may be renewed in writing up to two times and in no event may exceed 90 days. The notice to the provider shall do all of the following: (A) State that the payment suspension is being imposed in accordance with this subdivision and that the payment suspension is for a temporary period and will not continue if it is determined that no credible allegation of fraud remains against the provider or when legal proceedings relating to the allegation are complete. (B) Cite the circumstances under which the payment suspension will be terminated. (C) Specify, when appropriate, the type or types of claims for which payment is being suspended. (D) Inform the provider of the right to submit written evidence that would be admissible under the administrative adjudication provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, for consideration by the department. (b) Notwithstanding Section 100171 of the Health and Safety Code, a provider may appeal a payment suspension pursuant to Section 14043.65. Payments suspended under this section shall not be returned to the provider during the pendency of any appeal and may be offset to satisfy audit or appeal findings. (c) A payment suspension may be lifted when a resolution of an investigation for fraud or abuse occurs as defined in subdivision (p) of Section 14043.1. (d) An allegation of fraud shall be considered credible if it exhibits indicia of reliability as recognized by state or federal courts or by other law sufficient to meet the constitutional prerequisite to a law enforcement search or seizure of comparable business assets. The department shall carefully consider the allegations, facts, data, and evidence with the same thoroughness as a state or federal court would use in approving a warrant for a search or seizure. (e) (1) On a quarterly basis, the Department of Justice, and any other law enforcement agency that has accepted referrals for investigation from the department, shall submit a report to the department listing each referral and stating whether the referral continues to be under investigation and whether it involves a credible allegation of fraud. If the Department of Justice or a law enforcement agency fails to submit a report under this subdivision, the department may request the report from the Department of Justice or the law enforcement agency on no more than a quarterly basis. The Department of Justice or the law enforcement agency, as applicable, shall provide the report within 30 days of the request. (2) Notwithstanding paragraph (1), no quarterly report shall be required from a law enforcement agency, unless that law enforcement agency has either received a referral from the department or reported an open case to the department and has not yet reported rejection or closure of that referral or open case. (f) A report, request, or notification submitted under this section shall be exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). These records may be disclosed to law enforcement agencies or other government entities that execute an agreement conforming to paragraph (5) of subdivision (c) of Section 7921.505 of the Government Code. (g) For purposes of this section, all of the following apply: (1) “Provider” has the same meaning as that term is defined in Section 14043.1. (2) “Good cause exception” means a reason determined by the department that falls under Section 455.23(e) or (f) of Title 42 of the Code of Federal Regulations. (3) “Law enforcement agency” includes any agency employing peace officers, as defined in Chapter 4.5 (commencing with Section 830) of Title 3 of Part 2 of the Penal Code. (h) The director may, in consultation with interested parties, adopt regulations to implement this section as necessary. These regulations may be adopted as emergency regulations in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and the adoption of the regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare. The director shall transmit these emergency regulations directly to the Secretary of State for filing and the regulations shall become effective immediately upon filing. Upon completion of the formal regulation adoption process and prior to the expiration of the 120-day duration period of emergency regulations, the director shall transmit directly to the Secretary of State the adopted regulations, the rulemaking file, and the certification of compliance as required by subdivision (e) of Section 11346.1 of the Government Code. (Amended by Stats. 2021, Ch. 615, Sec. 452. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14107.115. (a) The Medi-Cal Anti-Fraud Special Deposit Fund is hereby created in the State Treasury. (b) All outstanding Medi-Cal payments intercepted by the State Controller’s Office at the direction of the department, as a result of a payment suspension imposed on a Medi-Cal provider pursuant to Section 14107.11, shall be deposited into the Medi-Cal Anti-Fraud Special Deposit Fund. (c) All moneys deposited into the Medi-Cal Anti-Fraud Special Deposit Fund shall be continuously appropriated and allocated in accordance with subdivision (d), but shall remain in the fund until the department lifts the suspension pursuant to subdivision (c) of Section 14107.11. (d) Upon the lifting of a suspension, the department may return the intercepted Medi-Cal payments to the Medi-Cal provider or may offset the payments against any liabilities or restitution owed by the Medi-Cal provider to the department, including, but not limited to, any liabilities described in paragraph (1) of subdivision (a) of Section 14107.11. (Added by Stats. 2025, Ch. 21, Sec. 98. (AB 116) Effective June 30, 2025.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14107.12. (a) The Department of Justice may pay, pursuant to subdivision (d), from funds recovered by the Department of Justice, and only to the extent that the money may be used for this purpose, a reward to any person who furnishes information leading to the recovery of not less than one hundred dollars ($100) of public funds paid for services or goods rendered under the Medi-Cal program due to an act or omission by an individual or entity from which recovery is sought and that is the basis of a conviction of a Medi-Cal provider of services or goods in violation of any statutory criminal prohibition within the jurisdiction of the Division of Medi-Cal Fraud and Elder Abuse pursuant to Section 12528 of the Government Code. (b) A reward shall not be paid for information under this section unless the information relates to the specific activities of a specific individual or entity, and specifies the time period during which the prohibited activities occurred. (c) A reward shall not be paid under this section to a federal, state, or local public employee or any individual contracting with a state or local agency for information discovered by the employee during the course of their duties as a federal, state, or local agency employee or pursuant to a contract with that agency. (d) The amount of a reward under this section shall be determined by the Department of Justice, and shall not exceed 10 percent of the restitution recovered or one thousand dollars ($1,000), whichever is less. A reward shall not be paid until all recoverable funds have been collected from the individual or entity convicted of a violation of statutory prohibitions listed in subdivision (a). (e) A determination by the Department of Justice of the eligibility of an individual to receive a reward, the amount and appropriateness of a reward under this section, and the timing of the payment of the reward shall be deemed to be final and shall not be subject to administrative appeal or judicial review. (f) Subject to subdivision (g), payments made under authority of this section shall be disregarded for purposes of determining eligibility for any Medi-Cal program, the CalWORKs program, the CalFresh program, the County Medical Services Program, and any other means-tested public benefit program for which California has authority to establish the rules for determining eligibility. (g) The income disregard described in subdivision (f) shall not be effective, with respect to an identified program, until the first day of the third month from the month in which any necessary federal approval is obtained. The income disregard provided for in subdivision (f) shall only be implemented to the extent that federal financial participation is obtained. (Amended by Stats. 2021, Ch. 554, Sec. 11. (SB 823) Effective January 1, 2022.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14107.13. (a) (1) The department, in conjunction with the Department of Justice, shall identify those areas of the fee-for-service Medi-Cal program that are at greatest risk of fraud or abuse. (2) In an effort to curb the fraud and abuse, the department shall do one or both of the following: (A) Request confirmation of service from beneficiaries that services or goods were actually received. (B) Request confirmation of service from referring and rendering providers that the referring providers actually authorized and the rendering providers actually delivered services or goods underlying claims for reimbursement. (3) For purposes of this section, “areas” includes, but is not limited to, provider types, services, aid code categories, and geographic areas. (b) For any fee-for-service benefit, the department shall provide a notice to confirm service to the following: (1) The recipient of the benefits. (A) Notices under this paragraph shall be provided no more frequently than once per calendar month and shall detail all benefits reportedly received that are relevant to the suspected fraudulent or abusive activity identified in paragraph (1) of subdivision (a). (B) Notwithstanding subparagraph (A), a notice shall not be provided to a beneficiary who has not received benefits that are relevant to the suspected fraudulent or abusive activity identified in paragraph (1) of subdivision (a). (2) The referring and rendering providers of benefits. (A) Notices under this paragraph shall be provided no more frequently than one per calendar month and shall detail all referrals for benefits and all benefits rendered that are relevant to the suspected fraudulent or abusive activity identified in paragraph (1) of subdivision (a). (B) Notwithstanding subparagraph (A), a notice shall not be sent to a provider who has made no referrals for benefits nor rendered benefits that are relevant to the suspected fraudulent or abusive activity identified in paragraph (1) of subdivision (a). (C) Notwithstanding subparagraph (A), a notice shall not be sent to a provider who receives a remittance advice from the state. (D) Subject to subdivision (e), notices under this paragraph shall be sent to the provider’s mailing address, facsimile number, or electronic mail address, of record with the appropriate licensing agency. (c) The notices required by this section shall be sent for as long as the department, in conjunction with the Department of Justice, deems it necessary for fraud control purposes. (d) The notices required by this section shall be adopted jointly by the department and the Department of Justice. (e) The notices required by this section shall be transmitted electronically, via facsimile, or by mail, whichever is most cost-effective, practicable, and consistent with state and federal privacy laws and regulations. (f) Notices sent to beneficiaries pursuant to paragraph (1) of subdivision (b) shall comply with the Medi-Cal threshold language requirements that apply to Medi-Cal managed care plans. (Added by Stats. 2004, Ch. 394, Sec. 1. Effective January 1, 2005.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14107.2. (a) Any person who solicits or receives any remuneration, including, but not restricted to, any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in valuable consideration of any kind, either: (1) In return for the referral, or promised referral, of any individual to a person for the furnishing or arranging for the furnishing of any service or merchandise for which payment may be made, in whole or in part, under this chapter or Chapter 8 (commencing with Section 14200); or (2) In return for the purchasing, leasing, ordering, or arranging for or recommending the purchasing, leasing, or ordering of any goods, facility, service or merchandise for which payment may be made, in whole or in part, under this chapter or Chapter 8 (commencing with Section 14200), is punishable upon a first conviction by imprisonment in a county jail for not longer than one year or imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or by a fine not exceeding ten thousand dollars ($10,000), or by both that imprisonment and fine. A second or subsequent conviction shall be punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code. (b) Any person who offers or pays any remuneration, including, but not restricted to, any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in valuable consideration of any kind, either: (1) To refer any individual to a person for the furnishing or arranging for furnishing of any service or merchandise for which payment may be made, in whole or in part, under this chapter or Chapter 8 (commencing with Section 14200); or (2) To purchase, lease, order, or arrange for or recommend the purchasing, leasing, or ordering of any goods, facility, service, or merchandise for which payment may be made, in whole or in part, under this chapter or Chapter 8 (commencing with Section 14200), is punishable upon a first conviction by imprisonment in a county jail for not longer than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by a fine not exceeding ten thousand dollars ($10,000), or by both that imprisonment and fine. A second or subsequent conviction shall be punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code. (c) Subdivisions (a) and (b) shall not apply to the following: (1) Any amount paid by an employer to an employee, who has a bona fide employment relationship with that employer, for employment with provision of covered items or services. (2) A discount or other reduction in price obtained by a provider of services or other entity under this chapter or Chapter 8 (commencing with Section 14200), if the reduction in price is properly disclosed and reflected in the costs claimed or charges made by the provider or entity under this chapter or Chapter 8 (commencing with Section 14200). This paragraph shall not apply to consultant pharmaceutical services rendered to nursing facilities nor to all categories of intermediate care facilities for the developmentally disabled. (3) The practices or transactions between a federally qualified health center, as defined in Section 1396d(l)(2)(B) of Title 42 of the United States Code, and any individual or entity shall be permitted only to the extent sanctioned or permitted by federal law. (4) The provision of nonmonetary remuneration in the form of hardware, software, or information technology and training services, as described in subsections (x) and (y) of Section 1001.952 of Title 42 of the Code of Federal Regulations, as amended October 4, 2007, as published in the Federal Register (72 Fed. Reg. 56631, 56644), and subsequently amended versions. (d) For purposes of this section, “kickback” means a rebate or anything of value or advantage, present or prospective, or any promise or undertaking to give any rebate or thing of value or advantage, with a corrupt intent to unlawfully influence the person to whom it is given in actions undertaken by that person in his or her public, professional, or official capacity. (e) The enforcement remedies provided under this section are not exclusive and shall not preclude the use of any other criminal or civil remedy. (Amended by Stats. 2011, Ch. 15, Sec. 630. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14107.3. Any person who knowingly and willfully charges, solicits, accepts, or receives, in addition to any amount payable under this chapter, any gift, money, contribution, donation, or other consideration as a precondition to providing services or merchandise to a Medi-Cal beneficiary for any service or merchandise in the Medi-Cal program’s scope of benefits in addition to a claim submitted to the Medi-Cal program under this chapter or Chapter 8 (commencing with Section 14200), except either: (1) To collect payments due under a contractual or legal entitlement pursuant to subdivision (b) of Section 14000; or (2) To bill a long-term care patient or representative for the amount of the patient’s share of the cost; or (3) As provided under Section 14019.3, is punishable upon a first conviction by imprisonment in the county jail for not longer than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by a fine not to exceed ten thousand dollars ($10,000), or both such imprisonment and fine. A second or subsequent conviction shall be punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code. (Amended by Stats. 2011, Ch. 15, Sec. 631. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14107.4. (a) Any person who, with the intent to defraud, certifies as true and correct any cost report, submitted by a hospital to a state agency for reimbursement pursuant to Section 14170, who knowingly fails to disclose in writing on the cost report any significant beneficial interest, as defined in subdivision (d), which the owners of the provider, or members of the provider governing board, or employees of the provider, or independent contractor of the provider, have in the contractors or vendors to the providers, is guilty of a public offense. (b) Any person who, with the intent to defraud, knowingly causes any material false information to be included in any cost report submitted by a hospital to a state agency for reimbursement pursuant to Section 14170 shall be guilty of an offense punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or by a fine not exceeding ten thousand dollars ($10,000), or by a fine and imprisonment, or by imprisonment in the county jail not exceeding one year, or by a fine not exceeding five thousand dollars ($5,000), or by both a fine and imprisonment. (c) The provider’s chief executive officer shall certify that any cost report submitted by a hospital to a state agency for reimbursement pursuant to Section 14170 shall be true and correct. In the case of a hospital which is operated as a unit of a coordinated group of health facilities and under common management, either the hospital’s chief executive officer or administrator, or the chief financial officer of the operating region of which the hospital is a part, shall certify to the accuracy of the report. (d) As used in this section, “significant beneficial interest” means any financial interest that is equal to or greater than twenty-five thousand dollars ($25,000) of ownership interest or 5 percent of the whole ownership or any other contractual or compensatory arrangement with vendors or contractors or immediate family members of vendors or contractors. “Immediate family” means spouse, son, daughter, father, mother, father-in-law, mother-in-law, daughter-in-law, or son-in-law. Interests held by these persons specified in subdivision (a) and members of these person’s immediate family should be combined and included as a single interest. (e) Any person who violates the provisions of subdivision (a) is punishable by imprisonment in the county jail for a period not to exceed one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by fine not to exceed five thousand dollars ($5,000), or by both such fine and imprisonment. (Amended by Stats. 2011, Ch. 15, Sec. 632. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14107.5. (a) The department may, pursuant to regulations adopted pursuant to subdivision (b), rescind the privileges of a provider of durable medical equipment or incontinence supplies who fails to satisfy the requirements of this section to bill and receive payment for services provided under this chapter. (b) The department shall adopt regulations to define the specific causes for which the authority of a Medi-Cal provider of durable medical equipment or incontinence supplies to bill and receive payment for services provided under this chapter may be rescinded for violation of this section. (c) The department shall not rescind the authority of a Medi-Cal provider of durable medical equipment or incontinence supplies to bill and receive payment under this chapter without a prior hearing, unless any of the following conditions exist: (1) The provider has failed to provide material information to the department pursuant to Section 14125.8. (2) The provider has knowingly furnished false information on any application for provider enrollment. (3) The provider has knowingly filed false claims for reimbursement under this chapter. (Added by Stats. 1991, Ch. 560, Sec. 3.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14108. Any developmentally disabled recipient under this chapter receiving care in a nursing facility or any category of intermediate care facility for the developmentally disabled is entitled as a part of the therapeutic and rehabilitative program, to be temporarily absent from the facilities. The State Department of Health Services shall, with consultation from the State Department of Developmental Services, adopt regulations establishing the periods of time and conditions under which temporary absences shall be permitted. The regulations shall require that absences be in accordance with an individual program plan and provide for absences due to hospitalization for an acute condition. The limits on temporary leaves of absence established by the Department of Health Services by regulation shall not be less than 30 days per year. During these temporary absences the State Department of Health Services shall reimburse the facility for the cost of maintaining the vacant accommodations at a rate determined by the department which shall be less than the regular rate. (Amended by Stats. 1990, Ch. 1329, Sec. 18. Effective September 26, 1990.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14108.1. Any recipient receiving care in a nursing facility under this chapter, as part of a certified special treatment program for persons with mental illnesses, or as a part of a mental health therapeutic and rehabilitative program approved and certified by a local mental health director, is entitled to be temporarily absent from those facilities. The department may develop regulations establishing the periods of time and conditions under which temporary absences shall be permitted. These regulations shall require that absences be in accordance with an individual patient care plan and also provide for absences due to hospitalization for an acute condition. The limits on temporary leaves of absence established by the department by regulation shall not be less than 30 days per year. During these temporary absences, the department shall reimburse the facility for the cost of maintaining the vacant accommodations at a rate to be determined by the department which shall be less than the normal reimbursement rate. (Amended by Stats. 2012, Ch. 34, Sec. 226. (SB 1009) Effective June 27, 2012. Operative July 1, 2012, by Sec. 254 of Ch. 34.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14108.2. Except as provided by Section 14108 and Section 14108.1, any recipient of services under this chapter who is residing in a long-term care facility shall be permitted to be temporarily absent from such facilities for up to 18 days per year, not including days of bed hold for acute hospitalization. The department may approve additional days of leave on an individual basis, not to exceed 12 days per year, exclusive of days of bed hold for acute hospitalization. All such leaves of absence shall be in accordance with an individual patient care plan as approved by the attending physician. The director shall adopt regulations establishing the conditions under which additional leave days shall be authorized. The director may establish reasonable limits on the duration of any period of absence. (Added by Stats. 1982, Ch. 857, Sec. 1.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14109. In determining the medical needs of any person eligible under this chapter, and the amount of health care such person is entitled to receive, the department shall include the cost of any deductibles or, cost sharing or similar charge imposed in connection with benefits to which such person may be entitled under the federal program of health insurance for the aged and disabled, except that for those individuals 65 years of age or over, who prior to July 1, 1973, were ineligible under the federal program of health insurance for the aged, the director may include such costs. (Amended by Stats. 1973, Ch. 1216.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14109.5. Notwithstanding the provisions of Section 14109, effective January 1, 1982, the reimbursement rate for costs specified in Section 14109 for all services, including, but not limited to, hospital inpatient services, shall, to the extent feasible, not exceed the reimbursement rate for similar services established under this chapter. For purposes of this section, effective October 1, 1992, the reimbursement rates established under this chapter for hospital inpatient services shall be no greater than the amounts paid by the Medicare program for similar services. The fiscal intermediary shall expedite the implementation of any change order resulting only from this section. The department shall provide sufficient funding for any such change order to enable the fiscal intermediary to implement such change order expeditiously and to not have to divert staff or other resources from existing contract tasks, including but not limited to those resources dedicated to the implementation of all other change orders. (Amended by Stats. 1992, Ch. 722, Sec. 108. Effective September 15, 1992.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14109.6. Notwithstanding Section 14109, effective September 1, 1997, and pursuant to Section 1396a(n) of Title 42 of the United States Code, as amended by Section 4714 of the federal Balanced Budget Act of 1997, the reimbursement rate for costs specified in Section 14109 for all services, including, but not limited to, hospital inpatient services, shall, to the extent feasible, not exceed the reimbursement rate for similar services established under this chapter. Effective for dates of service on or after September 1, 1997, the reimbursement rates established under this chapter for hospital inpatient services shall be no greater than the amounts paid by the Medicare program for similar services. Notwithstanding the provisions of this section, Section 14109.5 shall remain in effect for dates of service prior to September 1, 1997. It is the intent of the Legislature that regulations and the amendments to the medicaid state plan previously adopted pursuant to Section 14109.5 shall remain in effect for purposes of this section until amended or otherwise modified by the department. (Added by Stats. 1997, Ch. 294, Sec. 70. Effective August 18, 1997.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110. No payment for care or services shall be made under Medi-Cal to a medical or health care facility unless it has been certified by the department for participation, and it meets one of the following: (a) It is licensed by the department. (b) It is licensed by a comparable agency in another state. (c) It is exempt from licensure. (d) It is operated by the Regents of the University of California. (e) It meets the utilization review plan criteria for certification or is certified as an institutional provider of services under Title XVIII of the Federal Social Security Act and regulations issued thereunder. Nothing in this section shall preclude payments for care for aged patients in medical facilities or institutions operated or licensed by the department, or the State Department of State Hospitals, State Department of Developmental Services, State Department of Social Services, or Department of Rehabilitation. The department shall certify facilities licensed pursuant to subdivision (e) of Section 1250 of the Health and Safety Code for participation in the program within 30 calendar days of receipt of a complete application or date of licensure, whichever is greater, if the facility meets all the requirements for certification. The department for claims purposes only, shall enroll facilities which meet all certification requirements within 30 calendar days of the date of certification or 60 calendar days of licensure, whichever is greater. (Amended by Stats. 2012, Ch. 440, Sec. 79. (AB 1488) Effective September 22, 2012.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110.05. (a) The department shall ensure that nursing facility applicants have access to assistance in identifying and securing the information necessary to complete the Medi-Cal application and to make the eligibility determination. (b) The department shall ensure that Medi-Cal applications for nursing facility residents are processed in a timely manner in accordance with state and federal laws and regulations. (Added by Stats. 1992, Ch. 84, Sec. 3. Effective January 1, 1993.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110.1. Medi-Cal reimbursements for long-term care in any hospital shall be at a rate not to exceed the maximum rate paid for long-term care in nursing facilities which are distinct parts of acute care hospitals, except for patients whose medical or nursing needs exceed the level of care provided in nursing facilities. (Amended by Stats. 1989, Ch. 731, Sec. 13.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110.15. (a) The department shall develop, collect, and maintain, in an electronic format, all data elements in the minimum data set specified by the federal government. The data base shall incorporate the data required for preadmission screening and annual resident reviews, and Medi-Cal treatment authorization requests. The department shall make the format of this new data base available to the public. (b) All skilled nursing facilities and nursing facilities required by federal law to complete the minimum data set form shall provide the data to the department in a manner and form prescribed by the director. The director may require that the submission of that data shall be in an electronic format. (c) The department shall design the minimum data set data base in a manner that maintains resident confidentiality and that allows the use of the data by other authorized state agencies, including, but not limited to, the Office of Statewide Health Planning and Development. To the extent possible, those other state agencies shall obtain the minimum data set and preadmission screening and annual resident review data from the department’s database established and maintained pursuant to this section. (d) To the fullest extent possible, the department shall use the minimum data set database to meet the requirements of the current treatment authorization request review process and shall automate use of the minimum data set information for that purpose. (e) This section shall not be construed to prohibit the department or any other state agency from requiring additional information that is not available from the minimum data set database in order to meet other data needs. (f) The department shall implement this section no later than the date specified by the federal government for facility completion of automation of the minimum data set data. The department shall, within a reasonable time, make necessary system changes to begin the use of the automated minimum data set data to meet its treatment authorization and preadmission screening and annual resident review data requirements. To the fullest extent possible, these system changes shall be anticipated and commenced in advance of the federal government’s final implementation date. (g) The system shall be developed and implemented in consultation with representatives of the long-term care industry and other interested parties, such as physicians and other health care professionals. (h) The department shall implement the development of the minimum data set database only if federal funds are available for that purpose. Development of the data system applications for use of the automated minimum data set database by the department are subject to federal approval and federal financial participation for the affected systems. (Amended by Stats. 2012, Ch. 34, Sec. 227. (SB 1009) Effective June 27, 2012. Operative July 1, 2012, by Sec. 254 of Ch. 34.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110.2. The director shall, unless precluded by federal law or regulation, amend the state plan under Title XIX of the Social Security Act to conform to the policy directions and budgetary decisions of the Legislature, as reflected in the Budget Act for each fiscal year. (Added by Stats. 1982, Ch. 328, Sec. 29. Effective June 30, 1982.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110.3. Until the Secretary of Health, Education and Welfare establishes, by regulation, standards in accordance with Title XIX of the Federal Social Security Act for intermediate care facilities, there shall be no requirement for the provision of intermediate care in nursing homes; however, a nursing home may elect to waive the provisions of this section and voluntarily apply to the department to provide intermediate care in its facility. (Added by Stats. 1976, Ch. 504.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110.4. (a) All laundry services for all apparel, linen, garments, towels, and hospital gowns shall be provided by a nursing facility or any category of intermediate care facility for the developmentally disabled at no cost to a recipient under this chapter. These laundry services shall be considered as part of the basic care provided by the facility under the daily rate provided for pursuant to this chapter. The director shall, if necessary, adjust the daily rate to provide for the costs of these services. A facility may, however, charge the patient a fee to provide special drycleaning or treatment for a garment needing this care, when the garment is owned by the patient and when the regular laundry service is not appropriate. (b) A facility shall provide a periodic hair trim as part of its care for all patients who are recipients under this chapter. This service shall be included as part of the daily rate provided for pursuant to this chapter. The director shall, if necessary, adjust the daily rate to provide for the costs of these services. A facility may, however, charge a fee for beauty shop services for patients who request special treatments or styling of their hair. (c) The director shall seek all federal funds available for implementation of this section. (Amended by Stats. 1990, Ch. 1329, Sec. 19. Effective September 26, 1990.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110.5. Effective January 1, 1977, no payment for any prescription ophthalmic device shall be made under Medi-Cal if that device does not meet the standards adopted by the department, the State Board of Optometry or the Division of Licensing of the Medical Board of California under Section 2541.3 of the Business and Professions Code. (Amended by Stats. 1995, Ch. 279, Sec. 26. Effective January 1, 1996.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110.55. For the purposes of the pilot program established under Section 14495.10, or, if Section 14495.10 is repealed and replaced by Section 14132.20, then under the program implemented pursuant to Section 14132.20, the department shall develop a reimbursement rate for continuous skilled nursing care services provided by a participating health facility to developmentally disabled individuals who meet the federal waiver eligibility criteria or Medi-Cal State Plan amendment criteria. The reimbursement rate shall be determined in accordance with a methodology that shall be developed by the department. The department may elect to establish individual patient-specific rates. (Amended by Stats. 2009, 4th Ex. Sess., Ch. 5, Sec. 41. Effective July 28, 2009.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110.6. (a) The director shall adopt regulations, establishing payment rates for nursing facilities, intermediate care facilities/developmentally disabled, and intermediate care facilities/developmentally disabled-habilitative as defined in Section 1250 of the Health and Safety Code, which are sufficient to provide an increase of one dollar and ninety-six cents ($1.96) per patient day for patients receiving skilled nursing services, one dollar and fifty-eight cents ($1.58) per patient day, for patients receiving intermediate care services, two dollars and twenty-nine cents ($2.29) per patient day for intermediate care facilities/developmentally disabled patients, to be used for wage increases and benefits to all employees, except a licensed nursing home administrator or an administrator-in-training and two dollars and thirty-five cents ($2.35) per patient day for intermediate care facilities/developmentally disabled-habilitative patients in facilities with 4 to 6 beds, and one dollar and ninety-eight cents ($1.98) per patient day for intermediate care facilities/developmentally disabled-habilitative patients in facilities with 7 to 15 beds, to be used for wage increases and benefits to all direct care staff. However, if either (1) the entry level wages of the lowest paid nonadministrative employee of a nursing facility, intermediate care facility/developmentally disabled, or intermediate care facility/developmentally disabled-habilitative, exceeds six dollars ($6) per hour as of August 1, 1984; or (2) upon the election of a county board of supervisors, for any nursing facility, intermediate care facility/developmentally disabled, or intermediate care facility/developmentally disabled-habilitative, which is operated by a county, the funds received pursuant to regulations adopted pursuant to this section shall be used solely for labor costs directly related to providing patient care services in order to meet patients’ needs including the uses of funds provided for under subdivision (d) of Section 14110.7. Any increase in wages and benefits required by this section shall be in addition to any future mandatory increases required by federal or state law. The rate shall provide funding for the portion of additional costs necessary to implement the wage and benefit increase required by this section attributable to Medi-Cal patients. The portion of those additional costs shall be the same as the ratio of Medi-Cal patients to the total number of patients in the facility. These regulations shall be adopted, effective March 15, 1985, for skilled nursing facilities, intermediate care facilities, and intermediate care facilities/developmentally disabled, and by October 1, 1985, for intermediate care facilities/developmentally disabled-habilitative. Commencing October 1, 1990, these requirements shall become operative for nursing facilities. (b) Each nursing facility or intermediate care facility/developmentally disabled, or, for the period prior to October 1, 1990, each skilled nursing facility or intermediate care facility, shall certify all of the following: (1) All employees, except a licensed nursing home administrator or an administrator-in-training of a licensed nursing home, shall receive at least the prevailing federal or state minimum wage rate plus the average hourly wage increase established pursuant to Chapter 19 of the Statutes of 1978, and this section. (2) All employees of the facility, except a licensed administrator or administrator-in-training, shall be paid not less than the sum of the employee’s actual rate of pay as of the effective date of the Medi-Cal rate increase provided for under Section 14110.7 plus the amount of the adjustment specified pursuant to this section, or not less than the applicable agreed to rate plus the amount of the adjustment, whichever is greater. (3) Any wage increase required pursuant to Section 1268.5 of the Health and Safety Code, is in addition to any minimum wages provided in this section. (4) For purposes of determining the amount of Medi-Cal funds to be distributed for employee wages and benefits, the total Medi-Cal patient days recorded by the facility in the month of December 1983 shall be multiplied by the amount per patient day specified in subdivision (a) plus the amount provided by Chapter 19 of the Statutes of 1978. The new wage levels shall be determined by dividing the Medi-Cal funds received by the nonovertime hours worked by covered employees in December 1983, plus any adjustments due to additional employees as specified in Section 14110.7 and adjustments to reflect employee benefit allowances. (c) Each intermediate care facility/developmentally disabled-habilitative shall certify all of the following: (1) All direct care staff, as defined in the department’s regulations developed pursuant to Section 1267.7 of the Health and Safety Code, shall receive at least the prevailing federal or state minimum wage plus the average hourly wage increase pursuant to this section. (2) For purposes of determining the amount of Medi-Cal funds to be distributed for intermediate care facilities/developmentally disabled-habilitative for employee wages and benefits, the total Medi-Cal patient days in the month of December 1984, shall be multiplied by the amount per patient day specified in subdivision (a). The new wage level shall be determined by dividing the Medi-Cal funds received by the nonovertime hours by covered direct care employees in December 1984, and adjustments to reflect employee benefit allowances. (d) The director shall order the inspection of relevant payroll and personnel records of facilities which are reimbursed for Medi-Cal patients under the rate of reimbursement established pursuant to subdivision (a) to ensure that the wage and benefit increases provided for have been implemented. (e) The department shall, commencing August 1, 1999, increase the Medi-Cal reimbursement for level A and level B nursing facilities solely to provide funds for salaries, wages, and benefits increases for direct care staff. For the purposes of this subdivision, “direct care staff” means registered nurses, licensed vocational nurses, and nurse assistants, who provide direct patient care. The amount of funds to be provided to each level A and level B facility pursuant to this subdivision shall be calculated on a per-patient-day basis, and shall be added to the per diem rate paid to each facility. The amount of funds provided under this subdivision to each nursing facility peer group shall be published in a Medi-Cal provider bulletin. Level A and level B facilities shall compensate their registered nurses, licensed vocational nurses, and nurse assistants that portion of the rate increase provided under this subdivision in the form of salaries, wages, and benefits increases for their direct care staff. The total amount to be passed through by each facility shall be the per diem amount received by the facility pursuant to this subdivision times the facility’s number of Medi-Cal patient days. (f) Subject to an appropriation for this purpose in the Budget Act of 2000, in addition to the increase specified in subdivision (e), the department shall, commencing August 1, 2000, increase the Medi-Cal reimbursement rate for nursing facilities, intermediate care facilities/developmentally disabled, intermediate care facilities/developmentally disabled-habilitative, and intermediate care facilities/developmentally disabled-nursing solely to provide funds for salaries, wages, and benefits increases for direct care staff and other staff, subject to all of the following: (1) For purposes of this subdivision, “direct care staff in nursing facilities” means the following: (A) Registered nurses and licensed vocational nurses, when employed in the performance of direct care to patients. (B) Employees in the nurse assistant classification employed in the performance of direct care to patients at a freestanding or distinct-part nursing facility, including job titles such as nursing aide, aide, practical nurse, orderly, nurse assistant, and certified nurse assistant. (C) Employees performing respiratory therapy services for Medi-Cal pediatric subacute patients, including job titles such as respiratory care practitioner, respiratory technician, respiratory therapist inhalation technician, and inhalation therapist. (2) For purposes of this subdivision, “direct care staff in intermediate care facilities/developmentally disabled, intermediate care facilities/developmentally disabled-habilitative, and intermediate care facilities/developmentally disabled-nursing” means all of the following: (A) A qualified intellectual disability professional employed in the performance of direct care to patients. (B) Lead personnel employed in the performance of direct care to patients. Lead personnel described in this subparagraph shall not be considered to be supervisory. (C) Employees in the nurse assistant classification employed in the performance of direct care to patients at a freestanding or distinct-part nursing facility, including job titles such as nurse assistants and aides. (D) Other nonsupervisory staff providing direct patient care. (E) Registered nurses and licensed vocational nurses, if employed in the performance of direct care to patients. (3) For purposes of paragraphs (1) and (2), “direct care staff” shall not include registered nurses or other personnel performing supervisory functions or housekeeping or maintenance staff in any facility. (4) For purposes of this subdivision, “other staff” means all of the following personnel: (A) Linen and laundry staff. (B) Plant operations and maintenance staff. (C) Housekeeping staff. (D) Dietary staff. (5) (A) The amount of funds to be provided to each facility pursuant to this subdivision shall be added to the per diem rate paid to each facility on a per-patient-day basis. (B) The per diem amount of funds provided to each facility type and peer group pursuant to this subdivision shall be published in a Medi-Cal provider bulletin. Nursing facilities that are part of an acute care hospital and subacute facilities shall be notified of their per diem amount provided pursuant to this subdivision in a separate letter to each facility. (6) (A) Facilities receiving funds pursuant to this subdivision shall compensate staff that portion of the rate increase provided pursuant to this subdivision in the form of salaries, wages, and benefits increases. The total amount to be passed through pursuant to this subdivision by each facility shall be the per diem amount received by the facility pursuant to this subdivision multiplied by the facility’s number of Medi-Cal patient days. (B) Each direct care and other staff employee classification shall receive a portion of the rate increase provided pursuant to this subdivision in the form of an increase in salary, wage, and benefits. The facility may allocate the amounts that each classification may receive, but the amount shall not be nominal or zero. (C) Funds passed through pursuant to this subdivision for purposes of salary, wages, or benefits increases may not be used for any salary, wage, or benefit increase that were committed to by a facility prior to August 1, 2000, nor may these funds be used for any salaries, wages, or benefits that the facility would have paid in the absence of this subdivision. (D) Funds passed through pursuant to this subdivision for purposes of salary, wages, or benefits increases may not be distributed to direct care and other staff in the form of bonuses. These funds may, however, be used to provide retroactive pay increases if those wage increases also increase the employee’s base salary rate. (7) The base from which direct care and other staff salaries, wages, and benefits shall be increased shall be the aggregate per hour salaries, wages, and benefits for the period of August 1, 1999, to July 31, 2000, inclusive. (8) The department may inspect relevant payroll and personnel records of facilities receiving funds pursuant to this subdivision in order to ensure that the salary, wage, and benefit increases provided for pursuant to this subdivision have been implemented. (9) Each facility receiving funds from the department, or from a county organized health system described in paragraph (10) pursuant to this subdivision shall certify on the form provided by the department that these funds were expended for increased direct care and other staff salary, wages, and benefits increases in accordance with this subdivision. The facility shall return the form to the department by October 1, 2001. The facility shall submit a copy of the completed form to all collective bargaining agents with whom the facility has collective bargaining agreements for direct care and other staff at the facility. (10) County organized health systems contracting with the department pursuant to Article 2.8 (commencing with Section 14087.5) and Article 7 (commencing with Section 14490) of Chapter 8 shall certify to the department, in a manner to be specified by the department, that the August 1, 2000, wage pass-through funds, received pursuant to this section in the form of capitated rate payments, were passed through to the facilities described in this subdivision. (g) Any facility which is paid under the rate provided for in subdivision (a), (e), or (f) which the director finds has not made the wage and benefit increases provided for shall be liable for the amount of funds paid to the facility based upon the wage and benefit requirements provided for by this section but not distributed to employees for wages and benefits, plus a penalty equal to 10 percent of the funds not so distributed. The facility shall be subject to Section 14107. (Amended by Stats. 2023, Ch. 797, Sec. 6. (AB 248) Effective January 1, 2024.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110.7. (a) The director shall adopt regulations increasing the minimum number of equivalent nursing hours per patient required in skilled nursing facilities to 3.2, in skilled nursing facilities with special treatment programs to 2.3, in intermediate care facilities to 1.1, and in intermediate care facilities/developmentally disabled to 2.7. (b) (1) The director shall adopt regulations that shall establish the minimum number of equivalent nursing hours per patient required in the following, for the first year of implementation of the first year of rates established pursuant to this article: (A) 2.6 hours for skilled nursing facilities. (B) 1.9 hours for skilled nursing facilities with special treatment programs. (C) 0.9 hours for intermediate care facilities. (D) 2.2 hours for intermediate care facilities/developmentally disabled. (2) The staffing standards established by paragraph (1) shall become effective concurrently with the establishment of the first reimbursement rates under this article. (3) The director shall adopt regulations that establish the minimum number of equivalent nursing hours per patient required in skilled nursing facilities at 2.7 for the second year of implementation of rates established pursuant to this article. (c) (1) The Legislature finds and declares all of the following: (A) The one-year transition phase from 2.6 to 2.7 equivalent nursing hours allows ample time to restructure staffing. (B) The 4 percent augmentation to reimburse for direct patient care, as defined in paragraph (2) of subdivision (b) of Section 14126.60, provides funds to cover additional expenses, if any, incurred by facilities to implement this staffing standard. (2) Subject to the appropriation of sufficient funds, the department may adopt regulations to increase the minimum number of equivalent nursing hours required of facilities subject to this section per patient beyond 2.7 nursing hours per patient day. (d) (1) The department shall identify those skilled nursing facilities that are in compliance with the 3.0 minimum double nursing hour standards, as defined in subdivision (a) of Section 1276.5 of the Health and Safety Code, but have actual staffing ratios below 2.5, as of July 1, 1990, and shall not enforce the 2.7 equivalent nursing hours with respect to those facilities until the third year of implementation of the rates established under this article. (2) The department shall periodically review facilities that have actual staffing ratios described in paragraph (1) to ensure that they are making sufficient progress toward 2.7 hours. (e) Notwithstanding paragraph (1) of subdivision (d), commencing January 1, 2000, the minimum number of nursing hours per patient day required in skilled nursing facilities shall be 3.2, without regard to the doubling of nursing hours as described in paragraph (1) of subdivision (b) of Section 1276.5 of the Health and Safety Code, and except as set forth in Section 1276.9 of the Health and Safety Code. (Amended by Stats. 2001, Ch. 685, Sec. 23. Effective January 1, 2002.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110.8. (a) For the purposes of this section: (1) “Facility” means any long-term health care facility as defined in subdivisions (c), (d), (e), (g), and (h) of Section 1250 of the Health and Safety Code. (2) “Resident” means a person who is a facility resident or patient and a Medi-Cal beneficiary and whose facility care is being paid for in whole or in part by Medi-Cal. (3) “Agent” means a person who manages, uses, or controls those funds or assets of the resident that legally are required to be used to pay the resident’s long-term care patient liability and other charges not paid for by the Medi-Cal program. (4) “Responsible party” means a person other than the resident or potential resident, who, by virtue of signing or cosigning an admissions agreement of a facility, either together with, or on behalf of, a potential resident, becomes personally responsible or liable for payment of any portion of the charges incurred by the resident while in the facility. A person who signs or cosigns a facility’s admissions agreement by virtue of being an agent under a power of attorney for health care or an attorney-in-fact under a durable power of attorney executed by the potential resident, a conservator of the person or estate of the potential resident, or a representative payee, is not a responsible party under this section, and does not thereby assume personal responsibility or liability for payment of any charges incurred by the resident, except to the extent that the person, or the resident’s conservator or representative payee is an agent as defined in paragraph (3). (b) No facility may require or solicit, as a condition of admission into the facility, that a Medi-Cal beneficiary have a responsible party sign or cosign the admissions agreement. No facility may accept or receive, as a condition of admission into the facility, the signature or cosignature of a responsible party for a Medi-Cal beneficiary. (c) A facility may require, as a condition of admission, where a resident has an agent, that the resident’s agent sign or cosign the admissions agreement and agree to distribute to the facility promptly when due, the long-term care patient liability and any other charges not paid for by the Medi-Cal program that the resident or their agent has agreed to pay. The financial obligation of the agent shall be limited to the amount of the resident’s funds received but not distributed to the facility. A new agent who did not sign or cosign the admissions agreement shall be held responsible to distribute funds in accordance with this section. (d) When a resident on non-Medi-Cal status converts to Medi-Cal coverage, any security deposit paid to the facility by the resident or on the resident’s behalf as a condition of admission to the facility shall be returned and the obligations and responsibilities of the resident or responsible party during the time period when the resident is covered by Medi-Cal shall be limited to the obligations and responsibilities provided for under the Medi-Cal program. In the event that the resident becomes ineligible for Medi-Cal coverage at any time subsequent to converting to Medi-Cal coverage, the resident and responsible party shall be bound by the terms of the original admission agreement, or any admission agreement in effect at the time the Medi-Cal coverage commenced. (e) When a resident on non-Medi-Cal status converts to Medi-Cal coverage, the facility shall make a reasonable attempt to assist the resident in contacting the county to obtain an estimate of the resident’s long-term care patient liability. (f) A resident and their agent shall pay to the facility the long-term care patient liability, for which they are responsible under the Medi-Cal program, unless otherwise exempted by law. (g) If a resident or their agent disputes the amount of the long-term care patient liability owed to a facility, the resident or agent may apply for a state hearing pursuant to Section 10950 for a determination of the amount owed to the facility. (h) Any agent who willfully violates the requirements of this section is guilty of a misdemeanor, and upon conviction thereof, shall be punished by a fine not to exceed two thousand five hundred dollars ($2,500) or by imprisonment in the county jail not to exceed 180 days, or both. (Amended by Stats. 2023, Ch. 42, Sec. 142. (AB 118) Effective July 10, 2023.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14110.9. No nursing facility or any category of intermediate care facility for the developmentally disabled may require a security deposit from a Medi-Cal beneficiary who applies for admission to the facility. (Amended by Stats. 1990, Ch. 1329, Sec. 21. Effective September 26, 1990.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14111. (a) As permitted by federal law or regulations, for health care services provided in a long-term health care facility that are reimbursed by Medicare, a physician and surgeon may delegate any of the following to a nurse practitioner: (1) Alternating visits required by federal law and regulations with a physician and surgeon. (2) Any duties consistent with federal law and regulations within the scope of practice of nurse practitioners, so long as all of the following conditions are met: (A) A physician and surgeon approves, in writing, the admission of the individual to the facility. (B) The medical care of each resident is supervised by a physician and surgeon. (C) A physician and surgeon performs the initial visit and alternate required visits. (b) This section does not authorize benefits not otherwise authorized by federal law or regulation. (c) All responsibilities delegated to a nurse practitioner pursuant to this section shall be performed under the supervision of the physician and surgeon and pursuant to a standardized procedure among the physician and surgeon, nurse practitioner, and facility. (d) No task that is required by federal law or regulation to be performed personally by a physician may be delegated to a nurse practitioner. (e) Nothing in this section shall be construed as limiting the authority of a long-term health care facility to hire and employ nurse practitioners so long as that employment is consistent with federal law and within the scope of practice of a nurse practitioner. (Amended by Stats. 1994, Ch. 646, Sec. 1. Effective January 1, 1995.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14111.5. (a) As permitted by federal law or regulations, for health care services provided in a long-term health care facility that are reimbursed under this chapter, a nurse practitioner may, to the extent consistent with his or her scope of practice, perform any of the following tasks otherwise required of a physician and surgeon: (1) With respect to visits required by federal law or regulations, making alternating visits, or more frequent visits if the physician and surgeon is not available. (2) Any duty or task that is consistent with federal and state law or regulation within the scope of practice of nurse practitioners, so long as all of the following conditions are met: (A) A physician and surgeon approves, in writing, the admission of the individual to the facility. (B) The medical care of each resident is supervised by a physician and surgeon. (C) A physician and surgeon performs the initial visit and alternate required visits. (b) This section does not authorize benefits not otherwise authorized by federal or state law or regulation. (c) All responsibilities undertaken by a nurse practitioner pursuant to this section shall be performed in collaboration with the physician and surgeon and pursuant to a standardized procedure among the physician and surgeon, nurse practitioner, and facility. (d) Except as provided in subdivisions (a) to (c), inclusive, any task that is required by federal law or regulation to be performed personally by a physician may be delegated to a nurse practitioner who is not an employee of the long-term health care facility. (e) Nothing in this section shall be construed as limiting the authority of a long-term health care facility to hire and employ nurse practitioners so long as that employment is consistent with federal law and with the scope of practice of a nurse practitioner. (Amended by Stats. 1995, Ch. 91, Sec. 186. Effective January 1, 1996.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14112. Health care provided pursuant to this chapter shall not constitute a lien against the property of any recipient or medically indigent or other person eligible under this chapter. (Amended by Stats. 1969, Ch. 21.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14113. The department shall enter into cooperative arrangements with the Department of Rehabilitation and any other state agency or department responsible for health or vocational rehabilitation services in the state to insure the appropriate utilization of such services in the provision of health care and related remedial services under this chapter. (Amended by Stats. 1973, Ch. 142.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14114. (a) This section shall be known, and may be cited, as Medi-Cal Physicians and Dentists Loan Repayment Program Act. (b) Notwithstanding any other law, the department shall develop and administer the Medi-Cal Physicians and Dentists Loan Repayment Program to provide loan assistance payments to qualifying, recent graduate physicians and dentists that serve beneficiaries of existing health care programs described in Chapter 7 (commencing with Section 14000) to Chapter 8.9 (commencing with Section 14700), inclusive. To implement this section, the department shall consult with other state entities, including the Department of Health Care Access and Information, and with affected stakeholders. (c) (1) The Medi-Cal Physicians and Dentists Loan Repayment Program shall be funded using moneys appropriated to the department for this purpose. (2) The Loan Repayment Program Account is hereby continued in the State Treasury within the Healthcare Treatment Fund established pursuant to Section 30130.55 of the Revenue and Taxation Code. The Loan Repayment Program Account shall contain funds appropriated by the Legislature from the Healthcare Treatment Fund to the Medi-Cal Physicians and Dentists Loan Repayment Program. Notwithstanding Section 13340 of the Government Code, the Loan Repayment Program Account is hereby continuously appropriated, without regard to fiscal year, to implement the Medi-Cal Physicians and Dentists Loan Repayment Program. (3) The Medi-Cal Loan Repayment Program Special Fund is hereby established in the State Treasury. The Medi-Cal Loan Repayment Program Special Fund shall contain funds transferred from the California Electronic Cigarette Excise Tax Fund pursuant to Section 31005 of the Revenue and Taxation Code, funds transferred pursuant to paragraph (2) of subdivision (c) of Section 14197.2, and any other moneys appropriated to the Medi-Cal Physicians and Dentists Loan Repayment Program other than funds appropriated from the Health Care Treatment Fund described in paragraph (2). The department and the State Controller’s office shall maintain separate subaccounts for funds appropriated or transferred from each funding source. Notwithstanding Section 13340 of the Government Code, the Medi-Cal Loan Repayment Program Special Fund is hereby continuously appropriated, without regard to fiscal year, to implement the Medi-Cal Physicians and Dentists Loan Repayment Program. (4) The department shall expend all funds available in the Loan Repayment Program Account of the Healthcare Treatment Fund prior to expending any funds from the Medi-Cal Loan Repayment Program Special Fund. (5) Within each fund and subaccount, the department shall administer two separate payment pools for participating physicians and dentists, respectively, consistent with the allocations provided for in Item 4260-102-3305 of the Budget Act of 2018, Item 4260-102-3305 of the Budget Act of 2019, Section 31005 of the Revenue and Taxation Code, and paragraph (2) of subdivision (c) of Section 14197.2. (6) Moneys appropriated to the department to implement this section shall be available to fund the administrative costs incurred by the department and any entity contracted with pursuant to subdivision (g). Administrative costs from the Loan Repayment Program Account of the Healthcare Treatment Fund are limited by subdivision (f) of Section 30130.57 of the Revenue and Taxation Code. (d) The department shall develop the eligibility criteria to be used to evaluate physician and dentist participation in the Medi-Cal Physicians and Dentists Loan Repayment Program. In developing these criteria, the department shall prioritize ensuring timely access, limiting geographic shortages of services, and ensuring quality care in the Medi-Cal program. The department shall develop separate criteria for distribution of payments from the physician and dentist payment pools. At a minimum, the department shall establish the maximum number of years a physician or dentist may be in practice to qualify for payments pursuant to this section, and the minimum number of years a participating physician or dentist receiving payments pursuant to this section shall agree to participate as an enrolled provider in the Medi-Cal program. (e) The selection of physicians and dentists for participation in the Medi-Cal Physicians and Dentists Loan Repayment Program and the amount of loan repayment assistance awarded to a participating physician or dentist shall be at the discretion of the department and any entity contracted with pursuant to subdivision (g), and shall be based on the criteria developed pursuant to subdivision (d). An exercise of discretion by the department and its contractors pursuant to this subdivision shall not be subject to judicial review, except that an applicant physician or dentist who is not selected for participation in the program may file for a writ of mandate pursuant to Section 1085 of the Code of Civil Procedure to rectify an abuse of discretion by the department and its contractors. (f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of policy letters, provider bulletins, or other similar instructions, without taking regulatory action. The department shall consult with affected stakeholders before taking action pursuant to this subdivision. (g) To implement this section, the department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis. Contracts entered into or amended pursuant to this subdivision shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and the review or approval of a division of the Department of General Services. (h) This section shall be implemented only to the extent that the department determines that federal financial participation under the Medi-Cal program is not jeopardized. If the department determines there is a reasonable likelihood that federal financial participation is available for expenditures pursuant to this section, it may seek the federal approvals necessary to obtain federal financial participation. (i) The Legislature finds and declares that the expenditures authorized by paragraph (2) of subdivision (c) are all of the following: (1) Made in accordance with the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (Article 2 (commencing with Section 30121) of Chapter 2 of Part 13 of Division 2 of the Revenue and Taxation Code). (2) Based on criteria developed and periodically updated as part of the annual budget process in accordance with subdivision (a) of Section 30130.55 of the Revenue and Taxation Code. (3) Consistent with the purposes and conditions for expenditures described in subdivision (a) of Section 30130.55 of the Revenue and Taxation Code. (j) The Legislature finds and declares that this section is a state law within the meaning of Section 1621(d) of Title 8 of the United States Code. (Amended by Stats. 2022, Ch. 46, Sec. 6. (AB 186) Effective June 30, 2022. Conditionally inoperative as prescribed by Stats. 2018, Ch. 47, Sec. 4.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14115. (a) Bills for service under this chapter shall be submitted not more than six months after the month in which the service is rendered, and shall be in the form prescribed by the director, except that in the event the patient does not identify himself or herself to the provider as a Medi-Cal beneficiary within four months after the month in which the service was rendered, the provider shall be entitled to submit his or her statement at any time within 60 days after that date certified by the provider as the date the patient was first identified as a Medi-Cal beneficiary. However, the date certified by the provider as the date the patient was first so identified shall not be later than one year after the month in which the service was rendered. Whenever a provider has submitted a claim to a liable third party, the provider shall have one year after the month in which the service is rendered for submission of the bill. Whenever a legal proceeding has been commenced with either an administrative or judicial tribunal concerning a bill for which the provider is attempting to obtain payment from a liable third party, the provider shall have one year in which to submit the bill after the month in which the services have been rendered. A copy of the pleadings shall be conclusively presumed to be sufficient evidence of commencement of a legal proceeding. (b) The director may, where he or she finds that delay in the submission of bills was caused by circumstances beyond the control of the provider, extend the period for submission of bills for a period not to exceed one year. (c) (1) Reimbursement for an original claim, submitted for payment between 6 and 12 months after the month of service, that does not meet any of the exceptions allowing billing after six months as specified in subdivisions (a) and (b), or the exception specified in subdivision (f), shall be reduced as follows: (A) The amount otherwise payable by Medi-Cal shall be reduced by 25 percent for claims submitted during the seventh through the ninth month after the month of service. (B) The amount otherwise payable by Medi-Cal shall be reduced by 50 percent for claims submitted during the 10th through the 12th month after the month of service. (2) The director may establish exceptions through regulations, for claims submitted beyond the one-year billing limitation, to the extent full federal participation is available. (3) The reductions specified in paragraph (1) shall not apply to a Medi-Cal program for which there is no state General Fund match, including, but not limited to, the Local Educational Agency (LEA) Medi-Cal Billing Option program and the Targeted Case Management (TCM) program. (d) For the purposes of this section, identification of a patient as a Medi-Cal beneficiary shall mean presentation to the provider of the patient’s Medi-Cal card. (e) No further followup shall be required, after the provider receives acknowledgment of a claim inquiry from the fiscal intermediary, until the claim is paid or denied, except that this period shall not exceed one year from the date of acknowledgment. Within one year from the date of acknowledgment the next level of appeal shall be utilized by the provider. (f) To the extent permitted by federal law, when a state of emergency has been declared by either the President of the United States or the Governor, the director, in order to ensure continued access to health care services, may remit payment for services without the submission of required documentation, to any provider in good standing under the Medi-Cal program who, due to destruction, loss, or inaccessibility of data as a result of the emergency situation, is unable to submit claims. Emergency payments may be made for a period of up to six months from the date of the emergency declaration. All requests for emergency payment shall include adequate justification for payment, as required by the director, and shall be paid based on the previous claims history of the requesting provider held by the department. (Amended by Stats. 2007, Ch. 130, Sec. 248. Effective January 1, 2008.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14115.1. The department may not require that any hospital based physician submit a combined charge, which includes the physician and hospital charge, if it is not the customary practice of such physician to submit a combined charge. The physician’s right to bill independently shall be respected by the department; provided, however, this shall not prevent the department from enacting reasonable regulations to insure that the total charges, when a hospital and physician bill separately, do not exceed the total charge when both bill for the same services in a combined charge. (Amended by Stats. 1974, Ch. 546.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14115.2. (a) The department shall not require nursing facilities or any category of intermediate care facility for the developmentally disabled, as defined in Section 1250 of the Health and Safety Code to originate monthly bills for beneficiaries if the following conditions are met: (1) A claim on which inpatient per diem days have been billed by the provider is received by the fiscal intermediary by the fifth working day of the month following the month being billed; and (2) The claim received by the fiscal intermediary does not show a patient status code that indicates discharge or death on the last day billed for the recipient for that month. (b) When the conditions listed above are met, the fiscal intermediary shall, by the 20th of the month, mail to the provider a preimprinted claim to cover the current month’s services to those beneficiaries. (c) The provider shall be required to check the preimprinted claim for accuracy, to make corrections, and to certify that the beneficiaries who are listed on the claim received the services listed. (d) The preimprinted claim shall be returned in the manner required by Section 14115; provided, the preimprinted claim shall be deemed a late submission no earlier than six months following the end of the month of service being billed. (e) Except as otherwise provided in this section, the rights and duties of providers and the department with respect to the billing procedures hereby established shall be governed by the provisions of this chapter. (Amended by Stats. 1990, Ch. 1329, Sec. 22. Effective September 26, 1990.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14115.3. The department shall permit a nurse anesthetist to bill independently for services rendered by such nurse anesthetist. If a nurse anesthetist chooses to bill independently for such services, the department shall make the payment for the services directly to the nurse anesthetist. (Added by Stats. 1974, Ch. 1374.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14115.4. If the Budget Act should in any budget year restrict payment for pathology services under the Medi-Cal program to only the provider who actually performs those services, this restriction shall not prohibit any of the following: (a) Reimbursement of a hospital for pathology services performed by an outside reference laboratory for hospital patients. (b) Reimbursement of a clinical laboratory for performance of pathology services that are referred to another clinical laboratory. (c) Reimbursement of a clinical laboratory when pathology services are performed at a different testing location owned and operated by the same clinical laboratory. Services provided pursuant to subdivision (a), (b), or (c) shall be reimbursed in accordance with the rules and regulations of the department. (Added by Stats. 1983, Ch. 960, Sec. 5.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14115.41. (a) For services that are performed at a central laboratory as authorized pursuant to Section 1241.1 of the Business and Professions Code, the department shall provide reimbursement directly to the laboratory performing the services and submitting the claim for reimbursement. Nothing in this section shall prohibit a primary care clinic network that utilizes centralized billing from submitting claims on the behalf of the network’s central laboratory, if the claims are submitted with the central laboratory’s provider number. The department shall not deny payment to a laboratory created pursuant to Section 1241.1 of the Business and Professions Code, for either of the following reasons: (1) The clinic and the licensed central laboratory performing the services are owned and operated by the same nonprofit corporation with the same board of directors and the same corporate officers. (2) The laboratory services are performed on a specimen collected at the clinic for a clinic patient. (b) Nothing in this section shall be construed to allow a primary care clinic to submit a separate claim for central laboratory services currently reimbursed under the Medi-Cal program, utilizing the primary care clinic’s provider number. (c) The department may implement utilization controls or other cost-control measures to ensure that medically necessary services are appropriately rendered. (d) (1) A primary care clinic licensed pursuant to subdivision (a) of Section 1204 of the Health and Safety Code that is affiliated with a network of primary care clinics may continue to submit claims for the laboratory services provided until such time that the primary care clinic receives a provider number for the central laboratory pursuant to this section, if all of the following requirements are met: (A) The network of primary care clinics is operated by the same nonprofit corporation with the same board of directors and corporate officers. (B) The primary care clinic operates under the same procedures and protocols as the affiliated clinics in the network, and the laboratory holds a valid Clinical Laboratory Improvement Amendments of 1988 (42 U.S.C. 263a) (CLIA) certificate and state laboratory license to perform moderate and high complexity laboratory services. (C) The of primary care clinic has been providing laboratory testing services for the patients of the primary care clinic within the clinic network prior to August 1, 2006, and has been authorized by Medi-Cal to submit claims for those services. (2) This subdivision shall remain operative until June 30, 2007. (Added by Stats. 2006, Ch. 795, Sec. 3. Effective January 1, 2007.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14115.5. Moneys payable or rights existing under this chapter shall be subject to any claim, lien or offset of the State of California, and any claim of the United States of America made pursuant to federal statute, but shall not otherwise be subject to enforcement of a money judgment or other legal process, and no transfer or assignment, at law or in equity, of any right of a provider of health care to any payment shall be enforceable against the state, a fiscal intermediary or carrier. (Amended by Stats. 1982, Ch. 497, Sec. 183. Operative July 1, 1983, by Sec. 185 of Ch. 497.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14115.7. (a) The department, with the assistance of the Controller, shall develop a procedure by which approved claims for services rendered may be reimbursed through a means of electronic transfer of funds to designated providers of services. (b) The department shall make the electronic transfer of funds for the payment of approved claims for services rendered pursuant to this chapter available to all interested parties for a reasonable initial fee, and an annual subscription fee for system updating, maintenance, and support services provided to users. (c) The department shall charge fees pursuant to subdivision (b) in an amount which shall recover, as nearly as possible, the cost of provider enrollment, bank transaction charges, and ongoing net support costs for maintenance of the electronic transfer system. (d) The department shall, in charging fees pursuant to subdivision (b), adjust those fees by the amount of any administrative savings due to the implementation of this section. (Added by Stats. 1990, Ch. 374, Sec. 1.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14115.75. (a) As a condition of payment for goods, supplies, and merchandise provided to Medi-Cal beneficiaries by a provider that receives or makes annual payments of at least five million dollars ($5,000,000) under the Medi-Cal program, the provider shall comply with the federal False Claims Act employee training and policy requirements contained in Section 1902(a) of the federal Social Security Act (42 U.S.C. Sec. 1396a(a)(68)), and with any requirements that the United States Secretary of Health and Human Services may specify. The calculation of the five million dollar ($5,000,000) threshold shall be based on federal law and regulations and guidance from the United States Secretary of Health and Human Services. (b) For purposes of this section, “provider” has the same meaning as that term is defined in Section 14043.1, and also includes any Medi-Cal managed care plan authorized under this chapter, Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591). (Amended by Stats. 2011, Ch. 367, Sec. 13. (AB 574) Effective January 1, 2012.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14115.8. (a) (1) The department shall amend the Medicaid state plan with respect to the billing option for services by local educational agencies (LEAs), to ensure that schools shall be reimbursed for all eligible services that they provide that are not precluded by federal requirements. (2) The department shall examine methodologies for increasing school participation in the Medi-Cal Billing Option for LEAs so that schools can meet the health care needs of their students. (3) The department, to the extent possible, shall simplify claiming processes for LEA billing. (4) The department shall eliminate and modify state plan and regulatory requirements that exceed federal requirements when they are unnecessary. (5) (A) The department shall, in consultation with the LEA Ad Hoc Workgroup established pursuant to subdivision (c), and consistent with any applicable federal requirements, issue and regularly maintain a program guide for the LEA Medi-Cal Billing Option program. The program guide shall contain a billing manual that includes, but is not limited to, an explanation of billing, auditing, costs reporting, time studies, federal and state compliance rules, fiscal and programmatic compliance information regarding processes, documentation, and guidance necessary for the proper submission of claims, and auditing of LEAs, charter schools, and community colleges, as required under the LEA Medi-Cal Billing Option program. (B) The program guide described in subparagraph (A) shall include, but not be limited to, state plan amendments, Frequently Asked Questions, policy and procedure letters, a plain language explanation of the certified public expenditure processes used to report and reconcile program costs from interim reimbursement to final cost settlement, trainings, provider manuals, and all other types of instructional materials relevant to the LEA Medi-Cal Billing Option program. (C) (i) The department shall distribute the program guide to all participating LEAs, charter schools, and community colleges by January 1, 2020. Distribution of the program guide may occur by electronic mail or by notification by electronic mail of the posting of the guide on the department’s internet website. (ii) The department shall distribute an updated program guide to all participating LEAs, including charter schools and community colleges, by July 1, 2024, that includes the requirements described in subparagraphs (A) and (B). The department may distribute the program guide by electronic mail or by notification by electronic mail of the posting of the guide on the department’s internet website. (D) The department shall only adopt a revision of the program guide after providing 30 calendar days’ written notification of the revision, including a statement of justification, to the LEA Ad Hoc Workgroup and all other participating LEAs, charter schools, and community colleges. The department may provide written notice by electronic mail. Under extraordinary circumstances, when revisions are necessary to reflect changes required by state or federal law or otherwise mandated by the federal Centers for Medicare and Medicaid Services and those changes require immediate action, the department may provide less than 30 calendar days’ written notice. (b) The department shall conduct an audit of a Medi-Cal Billing Option claim consistent with, but not limited to, all of the following: (1) (A) The program guide and any revisions made pursuant to paragraph (5) of subdivision (a), including any revisions that are necessary to reflect changes required by state or federal law or otherwise mandated by the federal Centers for Medicare and Medicaid Services, that are in effect at the time the service was provided. (B) Generally accepted accounting principles. (C) Federal audit regulations, as set forth in Part 200 (commencing with Section 200.0) of Title 2 of the Code of Federal Regulations (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), or its successor. (D) Reasonable cost principles under the federal Medicare Program, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successor. (E) The federal Centers for Medicare and Medicaid Services Provider Reimbursement Manual Part 1 (CMS Publication 15-1). (F) Any and all applicable federal or state statutes and regulations. (2) (A) The department shall complete an audit and notify an LEA of the audit findings within 18 months of the date that the Cost and Reimbursement Comparison Schedule (CRCS) is submitted. This timeline may be extended by no more than three months upon a determination that the LEA has not provided sufficient documentation as requested by the auditor. (B) The department shall provide an interim settlement or final settlement of the Medi-Cal share of each LEA’s costs within 12 months of the March 1 due date of the CRCS. (C) When a final settlement is not issued within 12 months of the March 1 due date, the department shall complete final settlement no later than 18 months after the date that the CRCS is submitted. (D) LEAs shall be reimbursed for all eligible services that meet federal requirements. (3) For purposes of this subdivision, an audit shall refer to the audit and cost recovery process described in Section 14170. (c) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may issue and regularly maintain the program guide described in this section without taking regulatory action. (d) If a rate study for the LEA Medi-Cal Billing Option is completed pursuant to Section 52 of Chapter 171 of the Statutes of 2001, the department, in consultation with the entities named in paragraph (1) of subdivision (e), shall implement the recommendations from the study, to the extent feasible and appropriate. (e) (1) In order to assist the department in formulating the state plan amendments required to implement this section, the department shall regularly consult with the LEA Ad Hoc Workgroup, consisting of, but not limited to, representatives of the State Department of Education, LEAs, including urban, rural, large and small school districts, and county offices of education, and local education consortia. It is the intent of the Legislature that the department also consult with staff from Region IX of the federal Centers for Medicare and Medicaid Services, experts from the fields of both health and education, and state legislative staff. (2) The department shall ensure that any LEA participating in the Medi-Cal Billing Option program may participate virtually in any trainings or stakeholder meetings, including those meetings conducted pursuant to paragraph (1). (f) Notwithstanding any other law, or any other contrary state requirement, the department shall take whatever action is necessary to ensure that, to the extent there is capacity in its certified match, an LEA shall be reimbursed retroactively for the maximum period allowed by the federal government for any department change that results in an increase in reimbursement to LEA providers. (g) The department may undertake all necessary activities to recoup matching funds from the federal government for reimbursable services that have already been provided in the state’s public schools. The department shall prepare and take whatever action is necessary to implement all regulations, policies, state plan amendments, and other requirements necessary to achieve this purpose. (h) The department shall, on or before December 31 of each year, file with the Legislature, and publish on its internet website, an annual report that shall include at least all of the following: (1) A copy of the annual comparison required by subdivision (m). (2) A state-by-state comparison of school-based Medicaid total and per eligible child claims and federal revenues. The comparison shall include a review of the most recent two years for which completed data is available. (3) A summary of department activities, including training for LEAs, and an explanation of how each activity contributed toward narrowing the gap between California’s per eligible student federal fund recovery and the per student recovery of the top three states. (4) A listing of all school-based services, activities, and providers approved for reimbursement by the federal Centers for Medicare and Medicaid Services in other state plans that are not yet approved for reimbursement in California’s state plan and the service unit rates approved for reimbursement. (5) The official recommendations made to the department by the entities named in subdivision (e) and the action taken by the department regarding each recommendation. (6) A one-year timetable for state plan amendments and other actions necessary to obtain reimbursement for those items listed in paragraph (4). (7) Identification of any barriers to LEA reimbursement, including those specified by the entities named in subdivision (e), that are not imposed by federal requirements, and a description of the actions that have been, and will be, taken to eliminate them. (8) (A) A statewide summary of financial findings related to the process identified in the program guide for the most recently completed audited state fiscal year. The summary of findings shall be updated in subsequent years until all filed CRCS reports have been audited. (B) For purposes of subparagraph (A), the “most recently completed audited state fiscal year” means the most recent state fiscal year where 70 percent or more of the filed CRCSs have been audited. (C) A description of changes to the cost settlement process that shall include all of the following: (i) A summary of the number of audits conducted of Medi-Cal Billing Option program CRCSs. (ii) A summary of the difference between interim reimbursement and the CRCSs. (iii) A summary related to audit findings of noncompliance. (i) The department shall provide semiannual Medi-Cal Billing Option billing forums to LEAs to provide guidance on appropriate billing practices. (j) The department shall make targeted technical assistance available to LEAs that experience a 25 percent or greater difference between their submitted cost report and the final audited settlement, including assisting LEAs to understand the actions needed to reduce differences between submitted cost reports and the final audited settlement. (k) (1) The department’s administration of the LEA Medi-Cal Billing Option program shall be funded and staffed by proportionately reducing federal Medicaid payments allocable to LEAs for the provision of benefits funded by the federal Medicaid program under the billing option for services by LEAs. Moneys collected as a result of the reduction in federal Medicaid payments allocable to LEAs shall be deposited into the Local Educational Agency Medi-Cal Recovery Fund, which is hereby established in the Special Deposit Fund established pursuant to Section 16370 of the Government Code. These funds shall be used, upon appropriation by the Legislature, only to support the department to meet all the requirements of administering the LEA Medi-Cal Billing Option program. If at any time this section is repealed, it is the intent of the Legislature that all funds in the Local Educational Agency Medi-Cal Recovery Fund be returned proportionally to all LEAs whose federal Medicaid funds were used to create this fund. The annual amount withheld pursuant to this paragraph shall not exceed 5 percent of total Medicaid payments allocable to LEAs for the provision of benefits funded by the federal Medicaid program under the billing option for services by LEAs. (2) Moneys collected under paragraph (1) shall be proportionately reduced from federal Medicaid payments to all participating LEAs so that no one LEA loses a disproportionate share of its federal Medicaid payments. (l) (1) The department may enter into a sole source contract to comply with the requirements of this section. (2) The level of additional staff to comply with the requirements of this section, including, but not limited to, staff for which the department has contracted for pursuant to paragraph (1), shall be limited to that level that can be funded with revenues derived pursuant to subdivision (i). (m) The activities of the department shall include all of the following: (1) An annual comparison of the school-based Medicaid systems in comparable states. (2) Efforts to improve communications with the federal government, the State Department of Education, and LEAs. (3) The development and updating of written guidelines to LEAs regarding best practices to avoid audit exceptions, as needed. (4) The establishment and maintenance of an LEA user-friendly, interactive internet website. (5) Collaboration with the State Department of Education to help ensure LEA compliance with state and federal Medicaid requirements and to help improve LEA participation in the Medi-Cal Billing Option for LEAs. (Amended by Stats. 2024, Ch. 492, Sec. 17. (SB 1511) Effective January 1, 2025.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14116. The director of a county agency which administers the provisions of this chapter and also administers medical facilities may not delegate to an employee the decision to authorize or deny aid under this chapter, if he has also delegated authority to that employee to operate or participate in the operation of any such medical facility. (Added by Stats. 1965, 2nd Ex. Sess., Ch. 4.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14117. Information relating to the medication provided to Medi-Cal recipients, shall be disclosed by the department or its agents, to physicians who are treating those same recipients as patients, upon request of the treating physician. (Added by Stats. 1978, Ch. 1327.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14119. The director shall employ sufficient consultants to assure compliance with the provisions of this code and the regulations, and the protection of the best interests of the state, and no county shall employ such consultants. However, if the director finds that it is not reasonable in specific cases to transfer to state employment a consultant employed by a county and that the consultant function is being performed according to statewide standards, he may authorize the county to continue to provide that particular consultant service. As used in this section, a “consultant” means a person who reviews the procedures, charges and services of providers under this chapter, and who grants prior authorizations to providers. (Amended by Stats. 1969, Ch. 21.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14120. (a) At the beginning of each fiscal year, for the current fiscal year, the director shall establish a monthly schedule of anticipated total payments and anticipated payments for categories of services, according to the categories established in the Governor’s Budget. The schedule will be revised quarterly. (b) The director shall report actual total payments and payments for categories of services, as set forth in subdivision (a), monthly to the Director of Finance and to the Joint Legislative Budget Committee. (c) At any time during the fiscal year, if the director has reason to believe that the total cost of the program will exceed available funds, the director may first modify the method or amount of payment for services provided that no amount shall be reduced more than 10 percent and no modification will conflict with federal law. If such modification is not sufficient to bring the program within available funds, the director may postpone elective services in the schedule of benefits. Such postponement of elective services shall be accomplished by changing the standards for approval of requests for prior authorizations. Such changes shall be designed to insure that those recipients most in need of elective services receive them first within the funds available, but that no particular service is completely eliminated. (d) At any time during the fiscal year, if the total amounts paid since the beginning of the fiscal year exceed by 10 percent the amounts scheduled, the director shall immediately institute the action set forth in subdivision (c). (e) At any time during the fiscal year, if the total amounts paid for any category of service exceeds by 10 percent the amounts scheduled (other than services for which the method or amount of payment is prescribed by the United States Secretary of Health and Human Services pursuant to Title XIX of the federal Social Security Act), the director shall modify the method or amount of payment for such category of service to assure that the total amount paid for such category of service in the fiscal year shall be less than 10 percent in excess of the total amount scheduled provided the total cost of the program to the State General Fund shall not exceed appropriated state general funds. (f) Before any of the above actions are taken by the director, he or she shall consult with representatives of concerned provider groups. (g) Notwithstanding subdivision (c) or (e), the director shall not reduce the amount of payment, under the circumstances described in subdivision (c) or (e), for the ingredient cost component of pharmaceutical services rendered by pharmacist providers in California. (Amended by Stats. 1988, Ch. 1444, Sec. 1. Effective September 28, 1988.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14122. The department may provide, by regulation and consistent with the requirements of the Federal Social Security Act, for the care and treatment, or both, of persons eligible for medical assistance pursuant to Sections 14005.1, 14005. 4, and 14005.7 by providers in another state in those cases where out-of-state care or treatment is rendered on an emergency basis or is otherwise in the best interests of the person under the circumstances. (Amended by Stats. 1977, Ch. 1252.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14123. Participation in the Medi-Cal program by a provider of service is subject to suspension in order to protect the health of the recipients and the funds appropriated to carry out this chapter. (a) (1) The director may suspend a provider of service from further participation under the Medi-Cal program for violation of any provision of this chapter or Chapter 8 (commencing with Section 14200) or any rule or regulation promulgated by the director pursuant to those chapters. The suspension may be for an indefinite or specified period of time and with or without conditions, or may be imposed with the operation of the suspension stayed or probation granted. The director shall suspend a provider of service for conviction of any felony or any misdemeanor involving fraud, abuse of the Medi-Cal program or any patient, or otherwise substantially related to the qualifications, functions, or duties of a provider of service. (2) If the provider of service is a clinic, group, corporation, or other association, conviction of any officer, director, or shareholder with a 10 percent or greater interest in that organization, of a crime described in paragraph (1) shall result in the suspension of that organization and the individual convicted if the director believes that suspension would be in the best interest of the Medi-Cal program. If the provider of service is a political subdivision of the state or other government agency, the conviction of the person in charge of the facility of a crime described in paragraph (1) may result in the suspension of that facility. The record of conviction or a certified copy thereof, certified by the clerk of the court or by the judge in whose court the conviction is had, shall be conclusive evidence of the fact that the conviction occurred. A plea or verdict of guilty, or a conviction following a plea of nolo contendere is deemed to be a conviction within the meaning of this section. (3) After conviction, but before the time for appeal has elapsed or the judgment of conviction has been affirmed on appeal, the director, if they believe that suspension would be in the best interests of the Medi-Cal program, may order the suspension of a provider of service. When the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal or when an order granting probation is made suspending the imposition of sentence irrespective of any subsequent order under Section 1203.4 of the Penal Code allowing a person to withdraw their plea of guilty and to enter a plea of not guilty, or setting aside the verdict of guilty, or dismissing the accusation, information, or indictment, the director shall order the suspension of a provider of service. The suspension shall not take effect earlier than the date of the director’s order. Suspension following a conviction is not subject to the proceedings required in subdivision (c). However, the director may grant an informal hearing at the request of the provider of service to determine in the director’s sole discretion if the circumstances surrounding the conviction justify rescinding or otherwise modifying the suspension provided for in this subdivision. (4) If the provider of service appeals the conviction and the conviction is reversed, the provider may apply for reinstatement to the Medi-Cal program after the conviction is reversed. Notwithstanding Section 14124.6, the application for reinstatement shall not be subject to the one-year waiting period for the filing of a reinstatement petition pursuant to Section 11522 of the Government Code. (b) (1) Whenever the director receives written notification from the Secretary of the United States Department of Health and Human Services that a physician or other individual practitioner has been suspended from participation in the Medicare or Medicaid programs, the director shall promptly suspend the practitioner from participation in the Medi-Cal program and notify the Administrative Director of the Division of Workers’ Compensation of the suspension, in accordance with paragraph (2) of subdivision (e). This automatic suspension is not subject to the proceedings required in subdivision (c). No payment from state or federal funds may be made for any item or service rendered by the practitioner during the period of suspension. (2) If the practitioner suspended from participation in the Medicare Program or Medicaid program is a participant in the Medi-Cal program, the director may request a waiver as permitted by federal law, including, but not limited to, Section 1320a-7(d)(3)(B)(i) of Title 42 of the United States Code if the suspension was based solely on conduct that is not deemed to be unprofessional conduct under California law. The department shall seek any federal approvals it deems necessary to implement this paragraph. This paragraph shall be implemented only to the extent that the department obtains any necessary federal approvals and federal financial participation under the Medi-Cal program is available and not otherwise jeopardized. (3) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific paragraph (2), in whole or in part, by means of plan or county letters, information notices, plan or provider bulletins, or similar written instructions. (c) The proceedings for suspension shall be conducted pursuant to Section 100171 of the Health and Safety Code. The director may temporarily suspend any provider of service prior to any hearing when in their opinion that action is necessary to protect the public welfare or the interests of the Medi-Cal program. The director shall notify the provider of service of the temporary suspension and the effective date thereof and at the same time serve the provider with an accusation. The accusation and all proceedings thereafter shall be in accordance with Section 100171 of the Health and Safety Code. Upon receipt of a notice of defense by the provider, the director shall set the matter for hearing within 30 days after receipt of the notice. The temporary suspension shall remain in effect until such time as the hearing is completed and the director has made a final determination on the merits. The temporary suspension shall, however, be deemed vacated if the director fails to make a final determination on the merits within 60 days after the original hearing has been completed. This subdivision does not apply where the suspension of a provider is based upon the conviction of any crime involving fraud, abuse of the Medi-Cal program, or suspension from the federal Medicare Program. In those instances, suspension shall be automatic. (d) (1) The suspension by the director of any provider of service shall preclude the provider from submitting claims for payment, either personally or through claims submitted by any clinic, group, corporation, or other association to the Medi-Cal program for any services or supplies the provider has provided under the program, except for services or supplies provided prior to the suspension. No clinic, group, corporation, or other association which is a provider of service shall submit claims for payment to the Medi-Cal program for any services or supplies provided by a person within the organization who has been suspended or revoked by the director, except for services or supplies provided prior to the suspension. (2) If the provisions of this chapter, Chapter 8 (commencing with Section 14200), or the regulations promulgated by the director are violated by a provider of service that is a clinic, group, corporation, or other association, the director may suspend the organization and any individual person within the organization who is responsible for the violation. (e) (1) Notice of the suspension shall be sent by the director to the provider’s state licensing, certifying, or registering authority, along with the evidence upon which the suspension was based. (2) At the same time notice is provided pursuant to paragraph (1), the director shall provide written notification of the suspension to the Administrative Director of the Division of Workers’ Compensation, for purposes of Section 139.21 of the Labor Code. (f) In addition to the bases for suspension contained in subdivisions (a) and (b), the director may suspend a provider of service from further participation under the Medi-Cal dental program for the provision of services that are below or less than the standard of acceptable quality, as established by the California Dental Association Guidelines for the Assessment of Clinical Quality and Professional Performance, Copyright 1995, Third Edition, as periodically amended. The suspension shall be subject to the requirements contained in subdivisions (a) to (e), inclusive. (Amended by Stats. 2023, Ch. 261, Sec. 5. (SB 487) Effective January 1, 2024.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14123.05. The department shall develop, in consultation with provider representatives, including, but not limited to, physician, pharmacy, and medical supplies providers, a process that enables a provider to meet and confer with the appropriate department officials after the issuance of a letter notifying the provider of a payment suspension, pursuant to Section 14107.11, or a temporary suspension, pursuant to subdivision (a) of Section 14043.36, for the purpose of presenting and discussing information and evidence that may impact the department’s decision to modify or terminate the sanction. (Amended by Stats. 2012, Ch. 797, Sec. 25. (SB 1529) Effective January 1, 2013.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14123.1. Subdivision (a) of Section 14123 as added by Section 2 of Chapter 994 of the Statutes of 1969 does not constitute a change in, but is declaratory of, the preexisting law, and shall be construed merely as providing a specific statutory basis for suspension. (Added by Stats. 1976, Ch. 504.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14123.2. Any provider or person that presents or causes to be presented a claim for services to an officer, employee, or agent of the state, or of any department or agency thereof as defined in appropriate state law, that the director determines is for a medical or other item or service that the person knows or has reason to know; (a) was not provided as claimed, or (b) payment for which may not be made under the program in the following instances: (1) when the person or provider has been suspended from participation in the program, or (2) when the department determines that the services or items claimed are substantially in excess of the needs of individuals or are of a quality that fails to meet professionally recognized standards of health care, or (3) when the department determines that a person has demonstrated a pattern of abusive overbilling of the program, or (4) when the department determines that a person has intentionally or negligently made a false statement or representation on any request for payment submitted to the Medi-Cal program; or (c) is submitted in violation of an agreement between the person and the state, shall be subject in addition to any other penalties that may be prescribed by law, to a civil money penalty of not more than three times the amount claimed for each item or service. For continuing intentional violations, a civil money penalty of not more than three times the amount claimed for each item or service may be imposed for each day the violation continues. The director shall make the determination to assess civil money penalties and shall be responsible for the collection of the penalty amounts. The provider or person subjected to a civil money penalty may appeal any decision by the director to assess the penalty pursuant to Section 100171 of the Health and Safety Code. Notwithstanding any other provisions of law, all money collected pursuant to this section shall be deposited in the General Fund on a monthly basis. (Amended by Stats. 1997, Ch. 220, Sec. 37. Effective August 4, 1997.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14123.25. (a) In lieu of, or in addition to, the imposition of any other sanction available to it, including the sanctions and penalties authorized under Section 14123.2 or 14171.6, and as the “single state agency” for California vested with authority to administer the Medi-Cal program, the department shall exercise the authority granted to it in Section 1002.2 of Title 42 of the Code of Federal Regulations, and may also impose the mandatory and permissive exclusions identified in Section 1128 of the federal Social Security Act (42 U.S.C. Sec. 1320a-7), and its implementing regulations, and impose civil penalties identified in Section 1128A of the federal Social Security Act (42 U.S.C. Sec. 1320a-7a), and its implementing regulations, against applicants and providers, as defined in Section 14043.1, or against billing agents, as defined in Section 14040.1. The department may also terminate, or refuse to enter into, a provider agreement authorized under Section 14043.2 with an applicant or provider, as defined in Section 14043.1, upon the grounds specified in Section 1866(b)(2) of the federal Social Security Act (42 U.S.C. Sec. 1395cc(b)(2)). Notwithstanding Section 100171 of the Health and Safety Code or any other provision of law, any appeal by an applicant, provider, or billing agent of the imposition of a civil penalty, exclusion, or other sanction pursuant to this subdivision shall be in accordance with Section 14043.65, except that where the action is based upon a conviction for any crime involving fraud or abuse of the Medi-Cal, Medicaid, or Medicare programs, or an exclusion by the federal government from the Medicaid or Medicare programs, the action shall be automatic and not subject to appeal or hearing. (b) In addition, the department may impose the intermediate sanctions identified in Section 1846 of the Social Security Act (42 U.S.C. Sec. 1395w-2), and its implementing regulations, against any provider that is a clinical laboratory, as defined in Section 1206 of the Business and Professions Code. The imposition and appeal of this intermediate sanction shall be in accordance with Article 8 (commencing with Section 1065) of Chapter 2 of Division 1 of Title 17 of the California Code of Regulations. (c) (1) In addition, the department may issue a written warning notice of improper billing or improper cost report computation, which shall specifically identify the statute, regulation, or rule that is being violated, to a provider via certified mail, return receipt requested, whenever a review of the provider’s paid claims or a provider’s cost report demonstrates a pattern of improper billing or improper cost report computation. The review shall not take into account claims that were denied or payment reductions. The warning notice shall be in a format that specifically apprises the provider of the item or service improperly billed and, if applicable, the deficiencies in the manner in which provider costs were computed. The warning notice may be issued with annual cost report audit findings, or in addition to any audit or any other action that the department is authorized to take. The failure of the department to exercise its discretion to issue the warning notice shall not limit its authority to audit or take any action authorized by law. The warning notice shall provide the provider with the opportunity to contest the warning notice and explain to the department the correctness of the provider’s bill or cost report computation. If the department accepts the provider’s explanation, in whole or in part, no further action related to the notice or part of the notice that the department accepts as correct shall be taken pursuant to this section. (2) Civil money penalties may be imposed in the following circumstances: (A) If a provider presents or causes to be presented claims for payment by the Medi-Cal program that are: (i) Billed improperly, and are for a service or item about which the provider has received two or more warning notices of improper billing, the provider may, in addition to any other penalties that may be prescribed by law, be subject to a civil money penalty of one hundred dollars ($100) per claim, or up to two times the amount improperly claimed for each item or service, whichever is greater. (ii) For a service or item for which the department solicits provider costs for use in calculating Medi-Cal reimbursement or in calculating and assigning Medi-Cal reimbursement rates, the cost reports relevant to the claims are improperly calculated, and the provider has received two or more warning notices of improper cost report computation regarding substantially similar errors, the provider may, in addition to any other penalties that may be prescribed by law, be subject to a civil money penalty of one hundred dollars ($100) per adjustment by the department to the costs submitted by the provider, or up to two times the amount improperly claimed for each item or service, whichever is greater. (B) If a provider presents or causes to be presented claims for payment by the Medi-Cal program that are: (i) Billed improperly, and are for a service or item about which the provider has received three or more warning notices of improper billing, or has been assessed a penalty under subparagraph (A), the provider may, in addition to any other penalties that may be prescribed by law, be subject to a civil money penalty of one thousand dollars ($1,000) per claim, or up to three times the amount improperly claimed for each item or service, whichever is greater. (ii) For a service or item for which the department solicits provider costs for use in calculating Medi-Cal reimbursement or in calculating and assigning Medi-Cal reimbursement rates, and the cost reports relevant to the claims are improperly calculated, and the provider has received three or more warning notices of improper cost report computation regarding substantially similar errors, or has been assessed a penalty under subparagraph (A), the provider may, in addition to any other penalties that may be prescribed by law, be subject to a civil money penalty of one thousand dollars ($1,000) per adjustment by the department to the costs submitted by the provider, or three times the amount claimed for each item or service, whichever is greater. (3) Any provider subjected to civil money penalties under paragraph (2) may appeal the decision to assess penalties pursuant to Section 100171 of the Health and Safety Code. (Amended by Stats. 2005, Ch. 22, Sec. 227. Effective January 1, 2006.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124. Notice of any suspension under Section 14123, along with any information obtained as a result of the director’s investigation shall be sent by the director to the appropriate state licensing, certifying or registering authority. The director may in any event provide information obtained as a result of its investigation to such appropriate state agency at any time. Nothing contained in this section shall limit the state licensing, certifying or registering authority’s power to conduct at any time independent investigations and proceedings concerning the revocation or suspension of any person’s license, certificate or registration. No action taken by the state licensing, certifying, or registering authority shall have any effect upon a suspension under Section 14123. The word “suspension” as used in this section shall mean a final suspension after all administrative and judicial remedies are exhausted. (Added by Stats. 1969, Ch. 1386.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.1. Each provider, as defined in Section 14043.1, of health care services rendered under the Medi-Cal program or any other health care program administered by the department or its agents or contractors, shall keep and maintain records of each service rendered under the Medi-Cal program or any other health care program administered by the department or its agents or contractors, the beneficiary or person to whom rendered, the date the service was rendered, and any additional information as the department may by regulation require. Records required to be kept and maintained under this section shall be retained by the provider for a period of 10 years from the final date of the contract period between the plan and the provider, from the date of completion of any audit, or from the date the service was rendered, whichever is later, in accordance with Section 438.3(u) of Title 42 of the Code of Federal Regulations. (Amended by Stats. 2017, Ch. 511, Sec. 25. (AB 1688) Effective January 1, 2018.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.10. (a) No licensed long-term health care facility participating as a provider under the Medi-Cal program shall discriminate against a Medi-Cal patient on the basis of the source of payment for the facility’s services that are required to be provided to individuals entitled to services under the Medi-Cal program. Nothing in this section shall be construed to prohibit a facility from charging private-pay patients for services required to be provided to Medi-Cal patients or which are in addition to those required under the Medi-Cal program. (b) (1) A long-term health care facility participating as a provider under the Medi-Cal program shall provide aid, care, service, and other benefits available under Medi-Cal to Medi-Cal beneficiaries in the same manner, by the same methods, and at the same scope, level, and quality as provided to the general public, regardless of payment source. This subdivision applies to, but is not limited to, admission practices, room selection and placements except as specified in subdivisions (a) and (c) of Section 14124.7, and meal provision. (2) The Legislature hereby finds and declares that this subdivision does not constitute a change in law and policy, but is declaratory of existing law and the Medi-Cal Provider Agreement and therefore the requirements imposed by this subdivision shall not be considered a new state mandate for the purposes of reimbursement pursuant to Article 3.8 (commencing with Section 14126) of this chapter or any other Medi-Cal ratesetting provisions of any law, regulation, or the California Medicaid State Plan. (3) In the event of a final judicial determination made by any state or federal court that is not appealed, or by a court of appellate jurisdiction that is not further appealed, in any action by any party or a final determination by the administrator of the Centers for Medicare and Medicaid Services, that reimbursement by the Medi-Cal program to long-term health care facilities for costs associated with this section is required by state or federal law or regulation, this subdivision shall become operative only upon appropriation by the Legislature. (c) Nothing in this section shall limit a facility’s ability to provide aid, care, service, and other benefits available under Medi-Cal in the manner, method, scope, and level appropriate based upon resident acuity and health care needs. (d) This section shall be implemented only to the extent that it does not conflict with federal law and that any necessary federal approvals are obtained and federal financial participation for the Medi-Cal program is available and is not otherwise jeopardized. (Amended by Stats. 2024, Ch. 339, Sec. 4. (SB 1354) Effective January 1, 2025.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.11. (a) The department shall establish a two-year pilot program to utilize the federal Public Assistance Reporting Information System (PARIS) to identify veterans and their dependents or survivors who are enrolled in the Medi-Cal program and assist them in obtaining federal veteran health care benefits. (b) The department shall select three consenting counties that have in operation a United States Department of Veterans Affairs (USDVA) medical center to participate in the pilot program. (c) Under the pilot program, the department shall exchange information with PARIS and identify veterans and their dependents or survivors who are receiving Medi-Cal benefits in the pilot program counties. (d) The department shall refer identified Medi-Cal beneficiaries who are receiving high-cost services, including long-term care, to county veteran service officers (CVSOs) to obtain information regarding, and assistance in obtaining, USDVA benefits. (e) Prior to commencement of the pilot program, the department shall do all of the following: (1) Enter into an agreement with the California Department of Veterans Affairs (CDVA) to perform CVSO outreach services in connection with the pilot program. The CDVA agreement shall contain performance standards that would allow the department to measure the effectiveness of the pilot program. (2) Enter into any agreements that are required by the federal government to utilize the PARIS system. (3) Perform any information technology activities that are necessary to utilize the PARIS system. (f) If the department determines that the pilot program is cost effective, it may implement the program statewide at any time and continue operation of PARIS indefinitely. (g) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific, this section by means of written directives without taking further regulatory action. (h) The department shall implement the pilot program by July 1, 2009. (i) In order to achieve maximum cost savings the Legislature hereby determines that an expedited contract process for contracts under this section is necessary. Therefore, contracts under this section shall be exempt from the Public Contract Code and from Chapter 3 (commencing with Section 11250) of Part 1 of Division 3 of Title 2 of the Government Code. (Amended by Stats. 2025, Ch. 105, Sec. 60. (AB 144) Effective September 17, 2025.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.12. (a) (1) Notwithstanding any other law, for the duration of the COVID-19 emergency period, the department shall implement any federal Medicaid program waiver or flexibility approved by the federal Centers for Medicare and Medicaid Services related to the COVID-19 public health emergency. This includes, but is not limited to, any waiver or flexibility approved pursuant to Sections 1315, 1320b-5, or 1396n of Title 42 of the United States Code, or the Medi-Cal state plan. Any request for a federal Medicaid program waiver or flexibility shall be subject to Department of Finance approval before the department submits that request to the federal Centers for Medicare and Medicaid Services. (2) During the COVID-19 emergency period, and through December 31, 2022, for any extended waiver or flexibility described in subdivision (f), if there is a conflict between this chapter, Chapter 8 (commencing with Section 14200), Chapter 8.8 (commencing with Section 14600), or Chapter 8.9 (commencing with Section 14700), and any approved federal waiver or flexibility, as described in paragraph (1), the approved federal waiver or flexibility shall control over any conflict in the specified state law. (b) (1) To the extent that federal financial participation is available, the department, subject to Department of Finance approval, shall exercise its option under Section 1396a(a)(10)(A)(ii)(XXIII) of Title 42 of the United States Code to extend the medical assistance, as described in Section 1396a(a)(10)(A)(ii)(XVIII) of Title 42 of the United States Code, to uninsured individuals, as defined in Section 1396a(ss) of Title 42 of the United States Code, for the duration of the COVID-19 emergency period. (2) The department, subject to Department of Finance approval, may seek federal approval pursuant to Section 1315 of Title 42 of the United States Code to extend the medical assistance afforded to uninsured individuals pursuant to paragraph (1) to include COVID-19-related treatment services that are otherwise covered for full-scope Medi-Cal beneficiaries, as defined by the department. If federal financial participation is unavailable, the department, subject to Department of Finance approval, may elect to implement this paragraph on a state-only funding basis, and subject to an appropriation by the Legislature. (c) Notwithstanding any other law, the department shall seek to maximize federal financial participation for Medi-Cal expenditures that it determines to be available for the COVID-19 public health emergency, and shall comply with any federal requirements and conditions for receipt of that federal financial participation. This includes, but is not limited to, the temporary increase in the federal medical assistance percentage made available pursuant to Section 6008 of the federal Families First Coronavirus Response Act (Public Law 116-127). (d) Due to the impact of the COVID-19 public health emergency on the department’s ongoing administration of the Medi-Cal program, the department may seek any federal approvals it deems necessary for any number of temporary extensions of all or select components of the California Medi-Cal 2020 Demonstration (No. 11-W-00193/9) pursuant to Article 5.5 (commencing with Section 14184), which is scheduled to expire on December 31, 2020. If the department elects to seek any extension, the department shall determine the length of time for the extension sought and whether to seek an extension for the entirety of the demonstration or select components of the demonstration. In implementing this subdivision, the department, to the extent practicable, shall consult with affected stakeholder entities before seeking a temporary extension. (e) The department, subject to Department of Finance approval, shall seek any federal approvals it deems necessary to implement this section or to maintain sufficient access to covered benefits under the Medi-Cal program during the COVID-19 emergency period. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized. (f) (1) (A) The department shall seek any federal approvals it deems necessary to extend the approved waiver or flexibility implemented pursuant to subdivision (a), as of July 1, 2021, that are related to the delivery and reimbursement of services via telehealth modalities in the Medi-Cal program. Subject to subdivision (e), the department shall implement those extended waivers or flexibilities for which federal approval is obtained, to commence on the first calendar day immediately following the last calendar day of the federal COVID-19 public health emergency period, and through December 31, 2022. (B) Subject to subdivision (e), the department may authorize the use of remote patient monitoring as an allowable telehealth modality for covered health care services and provider types it deems appropriate for dates of service on or after July 1, 2021. The department may establish a fee schedule for applicable health care services delivered via remote patient monitoring. (2) (A) For purposes of informing the 2022–23 proposed Governor’s Budget, released in January 2022, the department shall convene an advisory group consisting of consultants, subject matter experts, and other affected stakeholders to provide recommendations to inform the department in establishing and adopting billing and utilization management protocols for telehealth modalities to increase access and equity and reduce disparities in the Medi-Cal program. The advisory group shall analyze the impact of telehealth in increased access for patients, changes in health quality outcomes and utilization, best practices for the appropriate mix of in-person visits and telehealth, and the benefits or liabilities of any practice or care model changes that have resulted from telephonic visits. (B) The advisory group shall include representatives of the California Medical Association, the California Primary Care Association, the California Association of Public Hospitals, the County Behavioral Health Directors Association, Medi-Cal managed care plans, Planned Parenthood Affiliates of California, Essential Access Health, and other subject matter experts or other affected stakeholders as identified by the department. (3) For purposes of implementing this subdivision, the department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis. Contracts entered into or amended pursuant to this paragraph shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and the State Administrative Manual, and shall be exempt from the review or approval of any division of the Department of General Services. (4) Nothing in this subdivision shall be construed to limit coverage of, and reimbursement for, telehealth modalities that are the type authorized by the department prior to the COVID-19 emergency period and described in the Medi-Cal State Plan, the Medi-Cal provider manual, or other departmental guidance. (g) (1) Notwithstanding any other law, subject to appropriation by the Legislature and Section 11.95 of the Budget Act of 2021, the department shall implement those activities and expenditures to enhance, expand, or strengthen home and community-based services (HCBS) under the Medi-Cal program that are approved by the federal Centers for Medicare and Medicaid Services pursuant to Section 9817 of the federal American Rescue Plan Act of 2021 (Public Law 117-2) and associated federal guidance. (2) Notwithstanding any other law, the department shall comply with any federal requirements and conditions as necessary to claim the increased federal medical assistance percentage for eligible HCBS expenditures pursuant to Section 9817 of the federal American Rescue Plan Act of 2021 (Public Law 117-2) and associated federal guidance. (3) Notwithstanding any other law, stipends or payments received by an individual from initiatives included in the approved HCBS spending plan described in this subdivision shall not be considered income or resources for purposes of determining the individual’s, or any member of their household’s, eligibility for benefits or assistance, or the amount or extent of benefits or assistance, under any state or local benefit or assistance program, to the extent permitted under federal law and, where applicable, to the extent any necessary federal approvals are obtained. (4) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, the State Department of Social Services, the California Department of Aging, the State Department of Public Health, the State Department of Developmental Services, the State Department of Rehabilitation, and the Department of Health Care Access and Information, as applicable, may implement, interpret, or make specific this subdivision and any HCBS activity described in paragraph (1) by means of all-county letters, plan letters, provider bulletins, or other similar instructions, without taking any further regulatory action. (5) For purposes of implementing this subdivision and any HCBS activity described in paragraph (1), the department, the State Department of Social Services, the California Department of Aging, the State Department of Public Health, the State Department of Developmental Services, the State Department of Rehabilitation, and the Department of Health Care Access and Information, as applicable, may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis. Contracts entered into or amended pursuant to this paragraph, and the implementation of any HCBS activity described in paragraph (1), shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, Chapters 7 (commencing with Section 9530) and 7.5 (commencing with Section 9540) of Division 8.5 of this code, and the State Administrative Manual, and shall be exempt from the review or approval of any division of the Department of General Services. (6) Any funding made available to the Traumatic Brain Injury Program in the State Department of Rehabilitation pursuant to paragraph (1) shall be exempted from subdivision (b) of Section 4355, subdivision (b) of Section 4357, and subdivision (c) of Section 4357.1. (h) Notwithstanding any other law, subject to subdivision (e), the department shall align COVID-19 vaccine administration payments to payment reimbursement structures for vaccines administered in accordance with the Medi-Cal State Plan. (i) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of all-county letters, plan letters, provider bulletins, or other similar instructions without taking any further regulatory action. (j) For purposes of this section, the following definitions apply: (1) “COVID-19 emergency period” has the same meaning as “emergency period” as defined in Section 1320b-5(g)(1)(B) of Title 42 of the United States Code, unless otherwise defined in federal law or any federal approval obtained pursuant to this section. (2) “COVID-19 public health emergency” means the Public Health Emergency declared by the Secretary of the United States Department of Health and Human Services on January 31, 2020, pursuant to Section 247d of Title 42 of the United States Code, and entitled “Determination that a Public Health Emergency Exists Nationwide as the Result of the 2019 Novel Coronavirus,” including any subsequent renewal of that declaration. (Amended by Stats. 2024, Ch. 40, Sec. 62. (SB 159) Effective June 29, 2024.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.13. (a) The department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis for purpose of administering or implementing any federal grant awarded pursuant to the federal 21st Century Cures Act (Public Law 114-255), any subsequent amendments to that federal act, or any associated federal regulation or policy guidance. (b) Contracts entered into or amended pursuant to this section shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and shall be exempt from the review or approval of any division of the Department of General Services. (Added by Stats. 2017, Ch. 52, Sec. 29. (SB 97) Effective July 10, 2017.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.14. (a) The department shall develop and submit an application to solicit a grant authorized under Section 9007 of the federal 21st Century Cures Act (42 U.S.C. Sec. 290bb-37) to develop a community-based crisis response plan. To the extent consistent with federal grant application requirements, the grant application shall include, at a minimum, a plan for all of the following: (1) Promoting integration and coordination between local public and private entities engaged in crisis response, including first responders, emergency health care providers, primary care providers, law enforcement, court systems, health care payers, social service providers, and behavioral health providers. (2) Developing memoranda of understanding with public and private entities to implement crisis response services. (3) Addressing gaps in community resources for crisis intervention and prevention. (4) Developing models for minimizing hospital emergency department utilization and readmissions, including through appropriate discharge planning. (b) The department shall confer with stakeholders during the development of the grant application. Stakeholders shall include, but not be limited to, representatives from organizations that have experience responding to crisis care, including hospitals, first responders, emergency health care providers, primary care providers, law enforcement, court systems, health care payers, social service providers, behavioral health providers, and organizations representing consumers of behavioral health services and their significant support persons. (c) If the department receives a grant under Section 9007 of the federal 21st Century Cures Act (42 U.S.C. Sec. 290bb-37), the department shall submit to the United States Secretary of Health and Human Services, at the time and in the manner, and containing the information, as the secretary may reasonably require, a report, including an evaluation of the effect of the grant on all of the following: (1) Local crisis response services and measures for individuals receiving crisis planning and early intervention supports. (2) Individuals reporting improved functional outcomes. (3) Individuals receiving regular followup care following a crisis. (d) The department shall submit a copy of the report described in subdivision (c) to the Legislature. A report submitted pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code. (e) This section shall become operative only if Congress appropriates funds for purposes of Section 9007 of the federal 21st Century Cures Act (42 U.S.C. Sec. 290bb-37). (Added by Stats. 2018, Ch. 315, Sec. 1. (AB 2112) Effective January 1, 2019. Conditionally operative as prescribed by its own provisions.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.15. (a) Effective January 1, 2023, subject to appropriation by the Legislature, the department shall design and implement a supplemental payment program for emergency medical air transportation services to increase the Medi-Cal reimbursement in an amount not to exceed normal and customary charges charged by qualified emergency medical air transportation providers. (b) Notwithstanding the rulemaking provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, and any applicable federal waivers and state plan amendments by means of plan letters, plan or provider bulletins, or similar instructions without taking any further regulatory action. (c) In implementing this section, the department shall seek any federal approvals it deems necessary. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized. (d) This section shall become inoperative if any of the following occurs: (1) The federal Centers for Medicare and Medicaid Services denies approval for the implementation of this section. (2) The Legislature fails to appropriate moneys for the program in the annual Budget Act, or fails to appropriate such moneys in a separate bill enacted within 30 days following enactment of the annual Budget Act. (3) A lawsuit related to this section is filed against the state and a preliminary injunction or other order has been issued that results in a financial disadvantage to the state, including, but not limited to, a loss of federal financial participation. (Added by Stats. 2021, Ch. 476, Sec. 3. (AB 1104) Effective October 4, 2021. Conditionally inoperative as prescribed by its own provisions.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.16. (a) (1) Upon appropriation by the Legislature for this purpose, the department shall complete an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services. The analysis shall take into consideration all of the following in assessing capacity to provide a covered housing support services benefit: (A) Providers that are not certified Medi-Cal providers, but are receiving funding from the United States Department of Housing and Urban Development to provide housing support services. (B) The number of providers in relation to each region’s or county’s number of people experiencing homelessness. (C) A comparison of provider networks in states that have implemented Medicaid benefits to fund housing support services, including any similar Medicaid benefits in California serving different populations. (D) Specific actions the department could take to develop a network of providers meeting the criteria of this section, and an estimated timeline for developing an adequate network, should the analysis conclude that the state’s network is not yet adequate. (2) The department shall report, in compliance with Section 9795 of the Government Code, the outcomes of the independent analysis to the Legislature by January 1, 2024, so long as an appropriation is made as described in paragraph (1). (b) For purposes of implementing this section, the department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis. Contracts entered into or amended pursuant to this subdivision shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and the State Administrative Manual, and shall be exempt from the review or approval of any division of the Department of General Services. (Added by Stats. 2021, Ch. 263, Sec. 2. (SB 171) Effective September 23, 2021.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.2. (a) (1) During normal working hours, the department may make any examination of the books and records of, and may visit and inspect the premises or facilities of, those identified in paragraphs (2) and (3), that it may deem necessary to carry out the provisions of this chapter or Chapter 8 (commencing with Section 14200) and regulations adopted thereunder, or the law under which the department or its agents or contractors administer any other health care program. (2) Any applicant or provider, as defined in Section 14043.1, pertaining to services, goods, supplies, or merchandise rendered or supplied, directly or indirectly, or to be rendered or supplied, directly or indirectly, to any beneficiary under this chapter or Chapter 8 (commencing with Section 14200). (3) Any person or entity that provides services, goods, supplies, or merchandise, directly or indirectly, under, or seeks reimbursement from, any other health care program administered by the department or its agents or contractors. (b) (1) Applicants, providers, or others receiving or seeking reimbursement under the Medi-Cal program or other health care programs administered by the department or its agents or contractors shall furnish information or copies of records and documentation upon request by the department. Unannounced visits to request this information shall be reserved for those exceptional situations where arrangement of an appointment beforehand is clearly not possible or is clearly inappropriate to the nature of the intended visit. Only those related books and records of each service rendered, the beneficiary to whom rendered, the date, and additional information as the department may by regulation require shall be subject to the requirement of furnishing copies. This information may include records to support and document the recipient’s eligibility for services and, to the extent necessary, records to provide proof of the quantity and receipt of the services, and that the services were provided by proper personnel. Providers and others subject to this section shall be reimbursed for reasonable photocopying-related expenses as determined by the department. Failure to comply with the requests for information or records made pursuant to this section shall be grounds for immediate suspension of the provider or others subject to this section under subdivision (b) of Section 14123 or under the other health care programs administered by the department or its agents or contractors. (2) Any copies furnished pursuant to this section shall be used only to investigate and pursue criminal, civil, or administrative sanctions for Medi-Cal fraud or abuse, including the provision of dental services that are below or less than the standard of acceptable quality as prescribed by subdivision (f) of Section 14123, or fraud or abuse under any other health care program administered by the department or its agents or contractors and the copies shall be destroyed when that purpose has been satisfied. This section shall not be construed to prohibit the referral of investigative findings, including copies of books and records, to the appropriate federal, state, or local licensing, certifying, regulatory, or prosecutorial authority. (c) For purposes of this section and Section 14124.1, “provider” shall be defined as follows: (1) “Provider” shall have the meaning contained in Section 14043.1. (2) “Provider” shall also include any person or entity under contract with the provider, as defined in paragraph (1), to assist in the application process or eligibility determination. (Amended by Stats. 2000, Ch. 322, Sec. 31. Effective January 1, 2001.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.2. Drug Medi-Cal Treatment Program [14124.20 - 14124.29] ( Article 3.2 added by Stats. 2012, Ch. 36, Sec. 80. ) ## 14124.20. (a) The department may enter into a Drug Medi-Cal Treatment Program contract with each county for the provision of alcohol and drug use services within the county service area. (b) A county that has multiple contracts with the department for the provision of multiple alcohol and drug use services may enter into a single contract with the department. (Added by Stats. 2012, Ch. 36, Sec. 80. (SB 1014) Effective June 27, 2012. Operative July 1, 2012, by Sec. 83 of Ch. 36.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.2. Drug Medi-Cal Treatment Program [14124.20 - 14124.29] ( Article 3.2 added by Stats. 2012, Ch. 36, Sec. 80. ) ## 14124.21. (a) If a county decides to not enter a Drug Medi-Cal Treatment Program contract with the department, the county shall notify the department of this decision in writing by the May 20 preceding the fiscal year in which, or at least 60 days before, the contract would have become effective. (b) (1) To the extent that a county decides not to enter into or terminates its Drug Medi-Cal Treatment Program contract with the department, the department shall contract for Drug Medi-Cal Treatment services in the county as necessary to ensure beneficiary access to these services. The contract shall be made in accordance with federal Medicaid and state Medi-Cal laws and in accordance with the federal court order and any future action in the case of Sobky v. Smoley (E.D.Cal 1994) 855 F.Supp. 1123. (2) The department may enter into contracts for the provision of Drug Medi-Cal Treatment Program services with certified Drug Medi-Cal providers directly or through qualifying individual counties, counties acting jointly, county consortia, and with qualified individuals, organizations, or nongovernmental entities. (c) The department and the Department of Finance shall determine how much funding is necessary to provide the necessary services in a county and notify the Controller. (Added by Stats. 2012, Ch. 36, Sec. 80. (SB 1014) Effective June 27, 2012. Operative July 1, 2012, by Sec. 83 of Ch. 36.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.2. Drug Medi-Cal Treatment Program [14124.20 - 14124.29] ( Article 3.2 added by Stats. 2012, Ch. 36, Sec. 80. ) ## 14124.22. (a) In addition to narcotic treatment program services, a narcotic treatment program provider who is also enrolled as a Medi-Cal provider may provide medically necessary medical treatment of concurrent health conditions within the scope of the provider’s practice, to Medi-Cal beneficiaries who are not enrolled in managed care plans. Medi-Cal beneficiaries enrolled in managed care plans shall be referred to those plans for receipt of medically necessary medical treatment of concurrent health conditions. (b) Diagnosis and treatment of concurrent health conditions of Medi-Cal beneficiaries not enrolled in managed care plans by a narcotic treatment program provider may be provided within the Medi-Cal coverage limits. When the services are not part of the substance use disorder treatment reimbursed pursuant to Section 14021.51, services shall be reimbursed in accordance with the Medi-Cal program. Services reimbursable under this section shall include, but are not limited to, all of the following: (1) Medical treatment visits. (2) Diagnostic blood, urine, and X-rays. (3) Psychological and psychiatric tests and services. (4) Quantitative blood and urine toxicology assays. (5) Medical supplies. (c) A narcotic treatment provider, who is enrolled as a Medi-Cal fee-for-service provider, shall not seek reimbursement from a beneficiary for substance abuse treatment services, if services for treatment of concurrent health conditions are billed to the Medi-Cal fee-for-service program. (Added by Stats. 2012, Ch. 36, Sec. 80. (SB 1014) Effective June 27, 2012. Operative July 1, 2012, by Sec. 83 of Ch. 36.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.2. Drug Medi-Cal Treatment Program [14124.20 - 14124.29] ( Article 3.2 added by Stats. 2012, Ch. 36, Sec. 80. ) ## 14124.23. The department may enter into contracts for the procurement of services to assist the department in administering the Drug Medi-Cal Treatment Program. (Added by Stats. 2012, Ch. 36, Sec. 80. (SB 1014) Effective June 27, 2012. Operative July 1, 2012, by Sec. 83 of Ch. 36.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.2. Drug Medi-Cal Treatment Program [14124.20 - 14124.29] ( Article 3.2 added by Stats. 2012, Ch. 36, Sec. 80. ) ## 14124.24. (a) For purposes of this chapter, “Drug Medi-Cal reimbursable services” means the substance use disorder services described in the California Medicaid State Plan and includes, but is not limited to, all of the following services, administered by the department, and to the extent consistent with state and federal law: (1) Narcotic treatment program services, as described in subdivision (a) of Section 14021.51. (2) Intensive outpatient treatment services. (3) Perinatal residential services for pregnant women and women in the postpartum period. (4) Naltrexone services. (5) Outpatient drug-free services. (6) Other services upon approval of a federal Medicaid state plan amendment or waiver authorizing federal financial participation. (b) (1) While seeking federal approval for any federal Medicaid state plan amendment or waiver associated with Drug Medi-Cal services, the department shall consult with the counties and stakeholders in the development of the state plan amendment or waiver. (2) Upon federal approval of a federal Medicaid state plan amendment authorizing federal financial participation for the following services, and subject to appropriation of funds, “Drug Medi-Cal reimbursable services” shall also include the following services, administered by the department, and to the extent consistent with state and federal law: (A) Medication-assisted treatment services, including both of the following: (i) Any medication approved under Section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 355), and all biological products licensed under Section 351 of the Public Health Service Act (42 U.S.C. Sec. 262) to treat opioid use disorders. (ii) Counseling services and behavioral therapy. (B) Case management services, including supportive services to assist a person with substance use disorder diagnoses in gaining access to medical, social, educational, and other needed services. (C) Aftercare services. (c) (1) The nonfederal share for Drug Medi-Cal services shall be funded through a county’s Behavioral Health Subaccount of the Support Services Account of the Local Revenue Fund 2011, and any available county funds eligible under federal law for federal Medicaid reimbursement. The funds contained in each county’s Behavioral Health Subaccount of the Support Services Account of the Local Revenue Fund 2011 shall be considered state funds distributed by the principal state agency for the receipt of the federal block grant funds for prevention and treatment of substance abuse found at Subchapter XVII of Chapter 6A of Title 42 of the United States Code. Pursuant to applicable federal Medicaid law and regulations, including Section 433.51 of Title 42 of the Code of Federal Regulations, a county may claim allowable Medicaid federal financial participation for Drug Medi-Cal services based on the county’s certification of their actual total funds expenditures for eligible Drug Medi-Cal services to the department. (2) (A) If the director determines that a county’s provision of Drug Medi-Cal treatment services are disallowed by the federal government or by state or federal audit or review, the impacted county shall be responsible for repayment of all disallowed federal funds. In addition to any other recovery methods available, including, but not limited to, offset of Medicaid federal financial participation funds owed to the impacted county, the director may offset these amounts in accordance with Section 12419.5 of the Government Code. (B) A county subject to an action by the director pursuant to subparagraph (A) may challenge that action by requesting a hearing in writing no later than 30 days from receipt of notice of the department’s action. The proceeding shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the director shall have the powers granted therein. Upon a county’s timely request for hearing, the county’s obligation to make payment as determined by the director shall be stayed pending the county’s exhaustion of administrative remedies provided but no longer than necessary to ensure the department’s compliance with Section 1903(d)(2)(C) of the federal Social Security Act (42 U.S.C. Sec. 1396b). (d) Drug Medi-Cal services are only reimbursable to a Drug Medi-Cal provider with an approved Drug Medi-Cal contract. (e) A county shall negotiate contracts only with providers certified to provide Drug Medi-Cal services. (f) The department shall develop methods to ensure timely payment of Drug Medi-Cal claims. (g) (1) A county or a contracted provider, except for a provider subject to the requirements of subdivision (h), shall submit accurate and complete cost reports for the previous fiscal year by November 1, following the end of the fiscal year. The department may settle Drug Medi-Cal reimbursable services, based on the cost report as the final amendment to the approved county Drug Medi-Cal contract. (2) Any amount paid for any service provided to a Drug Medi-Cal beneficiary shall be audited by the department in the manner and form described in Section 14170. (3) Administrative appeals to review grievances or complaints arising from the findings of an audit or examination made pursuant to this section shall be subject to Section 14171. (h) A certified narcotic treatment program provider that is exclusively billing the state or the county for services rendered to persons subject to Section 1210.1 or 3063.1 of the Penal Code or Section 14021.52 shall submit accurate and complete performance reports for the previous state fiscal year by November 1 following the end of that fiscal year. That provider shall estimate its budgets using the uniform state daily reimbursement rate. The format and content of the performance reports shall be mutually agreed to by the department, the County Behavioral Health Directors Association of California, and representatives of the treatment provider. (i) Any contract entered into pursuant to this section shall be exempt from the requirements of Chapter 1 (commencing with Section 10100) and Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code. (j) Annually, the department shall publish procedures for contracting for Drug Medi-Cal services with certified providers and for claiming payments, including procedures and specifications for electronic data submission for services rendered. (k) If the department commences or concludes a preliminary criminal investigation of a certified provider, the department shall promptly notify each county that currently contracts with the provider for Drug Medi-Cal services that a preliminary criminal investigation has commenced or concluded. (1) Notice of the commencement and conclusion of a preliminary criminal investigation shall be made to the county behavioral health director or their equivalent. (2) Communication between the department and a county specific to the commencement or conclusion of a preliminary criminal investigation shall be confidential and shall not be subject to any disclosure request, including, but not limited to, the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code), the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), requests pursuant to a subpoena, or for any other public purpose, including, but not limited to, court testimony. (3) Information shared by the department with a county on a preliminary criminal investigation shall be maintained in a manner to ensure protection of the confidentiality of the criminal investigation. (4) The information provided to a county pursuant to this section shall only include the provider name, national provider identifier number, address, and the notice that an investigation has commenced or concluded. (5) A county shall not take any adverse action against a provider based solely upon the preliminary criminal investigation information disclosed to the county. (6) In the event of a preliminary criminal investigation of a county owned or operated program, the department has the option, but is not required, to notify the county when the department commences or concludes a preliminary criminal investigation. (7) This section does not limit the voluntary or otherwise legally mandated or contractually mandated sharing of information between the department and a county of information on an audit or investigation of a Drug Medi-Cal provider. (8) “Commenced” means the time at which a complaint or allegation is assigned to an investigator for a field investigation. (9) “Preliminary criminal investigation” means an investigation to gather information to determine if criminal law or statutes have been violated. (l) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, without taking any further regulatory action, may implement, interpret, or make specific this section, in whole or in part, by means of bulletins or similar instructions, until the time that any necessary regulations are adopted. (m) The department shall adopt regulations necessary to implement this section by July 1, 2023. (n) This section shall be implemented to the extent that any necessary federal approval of state plan amendments or other federal approvals, including waivers, are obtained, and federal financial participation is available and not otherwise jeopardized. (Amended by Stats. 2021, Ch. 615, Sec. 453. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.2. Drug Medi-Cal Treatment Program [14124.20 - 14124.29] ( Article 3.2 added by Stats. 2012, Ch. 36, Sec. 80. ) ## 14124.25. Service providers may assist Medi-Cal beneficiaries, upon request, to file a fair hearing request in accordance with Chapter 7 (commencing with Section 10950) of Part 2, or may inform Medi-Cal beneficiaries enrolled in Medi-Cal managed care plans about the Department of Managed Health Care’s toll-free telephone number for health care service plan members or the department’s ombudsman for Medi-Cal beneficiaries enrolled in a Medi-Cal managed care plan. (Added by Stats. 2012, Ch. 36, Sec. 80. (SB 1014) Effective June 27, 2012. Operative July 1, 2012, by Sec. 83 of Ch. 36.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.2. Drug Medi-Cal Treatment Program [14124.20 - 14124.29] ( Article 3.2 added by Stats. 2012, Ch. 36, Sec. 80. ) ## 14124.26. (a) Except as provided in subdivisions (b) and (c), regulations adopted by the State Department of Alcohol and Drug Programs pursuant to former Sections 11758.40 to 11758.47, inclusive, of the Health and Safety Code shall remain in effect unless amended or repealed by regulation adopted pursuant to this article. (b) Notwithstanding the rulemaking provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, for purposes of the Drug Medi-Cal Treatment Program, the department may implement, interpret, or make specific this article to the extent that this article differs from former Sections 11758.40 to 11758.47, inclusive, of the Health and Safety Code by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions from the department until regulations are adopted pursuant to that chapter of the Government Code. (c) (1) The department shall adopt emergency regulations no later than July 1, 2014. The department may subsequently readopt any emergency regulation authorized by this section that is the same as or is substantially equivalent to an emergency regulation previously adopted pursuant to this section. (2) The initial adoption of emergency regulations implementing this article and the one readoption of emergency regulations authorized by this subdivision shall be deemed an emergency and necessary for the immediate preservation of the public peace, health, safety, or general welfare. Initial emergency regulations and the one readoption of emergency regulations authorized by this section shall be exempt from review by the Office of Administrative Law. The initial emergency regulations and the one readoption of emergency regulations authorized by this section shall be submitted to the Office of Administrative Law for filing with the Secretary of State and each shall remain in effect for no more than 180 days, by which time final regulations may be adopted. (Added by Stats. 2012, Ch. 36, Sec. 80. (SB 1014) Effective June 27, 2012. Operative July 1, 2012, by Sec. 83 of Ch. 36.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.2. Drug Medi-Cal Treatment Program [14124.20 - 14124.29] ( Article 3.2 added by Stats. 2012, Ch. 36, Sec. 80. ) ## 14124.29. (a) If the department seeks a waiver pursuant to subdivision (a) of Section 14021.35, the department shall pursue federal approvals to address the need for greater capacity in both short-term residential treatment facilities and hospital settings for short-term voluntary inpatient detoxification, including, but not limited to, licensed chemical dependency recovery hospitals. (b) Nothing in this section shall be construed to limit the authority of the department pursuant to Section 14021.35. (c) This section shall be implemented only to the extent federal approvals are obtained and to the extent that federal financial participation is available. (Added by Stats. 2014, Ch. 486, Sec. 2. (SB 1161) Effective January 1, 2015.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.3. Notice of any act of the department required by law or department regulation to be given may be signed and given by the director or an authorized employee of the department and may be made personally or by mail. If made by mail, service shall be made in the manner prescribed by Section 1013 of the Code of Civil Procedure. In the case of service by mail, the service is complete at the time of deposit in the United States Post Office. (Added by Stats. 1970, Ch. 1030.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.39. Title This article shall be known and may be cited as the Protect Patients Now Act of 2024. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.4. The director may on his own motion at any time before a suspension is placed into effect and without further proceedings, review the penalty against a provider, but such review shall be limited to reduction of such penalty. (Added by Stats. 1970, Ch. 1030.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.40. Findings and Declarations (a) In 1992, the federal government established a program giving safety net health care providers access to discounted prescription drugs. The intent of the law was for safety net health care providers to use the discounted drugs to treat patients who are “medically uninsured, on marginal incomes and have no other sources to turn to for preventive and primary care services” and to “reach[] more eligible patients and provide[] more comprehensive services” to “low-income and most vulnerable patients.” (H.R. Rep. No. 102-384 (Part 2), at 12 (1992)(Conf. Rep.).) The program was not intended to be used by safety net health care providers to accumulate massive fortunes running into the hundreds of millions of dollars or more. (b) Unfortunately, some safety net health care providers have manipulated the program to receive enormous markups on the discounted prescription drugs they receive and then stick taxpayers with the added cost. Instead of using this massive windfall to help patients, the worst offenders have used their fortunes to purchase luxury coastal condominiums, wasted hundreds of millions of dollars on failed political campaigns, put elected politicians on their payrolls, and acquired low-income multifamily housing complexes that are operated as slums. Abusing net revenues generated through the discount prescription drug program in this manner does not result in better health care for low-income patients. Instead, it cheats low-income patients out of the care they deserve and scams taxpayers who end up footing the bill. (c) Governor Newsom has already ended this type of prescription drug scamming in the Medi-Cal program through Executive Order N-01-19, which requires the Department of Health Care Services to transition Medi-Cal pharmacy services away from arrangements that are susceptible to price scams. Known as the Medi-Cal Rx program, it achieves cost savings for prescription drug purchases made by the state, standardizes the pharmacy benefit statewide for all Medi-Cal patients, increases overall access, and eliminates the ability of prescription drug price manipulators to game the system through Medi-Cal. However, other vulnerabilities in taxpayer-funded drug programs that price manipulators still exploit have not yet been addressed. (d) California needs to make the cost-savings achieved through the Medi-Cal Rx program permanent. Furthermore, additional reforms are necessary to protect taxpayer dollars and help the neediest patients by ensuring that prescription drug price manipulators are required to end other scams in order to continue operating in our state. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.41. Statement of Intent In enacting this article, the purpose and intent of the people of the State of California is to do all of the following: (a) To permanently authorize the Medi-Cal Rx program so that its expanded patient access and cost-savings can be continued in perpetuity. (b) To protect patients and taxpayers by putting an end to other prescription drug pricing scams that are still being perpetrated in our state through the discount prescription drug program. (c) To impose strict accountability on prescription drug price manipulators by requiring them to spend at least 98 percent of their net revenues generated in this state through the discount prescription drug program on direct patient care. (d) To ensure that health care providers that have a track record of scamming the discount prescription drug program refocus on providing direct patient care or lose their state-provided privileges and benefits, including suspension and revocation of licenses, loss of state and local grant funding, and elimination of California tax-exempt status. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.42. Permanent Authorization for the Medi-Cal Rx Program The State Department of Health Care Services is authorized to provide and administer Medi-Cal pharmacy services under a single statewide fee-for-service delivery system. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.43. Limitation on Pharmacy Sales Agreements Involving Prescription Drug Price Manipulators (a) On and after January 1, 2025, a prescription drug price manipulator shall not enter into, or participate in, a pharmacy sales agreement that applies to, operates in, or intends or proposes to operate in or apply to, this state unless the prescription drug price manipulator is in compliance with Section 14124.44. (b) Any pharmacy sales agreement that involves a prescription drug price manipulator not in compliance with Section 14124.44 is, as of January 1, 2025, contrary to public policy and is void and unenforceable to the extent that the pharmacy sales agreement applies to, operates in, or intends or proposes to operate in or apply to, this state. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.44. Patient Protection Requirements Imposed on Prescription Drug Price Manipulators Notwithstanding any other provision of law, on and after January 1, 2025, a prescription drug price manipulator shall only be eligible for tax-exempt status in this state or to be licensed to operate as a pharmacy, a health care service plan, or a clinic in this state if it complies with all of the following requirements: (a) In the prior calendar year, the prescription drug price manipulator spent at least 98 percent of the net revenues it generated in California from participation in the discount prescription drug program on direct patient care. (b) In the prior calendar year, the prescription drug price manipulator was not engaged in any unprofessional conduct, dishonest dealing, or conduct inimical to the public health, welfare, or safety of the people of the State of California. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.45. Oversight of Prescription Drug Price Manipulators (a) (1) In order to determine compliance with Section 14124.44, on and after January 1, 2025: (A) A prescription drug price manipulator that holds tax-exempt status in this state shall annually submit to the Attorney General a detailed accounting for the prior calendar year of both its California statewide and nationwide gross and net revenues generated from participation in the discount prescription drug program as well as how those net revenues were spent. (B) A prescription drug price manipulator that holds a pharmacy license in this state shall annually submit to the California State Board of Pharmacy a detailed accounting for the prior calendar year of both its California statewide and nationwide gross and net revenues generated from participation in the discount prescription drug program as well as how those net revenues were spent. (C) A prescription drug price manipulator that holds a health care service plan license in this state shall annually submit to the Department of Managed Health Care a detailed accounting for the prior calendar year of both its California statewide and nationwide gross and net revenues generated from participation in the discount prescription drug program as well as how those net revenues were spent. (D) A prescription drug price manipulator that holds a clinic license in this state shall annually submit to the State Department of Public Health a detailed accounting for the prior calendar year of both its California statewide and nationwide gross and net revenues generated from participation in the discount prescription drug program as well as how those net revenues were spent. (2) The people of California hereby find and declare that, similar to the need for out-of-state information under Chapter 17 (commencing with Section 25101) of Part 11 of Division 2 of the Revenue and Taxation Code, it is necessary for prescription drug price manipulators to provide information on both California statewide and nationwide gross and net revenues in order to ensure proper allocation of in-state and out-of-state revenues. (b) In addition to any other authority granted by this article, the Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, or the State Department of Public Health may do either of the following: (1) Standardize the necessary contents of the detailed accounting required to be submitted pursuant to this section. (2) Request from a prescription drug price manipulator any other information deemed necessary or convenient to determine compliance with the requirements set forth in Section 14124.44. (c) All information submitted pursuant to this section shall be submitted under penalty of perjury. (d) (1) All financial information submitted to the Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, or the State Department of Public Health pertaining to either of the following shall be treated as confidential and sensitive business information exempt from public disclosure: (A) Specific prices or amounts paid by, or charged to, a prescription drug price manipulator for specific prescription drugs acquired by the prescription drug price manipulator through the discount prescription drug program. (B) Specific prices or amounts charged by, or paid to, a prescription drug price manipulator for specific prescription drugs it obtained through the discount prescription drug program. (2) (A) Total aggregated gross and net revenues generated by a prescription drug price manipulator through the discount prescription drug program are not covered by this subdivision so long as the figures do not reveal the specific information described in subparagraph (A) or (B) of paragraph (1). (B) After removing or anonymizing the specific information described in subparagraphs (A) and (B) of paragraph (1), the Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, and the State Department of Public Health shall make total aggregated statewide and nationwide gross and net revenues figures publicly available upon request. (e) (1) The Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, and the State Department of Public Health shall cooperatively establish the deadline each year for a prescription drug price manipulator to submit the information required by this section. (2) For calendar year 2025, the deadline shall not be later than December 31, 2025. (3) A prescription drug price manipulator that fails to submit required information by the deadline established pursuant to this subdivision shall be deemed to be out of compliance with the requirements of Section 14124.44 for the applicable calendar year, according to the procedures set forth in subdivision (b) of Section 14124.46. (f) The Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, and the State Department of Public Health may each impose a fee on a prescription drug price manipulator for the costs associated with concluding whether the prescription drug price manipulator was in compliance with the requirements of Section 14124.44 during the prior calendar year. The charges shall not exceed the reasonable regulatory costs to the respective agency incident to performing the investigations, inspections, and audits required by this article, including any administrative enforcement and adjudication thereof. (g) (1) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, and the State Department of Public Health may implement this article by means of bulletins, notices, or other similar instructions, without taking further regulatory action. (2) Actions taken pursuant to an interagency agreement entered into pursuant to subdivision (c) of Section 14124.46 shall be covered by paragraph (1). (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.46. Conclusions Regarding Compliance (a) (1) Within 60 calendar days of the deadline established pursuant to subdivision (e) of Section 14124.45, the Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, and the State Department of Public Health shall each separately issue an independent written conclusion regarding whether or not the prescription drug price manipulator is in compliance with the requirements of Section 14124.44. Failure to reach a conclusion within 60 calendar days shall not excuse noncompliance with Section 14124.44. (2) The Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, or the State Department of Public Health shall only be required to issue an independent written conclusion pursuant to this subdivision if the prescription drug price manipulator was required to submit information to the relevant official, board, or department pursuant to subdivision (a) of Section 14124.45. (b) (1) If, within the 60-calendar day period set forth in paragraph (1) of subdivision (a), the information submitted by a prescription drug price manipulator is found to be incomplete or insufficient by the Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, or the State Department of Public Health for issuance of a written conclusion required by this section, then the relevant official, board, or department shall issue to the prescription drug price manipulator a written notice to correct. The notice to correct shall contain a description of the additional information required. (2) The prescription drug price manipulator shall have 10-calendar days from the date of the notice to correct to provide complete or sufficient information. If the prescription drug price manipulator fails to remedy the incompleteness or insufficiency within 10-calendar days, then the prescription drug price manipulator shall be deemed to be out of compliance with the requirements of Section 14124.44 for the applicable calendar year and the relevant official, board, or department shall issue a written conclusion to that effect immediately upon the expiration of the 10-calendar-day period. (c) The Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, or the State Department of Public Health may, either collectively or separately, enter into an interagency agreement with the California State Auditor’s Office for assistance in reaching a conclusion about a prescription drug price manipulator’s compliance with the requirements of Section 14124.44. Costs incurred pursuant to an interagency agreement under this subdivision may be recovered pursuant to subdivision (f) of Section 14124.45. (d) (1) If the Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, or the State Department of Public Health concludes a prescription drug price manipulator is not in compliance with the requirements of Section 14124.44, then a written notice of noncompliance shall be provided to the prescription drug price manipulator notifying it of that conclusion. The written notice of noncompliance shall provide instructions on requesting a hearing pursuant to subdivision (e). (2) If a hearing is not requested pursuant to subdivision (e), then a conclusion issued pursuant to this section shall become a final determination. (e) (1) (A) A prescription drug price manipulator may request a hearing in response to a written notice of noncompliance issued pursuant to paragraph (1) of subdivision (d). (B) The request shall be submitted in writing and must be made within 30-calendar days of the date of the written notice of noncompliance. (2) (A) Except as otherwise provided in this article, hearings shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (B) The Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, and the State Department of Public Health may consolidate hearings on written notices of noncompliance pertaining to the same prescription drug price manipulator for the same calendar year and may mutually appoint a single hearing officer therefor. The hearing may be conducted by a hearing officer appointed by an official, board, or department that issued a written notice of noncompliance. (C) The prescription drug price manipulator may be represented by counsel at any of the stages of the proceedings. (3) (A) If judicial review is not sought pursuant to subdivision (f), then the decision of the hearing officer shall become a final determination. (B) If the hearing officer’s decision is that the prescription drug price manipulator is not in compliance with the requirements of Section 14124.44, then any exemption from California state taxation and any licenses described in subdivision (a) of Section 14124.45 held by the prescription drug price manipulator shall be immediately suspended. If judicial review is thereafter sought pursuant to subdivision (f), the state tax exemption and licenses shall remain suspended pending judicial review pursuant to subdivision (f). (f) (1) Any party aggrieved by the decision of the hearing officer may seek review pursuant to Section 1094.5 of the Code of Civil Procedure within 30-calendar days of issuance of the hearing officer’s decision. (2) If review is sought pursuant to Section 1094.5 of the Code of Civil Procedure, the final determination shall be based upon the outcome of that review. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.47. Final Determinations Notwithstanding any other provision of law, if a prescription drug price manipulator is finally determined pursuant to the procedures set forth in this article to have violated the requirements of Section 14124.44, then all of the following shall apply: (a) Any and all California pharmacy licenses, health care service plan licenses, or clinic licenses held by the prescription drug price manipulator shall be permanently revoked. (b) The prescription drug price manipulator shall be prohibited from applying for, or obtaining or possessing, a California pharmacy license, health care service plan license, or clinic license for a period of 10 years. (c) Any person serving as an owner, chief executive officer, chief financial officer, chief administrative officer, chief operating officer, president, or any other similar position exercising significant influence or control over the prescription drug price manipulator at the time the violation of Section 14124.44 occurred shall be prohibited from serving as an owner, officer, director, or employee of a California licensed pharmacy, health care service plan, or clinic for a period of 10 years. (d) The prescription drug price manipulator shall lose, and no longer be eligible for, tax-exempt status in the State of California, including under Chapter 4 (commencing with Section 23701) of Part 11 of Division 2 of the Revenue and Taxation Code, and shall instead be subject to the Revenue and Taxation Code and other state laws as a taxable organization. The prescription drug price manipulator shall be prohibited from reapplying for, or again being granted, tax-exempt status in this state for a period of 10 years. (e) The prescription drug price manipulator shall be ineligible to receive any new or renewed state or local grants or contracts for a period of 10 years. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.48. Definitions For purposes of this article, as used in both the singular and plural form, the following definitions shall apply: (a) “Clinic” means an entity operating as one or more of the clinics described in Section 1204 of the Health and Safety Code. (b) “Direct patient care” means the provision of medical services, dental services, pharmaceutical services, or behavioral health services directly administered to individual patients being treated for, or suspected of having, medical or behavioral health conditions. Direct patient care includes preventive care that is directly administered to patients. Further, in order to qualify as “direct patient care,” the services must be health care services that are regularly provided by other health care providers in the community or nonprofit community-based organizations that are also receiving reimbursements or payments from the Medi-Cal, Medicaid, or Medicare programs. (c) “Discount prescription drug program” means the program established by Section 602 of the Veterans Health Care Act of 1992, P.L. 102-585 Sec. 602, the Public Health Service Act (Sec. 340B; 42 U.S.C. Sec. 256b) that is administered by the Office of Pharmacy Affairs in the Health Resources and Services Administration within the United States Department of Health and Human Services. (d) “Enforcement agency” means any department of a state, county, or city agency within California that has the authority to inspect a multifamily dwelling and enforce health, safety, or building codes including, but not limited to, a building department or building division, a housing department, a housing and community investment department, a fire department or fire district, and a health department. (e) “Entity” means a natural person, corporation, or other legal or corporate organization of any kind, whether nonprofit or for profit, and includes any parent, subsidiary, or affiliate of the entity. (f) “Health care service plan” means an entity operating as a health care service plan under the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code). (g) “Medi-Cal Rx Program” means the program initially established pursuant to paragraph (1) of Executive Order N-01-19 and permanently authorized by Section 14124.42. (h) “Multifamily dwelling” means any structure located in this state designed or used for human habitation or occupancy that has been divided into two or more independent living quarters. (i) “Owner-operator of highly dangerous properties” means an entity, including any parent, subsidiary, or affiliate of that entity, that, either currently or previously, owns, operates, or is the responsible party for one or more multifamily dwellings that meet or met the following conditions during the time of the entity’s ownership, operation, or responsibility: (1) One or more of the multifamily dwellings was inspected on one or more occasions by an enforcement agency or officer thereof. (2) The enforcement agencies or officers issued one or more notices or inspection reports identifying violations affecting the health and safety of occupants of the multifamily dwellings. (3) Cumulatively across all of the multifamily dwellings, the notices or inspection reports described in paragraph (2) identified a combined total of at least 500 violations that were categorized in violation severity level “high.” (j) “Pharmacy” means an entity operating pursuant to Chapter 9 (commencing with Section 4000) of Division 2 of the Business and Professions Code. (k) (1) “Pharmacy sales agreement” means any agreement involving a pharmacy and another entity that purchases, authorizes, or obtains prescription drugs through the discount prescription drug program where both of the following conditions exist: (A) The pharmacy dispenses drugs negotiated by the other entity through or pursuant to the discount prescription drug program. (B) The price charged by the pharmacy for the drugs described in subparagraph (A), excluding dispensing fees, exceeds the purchase price negotiated or paid by the other entity pursuant to or through the discount prescription drug program. (2) A pharmacy sales agreement can exist between unrelated entities, or between related entities that are parents, subsidiaries, or affiliates of one another or otherwise under common ownership or control. (l) “Prescription drug price manipulator” means an entity, including any parent, subsidiary, or affiliate of that entity, that individually or collectively with one or more of its parents, subsidiaries, or affiliates meets all of the following requirements: (1) The entity purchases, negotiates, authorizes, or obtains prescription drugs through the discount prescription drug program. (2) During any 10-calendar-year period of its existence, the entity spent more than one hundred million dollars ($100,000,000) on purposes that do not qualify as direct patient care. (3) The entity currently is, or has previously been, an owner-operator of highly dangerous properties. (4) The entity meets at least one of the following conditions: (A) The entity currently has, or previously had, one or more licenses to operate as a health care service plan. (B) The entity currently contracts, or has previously contracted, with the State Department of Health Care Services as a primary care case management organization pursuant to Article 2.9 (commencing with Section 14088) of Chapter 7 of Part 3 of Division 9. (C) The entity currently contracts, or has previously contracted, with the federal Centers for Medicare and Medicaid Services to provide services in the Medicare Program as a Medicare special needs plan. (D) The entity currently has, or previously had, one or more licenses to operate as a pharmacy. (E) The entity currently has, or previously had, one or more licenses to operate as a clinic. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.49. Unprofessional Conduct, Dishonest Dealing, and Conduct Inimical to Public Health, Welfare, or Safety (a) In addition to any other conduct, standard, or requirement described in Article 7 (commencing with Section 1386) of Chapter 2.2 of Division 2 of the Health and Safety Code or any other statute or regulation, it shall constitute dishonest dealing for a health care service plan that qualifies as a prescription drug price manipulator to fail to submit timely, accurate information required or requested pursuant to Section 14124.45. (b) In addition to any other conduct, standard, or requirement described in Article 19 (commencing with Section 4300) of Chapter 9 of Division 2 of the Business and Professions Code, Section 1762 of Title 16 of the California Code of Regulations, or any other statute or regulation, it shall constitute unprofessional conduct for a pharmacy that qualifies as a prescription drug price manipulator to fail to submit timely, accurate information required or requested pursuant to Section 14124.45. (c) In addition to any other conduct, standard, or requirement described in Article 5 (commencing with Section 1240) of Chapter 1 of Division 2 of the Health and Safety Code or any other statute or regulation, it shall constitute conduct inimical to the public health, welfare, or safety of the people of the State of California for a clinic that qualifies as a prescription drug price manipulator to fail to submit timely, accurate information required or requested pursuant to Section 14124.45. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.5. (a) The director may, in accordance with Section 10725, adopt, amend, or repeal, in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, reasonable rules and regulations as may be necessary or proper to carry out the purposes and intent of this chapter, and to enable the department to exercise the powers and perform the duties conferred upon it by this chapter, not inconsistent with any statute of this state. (b) All regulations previously adopted by the State Department of Health Care Services or any predecessor department pursuant to this chapter and in effect immediately preceding the operative date of this section, shall remain in effect and shall be fully enforceable unless and until readopted, amended, or repealed by the director in accordance with Section 10725. (Amended by Stats. 2014, Ch. 442, Sec. 25. (SB 1465) Effective September 18, 2014.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.50. State and Local Grants and Contracts Eligibility (a) (1) The people of California hereby find and declare that their state and local tax dollars should not be awarded to prescription drug price manipulators that violate the discount prescription drug program’s intent to treat patients who are medically uninsured, on marginal incomes and have no other sources to turn to for preventive and primary care services and to reach more eligible patients and provide more comprehensive services to low-income and most vulnerable patients. (2) The people of California further find and declare that protecting their state and local tax dollars in this manner is a matter of statewide concern. (b) Therefore, in addition to the requirements of subdivision (e) of Section 14124.47, a prescription drug price manipulator shall only be eligible to receive any new or renewed state or local grants or contracts if, in the prior calendar year, the prescription drug price manipulator spent at least 98 percent of the net revenues it generated nationwide from participation in the discount prescription drug program on direct patient care. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.51. Public Input The Attorney General, the California State Board of Pharmacy, the Department of Managed Health Care, and the State Department of Public Health shall invite, and provide a process for submission of, public comments and information relating to entities that qualify as a prescription drug price manipulator or an owner-operator of highly dangerous properties. Information that can be submitted pursuant to this section includes, but is not limited to, records of expenditures and written notices or inspection reports identifying violations affecting the health and safety of occupants at multifamily dwellings. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.3. Protect Patients Now Act of 2024 [14124.39 - 14124.52] ( Article 3.3 added November 5, 2024, by initiative Proposition 34, Sec. 1. ) ## 14124.52. Effective Date and Severability (a) This article shall take effect on the next January 1 following its adoption by the voters. (b) The provisions of this article are severable. If any portion, section, subdivision, paragraph, subparagraph, clause, subclause, sentence, phrase, word, or application of this article is for any reason held to be invalid by a decision of any court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this article. The people of the State of California hereby declare that they would have adopted this article and each and every portion, section, subdivision, paragraph, subparagraph, clause, subclause, sentence, phrase, word, and application not declared invalid or unconstitutional without regard to whether any part of this article or application thereof would be subsequently declared invalid. (c) To the extent a court of competent jurisdiction determines it is legally impossible to comply with any date or deadline set forth in this article during the first calendar year after this article takes effect, the people of the State of California hereby declare their intent for this article to be implemented and applied at the earliest possible date consistent with state and federal law. (Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.6. In the event the director orders that oral argument or a hearing be held upon a petition for reinstatement or reduction of penalty filed pursuant to Section 11522 of the Government Code, he or she may hear and decide the matter himself or herself or may, in his or her discretion, either (1) sit and hear the matter with an administrative law judge assigned by the department or (2) assign the matter to an administrative law judge assigned by the department who shall proceed in accordance with Section 100171 of the Health and Safety Code, and who shall prepare a proposed decision for the department for action pursuant to Section 11517 of the Government Code. (Amended by Stats. 1997, Ch. 220, Sec. 38. Effective August 4, 1997.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3. Administration [14100 - 14124.16] ( Article 3 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## 14124.7. (a) No long-term health care facility participating as a provider under the Medi-Cal program shall seek to evict out of the facility or, effective January 1, 2002, transfer within the facility, any resident as a result of the resident changing his or her manner of purchasing the services from private payment or Medicare to Medi-Cal, except that a facility may transfer a resident from a private room to a semiprivate room if the resident changes to Medi-Cal payment status. This section also applies to residents who have made a timely and good faith application for Medi-Cal benefits and for whom an eligibility determination has not yet been made. (b) This section does not apply to any resident of a skilled nursing facility or intermediate care facility, receiving respite care services, as defined in Section 1418.1 of the Health and Safety Code, unless it is already being provided through a Medicaid waiver program pursuant to Section 1396n of Title 42 of the United States Code, or is already allowed as a covered service by the Medi-Cal program. (c) Nothing in this section shall limit a facility’s ability to transfer a resident within a facility, as provided by law, because of a change in a resident’s health care needs or if the bed retention would result in there being no available Medicare-designated beds within a facility. (d) This section shall be implemented only to the extent it does not conflict with federal law. (Amended by Stats. 2000, Ch. 451, Sec. 34. Effective January 1, 2001.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.70. As used in this article: (a) “Carrier” includes any insurer as defined in Section 23 of the Insurance Code, including any private company, corporation, mutual association, trust fund, reciprocal or interinsurance exchange authorized under the laws of this state to insure persons against liability for injuries caused to another, and also any insurer providing benefits under a policy of bodily injury liability insurance covering liability arising out of the ownership, maintenance or use of a motor vehicle which provides uninsured motorist endorsement or coverage, pursuant to Section 11580.2 of the Insurance Code. (b) “Beneficiary” means any person who has received benefits or will be provided benefits under this chapter because of an injury for which another person or party may be liable. It includes such beneficiary’s guardian, conservator or other personal representative, his estate or survivors. (c) “Reasonable value of benefits” means both of the following: (1) Except in a case in which services were provided to a beneficiary under a managed care arrangement or contract, “reasonable value of benefits” means the Medi-Cal rate of payment, for the type of services rendered, under the schedule of maximum allowances authorized by Section 14106 or, the Medi-Cal rate of payment, for the type of services rendered, under regulations adopted pursuant to this chapter, including but not limited, to Section 14105. (2) If services were provided to a beneficiary under a managed care arrangement or contract, “reasonable value of benefits” means the rate of payment to the provider by the plan for the services rendered to the beneficiary, except in cases where the plan pays the provider on a capitated or risk sharing basis, in which case it means the value of the services rendered to the beneficiary calculated by the plan as the usual customary and reasonable charge made to the general public by the provider for similar services. (d) “Lien” means the director’s claim for recovery, from a beneficiary’s tort action or claim, of the reasonable value of benefits provided on behalf of the beneficiary. (Amended by Stats. 2017, Ch. 52, Sec. 30. (SB 97) Effective July 10, 2017.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.71. (a) When benefits are provided or will be provided to a beneficiary under this chapter because of an injury for which another party is liable, or for which a carrier is liable in accordance with the provisions of any policy of insurance issued pursuant to Section 11580.2 of the Insurance Code, the director shall have a right to recover from such a party or carrier the reasonable value of benefits so provided. The Attorney General, or counsel for the fiscal intermediary under the Medi-Cal program with the permission of the Attorney General, or a contractor pursuant to Section 14124.80, or a county through its civil legal adviser, may, to enforce such right, institute and prosecute legal proceedings against the third party or carrier who may be liable for the injury in an appropriate court, either in the name of the director or in the name of the injured person, his guardian, conservator, personal representative, estate, or survivors. (b) The director may: (1) Compromise, or settle and release any such claim in whole or in part with any such party or carrier, or (2) Waive any such claim, in whole or in part, for the convenience of the director, or if the director determines that collection would result in undue hardship upon the person who suffered the injury, or in a wrongful death action upon the heirs of the deceased. (c) No action taken on behalf of the director pursuant to this section or any judgment rendered in such action shall be a bar to any action upon the claim or cause of action of the beneficiary, his guardian, conservator, personal representative, estate, dependents, or survivors against the third party who may be liable for the injury, or shall operate to deny to the beneficiary the recovery for that portion of any damages not covered hereunder. (d) The cost of a service provided to an eligible developmentally disabled Medi-Cal beneficiary under Section 14132.44 may be recovered by the director from a liable third party or carrier. (Amended by Stats. 2017, Ch. 52, Sec. 31. (SB 97) Effective July 10, 2017.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.72. (a) If an action is brought by the director pursuant to Section 14124.71, it shall be commenced within the period prescribed in Section 338 of the Code of Civil Procedure. (b) The death of the beneficiary does not abate any right of action established by Section 14124.71. (c) When an action or claim is brought by persons entitled to bring such actions or assert such claims against a third party who may be liable for causing the death of a beneficiary, any settlement, judgment or award obtained is subject to the director’s right to recover from that party the reasonable value of the benefits provided to the beneficiary under the Medi-Cal program, as provided in subdivision (d). (d) The director’s claim for reimbursement of the benefits provided to the beneficiary shall be limited to the amount of the director’s lien, as defined in subdivision (d) of Section 14124.70. If the action or claim is brought by the beneficiary alone and the beneficiary incurs a personal liability to pay attorney’s fees and costs of litigation, the amount of the director’s lien that is reimbursed shall be reduced by 25 percent, which represents the director’s reasonable share of attorney’s fees paid by the beneficiary, and that portion of the cost of litigation expenses determined by multiplying the actual litigation expenses by the ratio of the amount reimbursed to the director as satisfaction of the director’s lien, prior to deducting reasonable attorney’s fees and litigation expenses, to the full amount of the settlement, judgment, or award. (Amended by Stats. 2017, Ch. 52, Sec. 32. (SB 97) Effective July 10, 2017.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.73. (a) If either the beneficiary or the director brings an action or claim against such third party or carrier, the beneficiary or the director shall within 30 calendar days of filing the action give to the other written notice by personal service, registered mail, or other means of communication deemed appropriate by the department of the action or claim, and of the name of the court or state or local agency in which the action or claim is brought. The purpose of the notice is to provide the beneficiary and the director, as applicable, the opportunity to ensure their interests are adequately represented in an action or claim against a liable third party or carrier. Proof of such notice shall be filed in such action or claim. If an action or claim is brought by either the director or the beneficiary, the other may, at any time before trial on the facts, become a party to, or shall consolidate his action or claim with the other if brought independently. (b) If an action or claim is brought by the director pursuant to subdivision (a) of Section 14124.71, written notice to the beneficiary, guardian, conservator, personal representative, estate or survivor given pursuant to this section shall advise him of his right to intervene in the proceeding, his right to obtain a private attorney of his choice, and the director’s right to recover the amount of the director’s lien, as defined in subdivision (d) of Section 14124.70. (c) Notification of either the beneficiary or the director of an action or claim against a third party or carrier shall include, at a minimum, the following information: (1) The date of the beneficiary’s injury. (2) The beneficiary’s Medi-Cal identification number. (3) The name and contact information of the liable third party or carrier against whom the action or claim has been filed. (4) The name and contact information of the carrier for the party identified in paragraph (3) against which a claim has been or will be filed for the beneficiary’s injury, the carrier’s unique claim identifier for the claim, and the name and contact information of the party responsible for adjudicating the claim on the carrier’s behalf, to the extent these are known by the party providing notice under subdivision (a) at the time such notice is provided. (d) If any information required pursuant to paragraph (4) of subdivision (c) is not known to the party at the time notice pursuant to subdivision (a) is provided, the party providing such notice shall provide such information to the notice recipient within 15 calendar days of obtaining the information. (Amended by Stats. 2017, Ch. 52, Sec. 33. (SB 97) Effective July 10, 2017.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.74. In the event of a settlement, judgment, or award in a suit or claim against a third party or carrier: (a) If the action or claim is prosecuted by the beneficiary alone, the court or agency shall first order paid from any settlement, judgment, or award the reasonable litigation expenses incurred in preparation and prosecution of the action or claim, together with reasonable attorney’s fees, when an attorney has been retained. After payment of these expenses and attorney’s fees the court or agency shall, on the application of the director, allow as a first lien against the amount of the settlement, judgment, or award the amount that the director is entitled to recover as satisfaction of the director’s lien, as provided in subdivision (d) of Section 14124.72, and as a second lien, the amount of any claims, pursuant to Section 14019.3, owed to a provider, as provided in Section 14124.791. (b) If the action or claim is prosecuted both by the beneficiary and the director, the court or agency shall first order paid from any settlement, judgment, or award, the reasonable litigation expenses incurred in preparation and prosecution of the action or claim, together with reasonable attorney’s fees based solely on the services rendered for the benefit of the beneficiary. After payment of these expenses and attorney’s fees, the court or agency shall first apply out of the balance of the settlement, judgment, or award an amount sufficient to reimburse the amount that the director is entitled to recover as satisfaction of the director’s lien, as provided under subdivision (d) of Section 14124.72, and then an amount sufficient to reimburse a provider who has filed a lien for any claims for services rendered to the beneficiary, as provided under Section 14124.791. (Amended by Stats. 2017, Ch. 52, Sec. 34. (SB 97) Effective July 10, 2017.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.75. The court or agency shall, upon further application at any time before the judgment or award is satisfied, allow as a further lien the reasonable value of additional benefits provided arising out of the same cause of action or claim provided on behalf of the beneficiary under the Medi-Cal Program, where such benefits were provided or became payable subsequent to the original order. (Amended by Stats. 1998, Ch. 310, Sec. 102. Effective August 19, 1998.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.76. (a) No settlement, judgment, or award in any action or claim by a beneficiary to recover damages for injuries, where the director has an interest, shall be deemed final or satisfied without first giving the director notice and a reasonable opportunity to perfect and to satisfy the director’s lien. Recovery of the director’s lien from an injured beneficiary’s action or claim is limited to that portion of a settlement, judgment, or award that represents payment for medical expenses, or medical care, provided on behalf of the beneficiary. All reasonable efforts shall be made to obtain the director’s advance agreement to a determination as to what portion of a settlement, judgment, or award that represents payment for medical expenses, or medical care, provided of behalf on the beneficiary. Absent the director’s advance agreement as to what portion of a settlement, judgment, or award represents payment for medical expenses, or medical care, provided on behalf of the beneficiary, the matter shall be submitted to a court for decision. Either the director or the beneficiary may seek resolution of the dispute by filing a motion, which shall be subject to regular law and motion procedures. In determining what portion of a settlement, judgment, or award represents payment for medical expenses, or medical care, provided on behalf of the beneficiary and as to what the appropriate reimbursement amount to the director should be, the court shall be guided by the United States Supreme Court decision in Arkansas Department of Health and Human Services v. Ahlborn (2006) 547 U.S. 268 and other relevant statutory and case law. (b) If the beneficiary has filed a third-party action or claim, the court where the action or claim was filed shall have jurisdiction over a dispute between the director and the beneficiary regarding the amount of a lien asserted pursuant to this section that is based upon an allocation of damages contained in a settlement or compromise of the third-party action or claim. If no third-party action or claim has been filed, any superior court in California where venue would have been proper had a claim or action been filed shall have jurisdiction over the motion. The motion may be filed as a special motion and treated as an ordinary law and motion proceeding and subject to regular motion fees. The reimbursement determination motion shall be treated as a special proceeding of a civil nature pursuant to Part 3 (commencing with Section 1063) of the Code of Civil Procedure. When no action is pending, the person making the motion shall be required to pay a first appearance fee. When an action is pending, the person making the motion shall pay a regular law and motion fee. Notwithstanding Section 1064 of the Code of Civil Procedure, either the beneficiary or the director may appeal the final findings, decision, or order. (c) The court shall issue its findings, decision, or order, which shall be considered the final determination of the parties’ rights and obligations with respect to the director’s lien, unless the settlement is contingent on an acceptable allocation of the settlement proceeds, in which case, the court’s findings, decision, or order shall be considered a tentative determination. If the beneficiary does not serve notice of a rejection of the tentative determination, which shall be based solely upon a rejection of the contingent settlement, within 30 days of the notice of entry of the court’s tentative determination, subject to further consideration by the court pursuant to subdivision (d), the tentative determination shall become final. Notwithstanding Section 1064 of the Code of Civil Procedure, either the beneficiary or the director may appeal the final findings, decision, or order. (d) If the beneficiary does not accept the tentative determination, which shall be based solely upon a rejection of the contingent settlement, any party may subsequently seek further consideration of the court’s findings upon application to modify the prior findings, decision, or order based on new or different facts or circumstances. The application shall include an affidavit showing what application was made before, when, and to what judge, what order or decision was made, and what new or different facts or circumstances, including a different settlement, are claimed to exist. Upon further consideration, the court may modify the allocation in the interest of fairness and for good cause. (Amended by Stats. 2007, Ch. 188, Sec. 71. Effective August 24, 2007.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.77. When the director has perfected a lien upon a judgment or award in favor of a beneficiary against any third party for an injury for which the beneficiary has received benefits under the Medi-Cal Program, the director shall be entitled to a writ of execution as lien claimant to enforce payment of said lien against such third party with interest and other accruing costs as in the case of other executions. In the event the amount of such judgment or award so recovered has been paid to the beneficiary, the director shall be entitled to a writ of execution against such beneficiary to the extent of the director’s lien, with interest and other accruing costs as in the case of other executions. (Added by Stats. 1976, Ch. 621.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.78. Notwithstanding any other provision of law, in no event shall the director recover more than the beneficiary recovers after deducting, from the settlement judgment, or award, attorney’s fees and litigation costs paid for by the beneficiary. If the director’s recovery is determined under this section, the reductions in subdivision (d) of Section 14124.72 shall not apply. (Amended by Stats. 2007, Ch. 188, Sec. 72. Effective August 24, 2007.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.785. The director’s recovery is limited to the amount derived from applying Section 14124.72, 14124.76, or 14124.78, whichever is less, to the total settlement, judgment, or award amount upon resolution of all actions or claims associated with the injury with regard to each and every defendant. All statutes of limitations related to the recovery of the director’s lien are tolled until the director receives notification of the resolution of all actions or claims associated with the injury with regard to each and every defendant. (Amended by Stats. 2017, Ch. 52, Sec. 35. (SB 97) Effective July 10, 2017.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.79. In the event that the beneficiary, his guardian, conservator, personal representative, estate or survivors or any of them brings an action against the third person who may be liable for the injury, notice of institution of legal proceedings, notice of settlement and all other notices required by this code shall be given to the director in Sacramento except in cases where the director specifies that notice shall be given to the Attorney General. All such notices shall be given by insurance carriers, as described in Section 14124.70, having liability for the beneficiary’s claim, and by the attorney retained to assert the beneficiary’s claim, or by the injured party beneficiary, his guardian, conservator, personal representative, estate or survivors, if no attorney is retained. (Amended by Stats. 2003, Ch. 230, Sec. 69. Effective August 11, 2003.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.791. (a) Subject to the director’s prior right of recovery, a provider who has rendered services to a beneficiary because of an injury for which a third party is liable and who has received payment under the Medi-Cal program shall be entitled to file a lien for all fees for services provided to the beneficiary against any judgment, award, or settlement obtained by the beneficiary or the director against that third party. A provider may only recover upon the lien if the provider has made a full reimbursement of any fees paid by the department for those services. (b) If either the beneficiary or the director brings an action or claim against the third party, the party bringing the action shall, within 30 days of bringing the action, give written notice to any provider who is eligible to file a lien under subdivision (a) of the action and of the name of the court or state or local agency in which the action or claim is brought. Notice shall be given by personal service or registered mail, and proof of service shall be filed in the action or claim. (c) The provider’s claim for reimbursement for fees for services rendered to the beneficiary shall be limited to the amount of the fees less 25 percent, which represents the provider’s reasonable share of attorneys’ fees for prosecution of the action and of the cost of litigation expense. (d) No claim authorized by this section shall be permitted to the extent that the claim would reduce the director’s right to recover pursuant to Section 14124.78. (Amended by Stats. 1992, Ch. 722, Sec. 108.7. Effective September 15, 1992.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.792. If any provision of this article, or the application of any provision of this article to any person, firm, corporation, or other entity or to any circumstance or situation, shall be held invalid, the remaining provisions of this article shall not be affected thereby, and shall be given effect. (Added by Stats. 2007, Ch. 188, Sec. 74. Effective August 24, 2007.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.795. It is the intent of the Legislature to comply with federal law requiring that when a beneficiary has other available health coverage or insurance, the Medi-Cal program shall be the payer of last resort. Notwithstanding any other provision of law, any carrier described in Section 14124.70, including automobile, casualty, property, and malpractice insurers, shall enter into an agreement with the department to permit and assist the matching of the department’s Medi-Cal eligibility file against the carrier’s claim files, utilizing, if necessary, social security numbers as common identifiers for the purpose of determining whether Medi-Cal benefits were provided to a beneficiary because of an injury for which another person is liable, or for which a carrier is liable in accordance with the provisions of any policy of insurance. The carrier shall maintain a centralized file of claimants’ names, mailing addresses, and social security numbers or dates of birth. This information shall be made available to the department upon the department’s reasonable request. The agreement described in this section shall include financial arrangements for reimbursing carriers for necessary costs incurred in furnishing requested information. (Added by Stats. 2003, Ch. 230, Sec. 70. Effective August 11, 2003.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.81. (a) The department shall administer the provisions of Sections 14124.82 to 14124.86, inclusive, pertaining to the State Department of Health Care Services’ administration of the personal injury and workers’ compensation recovery programs. (b) An attorney or the beneficiary, guardian, personal representative, estate, or survivors of any of those, who are mandated under Section 14124.79 to report Medi-Cal involvement are excluded from any further remuneration benefits under Sections 14124.82 to 14124.86, inclusive. (Repealed and added by Stats. 2017, Ch. 52, Sec. 38. (SB 97) Effective July 10, 2017.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.82. (a) The department, in its reasonable discretion, may execute one or more at-risk performance contracts to identify, quantify, or recover, or any combination thereof, Medi-Cal payments from responsible third parties and carriers that may be subject to a claim for reimbursement. (b) Priority, by the terms of the contract or contracts, shall be given to the identification and recovery of claims nearing the statute of limitation, prior adjudicated claims, and prior existing injury claims. However, all claims that are older, in whole or part, than 12 months, at the time of discovery and notification by the contractor to the department, shall be subject to contractual lien recovery unless departmental personnel have previously identified these claims and have filed appropriate liens, notices, or other payment demands. A claim arises and the 12-month period begins when the department or its fiscal agent has first made payment for medical services related to the personal or workers’ compensation action on behalf of a given recipient. The department may waive any time requirement, if it concludes that it will not otherwise discover the claim and be able to effect recovery. (c) To implement this section, the department may contract with public or private entities. Contracts or amendments entered into under this section may be on an exclusive or nonexclusive basis, and on a noncompetitive bid basis. The contracts and amendments shall be exempt from all of the following: (1) Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and any policies, procedures, or regulations authorized by that part. (2) Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code. (3) Review or approval of contracts by the Department of General Services. (Amended by Stats. 2017, Ch. 52, Sec. 39. (SB 97) Effective July 10, 2017.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.83. The agreement shall include, but is not limited to, the following provisions: (a) The agreement shall stipulate when the contractor may identify, quantify, or recover amounts owing by third parties that may be subject to a claim for reimbursement. (b) Payment to the contractor shall be based upon a no cost percentage of recovery formula, which shall not exceed 25 percent of the gross recovery upon the claim. It is the intent of the Legislature that “no cost” include all considerations for court costs, legal fees, and the universe of the case processing activity, not including, however, departmental processing. (c) Payment for amounts determined to be owed to the state by third parties and carriers shall be made directly to the state. (d) A bond in the amount required by the state for collection agencies shall be sufficient. (e) Contractor’s files shall be subject to audit, pursuant to the contract, but shall remain the property of the contractor. At the request of the department, the contractor shall provide copies of any claims related to a particular recovery. (f) The contractor shall report periodically to the department concerning its progress in the discovery of cases and the recovery of amounts subject to claim, and shall provide other information as the department may require, and at a reasonable frequency, to adequately monitor the progress of the contractor. (Amended by Stats. 2017, Ch. 52, Sec. 40. (SB 97) Effective July 10, 2017.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.84. The department shall provide the contractor with such information as is reasonably necessary for the contractor to perform its obligations under the contract, including accounting data and other information the contractor may request. (Added by Stats. 1981, Ch. 102, Sec. 122. Effective June 28, 1981.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.86. The contractor shall retain its rights to compensation upon recovery for completed duties under the contract with respect to any claims or liens processed in whole or in part prior to the termination date of the agreement. (Repealed and added by Stats. 2017, Ch. 52, Sec. 43. (SB 97) Effective July 10, 2017.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.89. (a) (1) This section applies to all of the following entities: (A) Health insurer, or any health care entity licensed through the Department of Insurance. (B) Self-insured plan. (C) Group health plan, as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974. (D) Service benefit plan. (E) Managed care organization, including a health care service plan as defined in subdivision (f) of Section 1345 of the Health and Safety Code, licensed pursuant to the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code). (F) Pharmacy benefit manager. (G) Third-party administrator. (H) Union trust. (I) Other party that is, by statute, contract, or agreement, legally responsible for payment of a claim for a health care item or service. (2) The entities listed in paragraph (1) shall, upon request of the department for any records, or any information contained in records pertaining to an individual or group health insurance policy or plan issued by such insurer or plan against, or pertaining to the medical or dental benefits paid by or claims made against such insurer or plan under a policy or plan, make the requested records or information available upon a certification by the department that the individual is an applicant for or recipient of services under this chapter or is a person who is legally responsible for such an applicant or recipient. (b) The entities listed in paragraph (1) of subdivision (a) shall enter into a cooperative agreement with the department setting forth mutually agreeable procedures for the provision of appropriate information, not inconsistent with any law pertaining to the confidentiality and privacy of medical records, at no cost to the department, within 90 days of the department’s request. (c) The information required to be made available pursuant to this section shall be limited to information necessary to determine whether health benefits have been or should have been claimed and paid pursuant to a health insurance policy or plan with respect to items of medical care and services received by a particular individual for which Medi-Cal coverage would otherwise be available. (d) Not later than the date upon which the procedures agreed to pursuant to subdivision (b) become effective, the director shall establish guidelines to assure that information relating to an individual certified to be an applicant for or recipient of medical assistance, furnished to any insurer or plan pursuant to this section, is used only for the purpose of identifying the records or information requested in such manner so as not to violate the confidentiality of an applicant or recipient. (Amended by Stats. 2021, Ch. 143, Sec. 381. (AB 133) Effective July 27, 2021.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.90. (a) (1) It is the intent of the Legislature to comply with federal law requiring that when a beneficiary has third-party health coverage or insurance, the State Department of Health Care Services shall be the payer of last resort. (2) In order to assess overlapping or duplicate health coverage and adjudicate claims, all of the following entities shall maintain a centralized file of the eligibility and coverage information for each subscriber, policyholder, enrollee, or insured: (A) Health insurer or any health care entity licensed through the Department of Insurance. (B) Self-insured plan. (C) Group health plan, as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974. (D) Service benefit plan. (E) Managed care organization, including a health care service plan as defined in subdivision (f) of Section 1345 of the Health and Safety Code, licensed pursuant to the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code). (F) Pharmacy benefit manager. (G) Third-party administrator. (H) Union trust. (I) Other party that is, by statute, contract, or agreement, legally responsible for payment of a claim for a health care item or service. (b) (1) The eligibility and coverage information shall include, at a minimum, all of the following information about a subscriber, policyholder, enrollee, or insured: (A) Full name. (B) Address. (C) Date of birth. (D) Social security number. (E) Policy number. (F) Group identification number. (G) Policy or plan type. (H) Types of covered services under the policy or plan. (I) Effective dates of coverage. (J) Policy or plan termination date. (2) For any other persons covered under the policy or plan, if any, the eligibility and coverage information shall include, at a minimum, all of the following information: (A) Full name. (B) Social security number. (C) Date of birth. (D) Place of birth. (E) Parents’ names, if applicable. (c) The information described in subdivision (b) shall be provided to the State Department of Health Care Services at least once a month, in a format provided by the department. The information shall also be provided to the department’s agents and contracted Medi-Cal managed care plans, upon reasonable request, to perform cost avoidance on behalf of the department. (d) An entity listed in subdivision (a) shall provide to the department access to real-time, electronic eligibility verification, at no cost, and in a form and manner specified by the department, as is necessary to conduct its coordination of benefits responsibilities pursuant to this section. (e) Notwithstanding Section 20134 of the Government Code, the Board of Administration of the California Public Employees’ Retirement System and affiliated systems or contract agencies shall permit data matches with the state department to identify Medi-Cal beneficiaries with third-party health coverage or insurance. A recipient’s Medi-Cal identification card shall, where information is available, contain information advising providers of health care services of any third-party health coverage for the recipient. Providers shall seek reimbursement from available third-party health coverage before billing the Medi-Cal program. (f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of policy letter, information notice, or other similar instruction, without taking any further regulatory action. (Repealed and added by Stats. 2021, Ch. 143, Sec. 383. (AB 133) Effective July 27, 2021.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.91. The State Department of Health Services shall, whenever it is cost-effective, pay the premium for third-party health coverage for beneficiaries under this chapter. The State Department of Health Services shall, when a beneficiary’s third-party health coverage would lapse due to loss of employment or change in health status, lack of sufficient income or financial resources, or any other reason, continue the health coverage by paying the costs of continuation of group coverage pursuant to federal law or converting from a group to an individual plan, whenever it is cost-effective. Notwithstanding any other provision of a contract or of law, the time period for the department to exercise either of these options shall be 60 days from the date of lapse of the policy. (Amended by Stats. 1992, Ch. 722, Sec. 109. Effective September 15, 1992. Note: The amendment by Stats. 2003, Ch. 673, did not take effect because Ch. 673 was rejected as referendum Proposition 72 at the November 2, 2004, election.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.92. (a) The department may pay administrative expenses and make incentive payments to any county, state, or federal agency, or a contracting agent of the department for identifying and reporting third-party health care coverage held or offered to beneficiaries under this chapter. (b) Unless the third-party health care coverage identified is excluded under subdivision (d) from the incentive payment plan, an agency or contractor may be entitled to an incentive payment if the agency or contractor does all of the following: (1) Identifies a case of which the department was not previously aware. (2) Provides to the department adequate and necessary information relevant to the third-party health care coverage in order to make a claim for benefits or reimbursement for services rendered that would otherwise be paid by Medi-Cal. (3) Reports to the department the identified third-party health care coverage within 30 days of the date of discovery on a form approved by the department. (c) In no event shall any one incentive for each case identified exceed one month of savings received by the department for benefits paid by the third-party health care coverage. (d) Third-party health care coverage that does not qualify for the incentive payment plan under this section shall be identified by the department based on policy limitations and cost-effectiveness. The types of coverage that do not qualify under this section include those that to which any of the following apply: (1) Not specifically intended to provide third-party health care coverage, such as coverage that provides life or car insurance benefits, periodic benefits for disability or hospitalization, or income protection. (2) Coverage is limited to a specific diagnosis, unless the beneficiary has been diagnosed with a condition or disease specified in the coverage. (3) Coverage is limited to a specific circumstance, such as accidental injury or dismemberment. (4) Coverage is limited to one specific category of service. (e) For the purposes of this section, “third-party health care coverage” means health care service plans, benefits, insurance policies, and funds, including those described in Section 14124.90. (Added by Stats. 1992, Ch. 722, Sec. 110. Effective September 15, 1992.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.5. Third Party Liability [14124.70 - 14124.94] ( Article 3.5 added by Stats. 1976, Ch. 621. ) ## 14124.94. (a) When the rights of a Medi-Cal beneficiary to health care benefits from an insurer have been assigned to the department, an insurer shall not impose any requirement on the department that is different from any requirement applicable to an agent or any assignee of the covered beneficiary. (b) The department, in the administration of the Medi-Cal program, may garnish the wages, salary, or other employment income of, and withhold amounts from state tax refunds from, any person to whom both of the following apply: (1) The person is required by a court or administrative order to provide coverage of the costs of health services to a child who is eligible for medical assistance under the Medi-Cal program. (2) The person has received payment from a third party for the costs of the health services for the child, but he or she has not used the payments to reimburse, as appropriate, either the other parent or the person having custody of the child, or the provider of the health services, to the extent necessary to reimburse the department for expenditures for those costs under the Medi-Cal program. All claims for current or past due child support shall take priority over claims made by the department for the costs of Medi-Cal services. (c) For purposes of this section, “insurer” includes every health insurer, self-insured plan, group health plan, as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974, service benefit plan, managed care organization, including health care service plans as defined in subdivision (f) of Section 1345 of the Health and Safety Code, licensed pursuant to the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code), pharmacy benefit manager, or other party that is, by statute, contract, or agreement, legally responsible for payment of a claim for a health care item or service. (Amended by Stats. 2007, Ch. 188, Sec. 77. Effective August 24, 2007.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.7. Incontinence Medical Supplies [14125 - 14125.9] ( Article 3.7 added by Stats. 1990, Ch. 456, Sec. 33. ) ## 14125. (a) The purpose of this article is to establish provider reimbursement rates for incontinence medical supplies covered by the Medi-Cal program. Reimbursement for incontinence medical supplies shall consist of the negotiated contract prices within each product category, plus a markup fee equal to 38 percent of the contract price. (b) (1) In establishing the list of incontinence medical supplies, the department may enter into exclusive or nonexclusive contracts on a bid or negotiated basis with manufacturers, distributors, dispensers, or suppliers of incontinence medical supplies. (2) To ensure that the health needs of Medi-Cal beneficiaries are met, the department shall, when evaluating a decision to execute a contract, and when evaluating incontinence medical supplies for retention on, addition to, or deletion from, the list of incontinence medical supplies, consider all of the following criteria: (A) The safety of the product. (B) The effectiveness of the product. (C) The essential need for the product. (D) The potential for misuse of the product. (E) The immediate or long-term cost-effectiveness of the product. (3) The deficiency of a product when measured by one of the criteria specified in paragraph (2) may be sufficient to support a decision that the product should be deleted from, should not be added to, or should not be retained on, the list of medical supplies. However, the superiority of a product under one criterion may be sufficient to warrant the addition or retention of the product, notwithstanding a deficiency in another criterion. (4) In the evaluation of the effectiveness of a product, the department may require the manufacturer, distributor, dispenser, or supplier to submit their products to testing by an independent laboratory. For the purposes of this section, “independent laboratory” means an analytical laboratory that is not a subsidiary of, affiliated with, or on retainer for, the manufacturer, distributor, dispenser, or supplier. (c) The department may use Healthcare Common Procedure Code System codes or Universal Product Number codes for the processing and payment of incontinence medical supplies. (Amended by Stats. 2007, Ch. 188, Sec. 78. Effective August 24, 2007.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.7. Incontinence Medical Supplies [14125 - 14125.9] ( Article 3.7 added by Stats. 1990, Ch. 456, Sec. 33. ) ## 14125.1. Unless the context requires otherwise, the definitions set forth in this section shall govern the construction and meaning of the terms and phrases used in this article. (a) “Incontinence medical supplies” means disposable medical supplies that are covered benefits under the Medi-Cal program pursuant to subdivision (s) of Section 14132 when prescribed by a physician for the treatment of individuals who are incontinent. Incontinence medical supplies include, but are not limited to, disposable diapers, briefs, underpads, undergarments, liners or pads, pant and pad systems, and skin care products. (b) “Department” means the State Department of Health Services. (c) “Manufacturer” means any person, partnership, or corporation who assembles or combines the components of incontinence supplies into a final product sold to dealers. (d) “Principal labeler” means any person, partnership, or corporation who purchases from a manufacturer an assembled product which is sold to dealers under the principal labeler’s label. (e) “Dealer” means any person, partnership, corporation, or other entity that is recognized by the manufacturer or principal labeler as a provider or retail outlet for its line of incontinence medical supplies, and which provide these supplies directly to consumers. The term “dealer” includes a retailer. (Amended by Stats. 1992, Ch. 722, Sec. 112. Effective September 15, 1992.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.7. Incontinence Medical Supplies [14125 - 14125.9] ( Article 3.7 added by Stats. 1990, Ch. 456, Sec. 33. ) ## 14125.2. (a) (1) To qualify for Medi-Cal coverage a product shall be in general retail distribution, sold to the general public, and comply with any standards for products established by law or regulation. No product that is manufactured, distributed, or otherwise promoted for the exclusive use of beneficiaries of the Medi-Cal program shall be a Medi-Cal benefit. (2) For purposes of this section, “product” means any product which is in general retail distribution. (3) For purposes of this subdivision, “general retail distribution” means either of the following: (A) The product is included in a listing of approved products for purchase either by the federal or state government. (B) The product is on display and available for purchase by customers for private payment at licensed pharmacies or licensed medical supply dealers within California which are physical locations open to the general public. (b) In order to qualify as a Medi-Cal provider of incontinence medical supplies, a dealer shall have an established place of business that is readily identifiable as a medical supply business, be open to the general public at regularly established business hours, have incontinence supplies in stock on the premises or in a warehouse under the provider’s direct control, and meet all local laws and ordinances regarding business licensing and operations. The department shall establish additional rules and regulations for participation in the Medi-Cal program as it deems necessary to ensure adequate safeguards to the integrity of the Medi-Cal program. (Amended by Stats. 2007, Ch. 188, Sec. 79. Effective August 24, 2007.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.7. Incontinence Medical Supplies [14125 - 14125.9] ( Article 3.7 added by Stats. 1990, Ch. 456, Sec. 33. ) ## 14125.3. The department shall reduce the weighted average of the negotiated contract prices within each product category in effect on June 30, 1992, as follows: (a) For all premium underpads, as defined by the department, by 24 percent. (b) For all other incontinence medical supply products, as defined by the department, by 14 percent. (Repealed and added by Stats. 1992, Ch. 1106, Sec. 4. Effective January 1, 1993.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.7. Incontinence Medical Supplies [14125 - 14125.9] ( Article 3.7 added by Stats. 1990, Ch. 456, Sec. 33. ) ## 14125.4. (a) No later than January 1, 1994, the department shall establish utilization controls that limit expenditures for incontinence medical supplies per beneficiary to no more than one hundred sixty-five dollars ($165) per month. Incontinence creams and washes shall be excluded from this limitation. The expenditure limit established by this section may be adjusted in the annual Budget Act to reflect changes in wholesale prices. These utilization controls shall be published in provider bulletins. (b) The department shall, by prior authorization, allow a beneficiary to exceed the utilization limits established by this section when justified to the department’s satisfaction not later than January 1, 1994. (c) Notwithstanding any other provision of law, no regulations shall be necessary to define the incontinence medical supplies subject to the reductions required in Section 14125.3, or to establish and implement the utilization controls required in this section. (Amended by Stats. 1994, Ch. 813, Sec. 3. Effective January 1, 1995.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.7. Incontinence Medical Supplies [14125 - 14125.9] ( Article 3.7 added by Stats. 1990, Ch. 456, Sec. 33. ) ## 14125.8. (a) In order to more fully identify the owner or owners of companies or corporations that apply to be or currently are providers of incontinence medical supplies, within 30 days of the receipt of a request from the department, or a request to the department from the Department of Justice, the applicant or provider shall provide, as part of the application process or as a condition of continued participation in the Medi-Cal program, the following: (1) The name of the corporation, the official titles of the applicants, and a list of all the corporate officers. (2) The California driver’s license or California identification card number of the applicants, coowners, corporate officers, and financially interested parties. (3) The applicant’s business permit control number, issued by the State Board of Equalization, for the business location where services are rendered to the public. (4) A statement of all current sources of capital, identity of all investors, disclosure of all manufacturers, suppliers, and providers currently doing business with the applicant, and disclosure of all entities to whom the applicant has extended a line of credit. (5) A statement certifying that all information supplied pursuant to this section is accurate. (b) A Medi-Cal provider of incontinence supplies shall not submit a claim for goods or services to the department prior to the date the goods or services are delivered to the Medi-Cal beneficiary. The date of delivery to a beneficiary shall be the earlier of the date the beneficiary actually received the goods or services, or the date the goods were posted or otherwise dispatched from the provider’s premises and control. A claim submitted to the department prior to the date of delivery shall not be paid. Violation of this subdivision shall be grounds for expulsion from the Medi-Cal program. (c) The department may implement a 180-day moratorium on the enrollment of new providers or new business addresses for incontinence medical supply dealers when the department determines this action is necessary to safeguard public funds or to maintain the fiscal integrity of the program. (Amended by Stats. 2007, Ch. 188, Sec. 80. Effective August 24, 2007.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.7. Incontinence Medical Supplies [14125 - 14125.9] ( Article 3.7 added by Stats. 1990, Ch. 456, Sec. 33. ) ## 14125.9. Nothing in this article shall be interpreted as limiting or interfering in any way with the department’s authority to contract for the provision of incontinence medical supplies pursuant to subdivision (b) of Section 14105.3. (Amended by Stats. 2006, Ch. 538, Sec. 705. Effective January 1, 2007.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126. This article shall be known as the Medi-Cal Long-Term Care Reimbursement Act. (Repealed and added by Stats. 2004, Ch. 875, Sec. 5. Effective September 29, 2004. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.02. (a) It is the intent of the Legislature to devise a Medi-Cal long-term care reimbursement methodology that more effectively ensures individual access to appropriate long-term care services, promotes quality resident care, advances decent wages and benefits for nursing home workers, supports provider compliance with all applicable state and federal requirements, and encourages administrative efficiency. (b) The department shall implement a facility-specific ratesetting system, subject to federal approval and the availability of federal funds, that reflects the costs and staffing levels associated with quality of care for residents in nursing facilities, as defined in subdivision (c) of Section 1250 of the Health and Safety Code, except that the ratesetting system shall not apply to a unit that provides pediatric subacute services in a skilled nursing facility, or to a skilled nursing facility that is designated as an institution for mental diseases, as defined in Section 1396d(i) of Title 42 of the United States Code. The facility-specific ratesetting system shall be effective commencing on August 1, 2005, and shall be implemented commencing on the first day of the month following federal approval. The department may retroactively increase and make payment of rates to facilities. (c) In implementing this section, the department may contract as necessary, on a bid or nonbid basis, for professional consulting services from nationally recognized higher education and research institutions, or other qualified individuals and entities not associated with a skilled nursing facility, with demonstrated expertise in long-term care reimbursement systems. The ratesetting system specified in subdivision (b) shall be developed with all possible expedience. This subdivision establishes an accelerated process for issuing contracts pursuant to this section and contracts entered into pursuant to this subdivision shall be exempt from the requirements of Chapter 1 (commencing with Section 10100) and Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code. (d) The department shall implement a facility-specific ratesetting system by August 1, 2004, subject to federal approval and availability of federal or other funds, that reflects the costs and staffing levels associated with quality of care for residents in hospital-based nursing facilities. (Amended by Stats. 2005, Ch. 508, Sec. 8. Effective October 4, 2005. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.021. The department shall develop and implement a cost-based reimbursement rate methodology using the cost categories as described in Section 14126.023, for freestanding nursing facilities pursuant to this article, excluding nursing facilities that are a distinct part of a facility that is licensed as a general acute care hospital as identified pursuant to subdivision (d) of Section 14126.02. The cost-based reimbursement rate methodology shall be effective on August 1, 2005, and shall be implemented on the first day of the month following federal approval. (Added by Stats. 2004, Ch. 875, Sec. 5. Effective September 29, 2004. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.023. (a) The methodology developed pursuant to this article shall be facility specific and reflect the sum of the projected cost of each cost category and passthrough costs, as follows: (1) Labor costs limited as specified in subdivisions (d) and (e). (2) Indirect care nonlabor costs limited to the 75th percentile. (3) (A) Administrative costs limited to the 50th percentile. (B) Notwithstanding subparagraph (A), beginning with the 2010–11 rate year and in each subsequent rate or calendar year, the administrative cost category shall exclude any legal and consultant fees in connection with a fair hearing or other litigation against or involving any governmental agency or department until all issues related to the fair hearing or litigation issues are ultimately decided or resolved. (C) Notwithstanding subparagraph (A), beginning with the 2010–11 rate year and in each subsequent rate or calendar year, the department shall not allow any cost associated with legal or consultant fees in connection with a fair hearing or other litigation against any governmental agency or department if any of the following apply: (i) A decision has been rendered in favor of the governmental agency or department. (ii) The determination of the governmental agency or department otherwise stands. (iii) A settlement or similar resolution has been reached on any citation issued under subdivision (c), (d), or (e) of Section 1424 of the Health and Safety Code or on any remedy imposed under Subpart F of Part 489 of Title 42 of the Code of Federal Regulations. (iv) A settlement or similar resolution has been reached under Section 14123 or 14171. (D) Facilities shall report supplemental data required to disallow costs described in subparagraph (C) in a format and by the deadline determined by the department. (4) Capital costs based on a fair rental value system (FRVS) limited as specified in subdivision (f). (5) (A) Direct passthrough of proportional Medi-Cal costs for property taxes, facility license fees, new state and federal mandates, caregiver training costs, and liability insurance projected on the prior year’s costs. (i) Eligible caregiver training costs include any and all trainings that enhance the skills, education, or career advancement for nursing home workers. (ii) Trainings provided through a joint labor-management Taft-Hartley fund are eligible for the direct pass through of proportional Medi-Cal costs. (B) (i) Notwithstanding subparagraph (A), for the 2010–11 rate year and each rate or calendar year thereafter, professional liability insurance costs, including any insurance deductible costs paid by the facility, shall be limited to the 75th percentile computed on a specific geographic peer group basis. (ii) Facilities shall report supplemental data described in this subparagraph in a format and by the deadline determined by the department, or the insurance deductible costs shall continue to be reimbursed in the administrative cost category. (b) (1) The percentiles in paragraphs (1) through (3) of subdivision (a) shall be based on annualized costs divided by total resident days and computed on a specific geographic peer group basis. Costs within a specific cost category shall not be shifted to any other cost category. (2) Notwithstanding paragraph (1), for the 2010–11 rate year, and each rate or calendar year thereafter, the percentiles in paragraphs (1) to (5), inclusive, of subdivision (a) shall be based on annualized audited costs divided by total resident days and computed on a specific geographic peer group basis. Costs within a specific category shall not be shifted to any other cost category. (3) Effective August 1, 2020, the department shall continue to establish the specific geographic peer groups on the basis of, but need not be limited to, similar or common facility characteristics as determined by the department in consultation with stakeholders. The department may periodically review and change the number and assignment of peer groups and the peer group placement of an individual facility. Peer group assignments shall be effective for the duration of the rate or calendar year. (c) (1) Facilities newly certified to participate in the Medi-Cal program shall receive a reimbursement rate based on the peer group weighted average Medi-Cal reimbursement rate. Facilities shall continue to receive the peer group weighted average Medi-Cal reimbursement rate until either of the following conditions is met: (A) The department shall calculate the Freestanding Skilled Nursing Facility-B facility specific rate when a minimum of six months of Medi-Cal cost data has been audited. The facility specific rate shall be calculated prospectively and shall be effective on August 1 of each rate year or January 1 of each calendar year period, as applicable, pursuant to Section 14126.021. (B) The department shall calculate the Freestanding Subacute Skilled Nursing Facility-B facility specific rate when a cost report with a minimum of 12 months of Medi-Cal cost data has been audited. The facility specific rate shall be calculated prospectively and shall be effective on August 1 of each rate year or January 1 of each calendar year period, as applicable, pursuant to Section 14126.021. (2) Facilities that have been decertified for less than six months and upon recertification shall continue to receive the facility per diem reimbursement rate in effect prior to decertification. Facilities shall continue to receive the facility per diem reimbursement rate until either of the following conditions is met: (A) The department shall calculate the Freestanding Skilled Nursing Facility-B facility specific rate when a minimum of six months of Medi-Cal cost data has been audited. The facility specific rate based on the audited six months of Medi-Cal cost data shall be calculated prospectively and shall be effective on August 1 of each rate year or January 1 of each calendar year period, as applicable, pursuant to Section 14126.021. (B) The department shall calculate the Freestanding Subacute Skilled Nursing Facility-B facility specific rate when a cost report with a minimum of 12 months of Medi-Cal cost data has been audited. The facility-specific rate shall be calculated prospectively and shall be effective on August 1 of each rate year or January 1 of each calendar year period, as applicable, pursuant to Section 14126.021. (3) Facilities that have been decertified for six months or longer and upon recertification shall receive a reimbursement rate based on the peer group weighted average Medi-Cal reimbursement rate. Facilities shall continue to receive the peer group weighted average Medi-Cal reimbursement rate until either of the following conditions is met: (A) The department shall calculate the Freestanding Skilled Nursing Facility-B facility specific rate when a minimum of six months of Medi-Cal cost data has been audited. The facility-specific rate shall be calculated prospectively and shall be effective on August 1 of each rate year or January 1 of each calendar year period, as applicable, pursuant to Section 14126.021. (B) The department shall calculate the Freestanding Subacute Skilled Nursing Facility-B facility specific rate when a cost report with a minimum of 12 months of Medi-Cal cost data has been audited. The facility-specific rate shall be calculated prospectively and shall be effective on August 1 of each rate year or January 1 of each calendar year period, as applicable, pursuant to Section 14126.021. (4) Facilities that have a change of ownership or change of the licensed operator shall continue to receive the facility per diem reimbursement rate in effect with the previous owner. Facilities shall continue to receive the facility per diem reimbursement rate until either of the following conditions is met: (A) The department shall calculate the Freestanding Skilled Nursing Facility-B facility specific rate when a minimum of six months of Medi-Cal cost data has been audited. The facility-specific rate shall be calculated prospectively and shall be effective on August 1 of each rate year or January 1 of each calendar year period, as applicable, pursuant to Section 14126.021. (B) The department shall calculate the Freestanding Subacute Skilled Nursing Facility B facility-specific rate when a cost report with a minimum of 12 months of Medi-Cal cost data has been audited. The facility-specific rate shall be calculated prospectively and shall be effective on August 1 of each rate year or January 1 of each calendar year period, as applicable, pursuant to Section 14126.021. (d) The labor costs category shall be comprised of a direct resident care labor cost category, an indirect care labor cost category, and a labor-driven operating allocation cost category, as follows: (1) Direct resident care labor cost category, which shall include all labor costs related to routine nursing services including all nursing, social services, activities, and other direct care personnel. These costs shall be limited to the 90th percentile through the conclusion of the 2019–20 rate year. Beginning for the rate period of August 1, 2020, to December 31, 2020, inclusive, and each subsequent calendar year thereafter, these costs shall be limited to the 95th percentile. (2) Indirect care labor cost category, which shall include all labor costs related to staff supporting the delivery of patient care including, but not limited to, housekeeping, laundry and linen, dietary, medical records, inservice education, and plant operations and maintenance. These costs shall be limited to the 90th percentile through the conclusion of the 2019–20 rate year. Beginning for the rate period of August 1, 2020, to December 31, 2020, inclusive, and each subsequent calendar year thereafter for which this article is operative, these costs shall be limited to the 95th percentile. (3) Labor-driven operating allocation shall include an amount equal to 8 percent of labor costs, minus expenditures for temporary staffing, which may be used to cover allowable Medi-Cal expenditures. In no instance shall the operating allocation exceed 5 percent of the facility’s total Medi-Cal reimbursement rate. (e) Notwithstanding subdivision (d), beginning with the 2010–11 rate year and each rate or calendar year thereafter, the labor cost category shall not include the labor-driven operating allocation and shall be comprised only of a direct resident care labor cost category and an indirect care labor cost category. (f) The capital cost category shall be based on a FRVS that recognizes the value of the capital related assets necessary to care for Medi-Cal residents. The capital cost category includes mortgage principal and interest, leases, leasehold improvements, depreciation of real property, equipment, and other capital related expenses. The FRVS methodology shall be based on the formula developed by the department that assesses facility value based on age and condition and uses a recognized market interest factor. Capital investment and improvement expenditures included in the FRVS formula shall be documented in cost reports or supplemental reports required by the department. The capital costs based on FRVS shall be limited as follows: (1) For the 2005–06 rate year, the capital cost category for all facilities in the aggregate shall not exceed the department’s estimated value for this cost category for the 2004–05 rate year. (2) For the 2006–07 rate year and subsequent rate years, the maximum annual increase for the capital cost category for all facilities in the aggregate shall not exceed 8 percent of the prior rate year’s FRVS cost component. (3) If the total capital costs for all facilities in the aggregate for the 2005–06 rate year exceeds the value of the capital costs for all facilities in the aggregate for the 2004–05 rate year, or if that capital cost category for all facilities in the aggregate for the 2006–07 rate year or any rate year thereafter exceeds 8 percent of the prior rate year’s value, the department shall reduce the capital cost category for all facilities in equal proportion in order to comply with paragraphs (1) and (2). (g) For the 2005–06 and 2006–07 rate years, the facility specific Medi-Cal reimbursement rate calculated under this article shall not be less than the Medi-Cal rate that the specific facility would have received under the rate methodology in effect as of July 31, 2005, plus Medi-Cal’s projected proportional costs for new state or federal mandates for rate years 2005–06 and 2006–07, respectively. (h) The department shall annually update each facility specific rate calculated under this methodology. The update process shall be prescribed in the Medicaid State Plan, regulations, and the provider bulletins or similar instructions described in Section 14126.027, and shall be adjusted in accordance with the results of facility specific audit and review findings in accordance with subdivisions (i), (j), and (k). (i) (1) The department shall establish rates pursuant to this article on the basis of facility cost data reported in the integrated long-term care disclosure and Medi-Cal cost report required by Section 128730 of the Health and Safety Code for the most recent reporting period available, and cost data reported in other facility financial disclosure reports or supplemental information required by the department in order to implement this article. (2) Notwithstanding paragraph (1), or any other law, beginning with the 2010–11 rate year, and each rate or calendar year thereafter, the department shall establish rates pursuant to this article on the basis of facility audited cost data pursuant to subdivision (c), reported in the integrated long-term care disclosure and Medi-Cal cost report described in Section 128730 of the Health and Safety Code and audited cost data reported in other facility financial disclosure reports or audited supplemental information required by the department in order to implement this article. (3) Notwithstanding paragraph (1), or any other law, beginning with the 2010–11 rate year through December 31, 2022, the department may determine a facility ineligible to receive supplemental payments pursuant to Section 14126.022 if a facility fails to provide supplemental data as requested by the department. (j) The department shall conduct financial audits of facility and home office cost data as follows: (1) The department shall audit facilities a minimum of once every three years to ensure accuracy of reported costs. (2) It is the intent of the Legislature that the department develop and implement limited scope audits of key cost centers or categories to assure that the rate paid in the years between each full scope audit required in paragraph (1) accurately reflects actual costs. (3) For purposes of updating facility specific rates, the department shall adjust or reclassify costs reported consistent with applicable requirements of the Medicaid state plan as required by Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations. (4) Overpayments to any facility shall be recovered in a manner consistent with applicable recovery procedures and requirements of state and federal laws and regulations. (k) (1) On an annual basis, the department shall use the results of audits performed pursuant to subdivisions (i) and (j), the results of any federal audits, and facility cost reports, including supplemental reports of actual costs incurred in specific cost centers or categories as required by the department, to determine any difference between reported costs used to calculate a facility’s rate and audited facility expenditures in the rate year. (2) If the department determines that there is a difference between reported costs and audited facility expenditures pursuant to paragraph (1), the department shall adjust a facility’s reimbursement prospectively over the intervening years between audits by an amount that reflects the difference, consistent with the methodology specified in this article. (l) For nursing facilities that obtain an audit appeal decision that results in revision of the facility’s allowable costs, the facility shall be entitled to seek a retroactive adjustment in its facility specific reimbursement rate. (m) Except as provided in Section 14126.022, compliance by each facility with state laws and regulations on staffing levels shall be documented annually either through facility cost reports, including supplemental reports, or through the annual licensing inspection process specified in Section 1422 of the Health and Safety Code. (Amended by Stats. 2022, Ch. 46, Sec. 8. (AB 186) Effective June 30, 2022. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.024. (a) For managed care rating periods that begin between January 1, 2023, and December 31, 2025, inclusive, the department, in consultation with representatives from the long-term care industry, organized labor, consumer advocates, and Medi-Cal managed care plans, shall establish and implement the Workforce and Quality Incentive Program under which a network provider furnishing skilled nursing facility services to a Medi-Cal managed care enrollee may earn performance-based directed payments from the Medi-Cal managed care plan they contract with in accordance with this section. (b) Subject to appropriation by the Legislature in the annual Budget Act, the department shall do all of the following: (1) Set the amount of performance-based directed payments to target an aggregate amount of two hundred eighty million dollars ($280,000,000) for the 2023 calendar year. (2) For the 2024 through 2025 calendar years, the department shall set the amount of the performance-based directed payments to target the previous calendar year’s target plus the annual increase specified by clause (ii) of subparagraph (A) of paragraphs (18), (19), and (20) of subdivision (c) of Section 14126.033. (3) No sooner than December 31, 2023, the department shall make a one-time increase to the performance-based directed payment target amount by the amounts described in subdivision (f) of Section 14126.032. This one-time increase shall not be factored into the amount calculated for a subsequent calendar year pursuant to paragraph (2). (c) The department, in consultation with stakeholders listed in subdivision (a), shall establish the methodology or methodologies, parameters, and eligibility criteria for the directed payments pursuant to this section. This shall include, but is not limited to, the milestones and metrics that network providers of skilled nursing facility services must meet in order to receive a directed payment from a Medi-Cal managed care plan pursuant to this section, with at least two of these milestones and metrics tied to workforce measures. Subject to subdivision (j), the department may implement the directed payment described in this section using one or more of the models authorized at Section 438.6(c)(1)(i)-(iii), inclusive, of Title 42 of the Code of Federal Regulations. (d) A freestanding pediatric subacute care facility, as defined in Section 51215.8 of Title 22 of the California Code of Regulations, shall be exempt from the directed payments described in this section. (e) Notwithstanding any other law, special program services for the mentally disordered that are entitled to receive the supplemental payment under Section 51511.1 of Title 22 of the California Code of Regulations shall be exempt from the directed payments described in this section. (f) Directed payments made pursuant to this section shall be in addition to any other payments made by the a Medi-Cal managed care plan to applicable network providers of skilled nursing facility services and shall not supplant amounts that would otherwise be payable by a Medi-Cal managed care plan to a provider of skilled nursing facility services, including those payments made in accordance with paragraph (2) of subdivision (b) of Section 14184.201. (g) For managed care rating periods during which this section is implemented, capitation rates paid by the department to a Medi-Cal managed care plan shall be actuarially sound and shall account for the directed payments described in this section. (h) The department may require Medi-Cal managed care plans and network providers of skilled nursing facility services to submit information the department deems necessary to implement this section, at the times and in the form and manner specified by the department. (i) Payments pursuant to this section shall be made in accordance with the requirements for directed payment arrangements described in Section 438.6(c) of Title 42 of the Code of Federal Regulations and any associated federal guidance. (j) In implementing this section, the department may contract, as necessary, with California’s Medicare Quality Improvement Organization, or other entities deemed qualified by the department, not associated with a skilled nursing facility, to assist with development, collection, analysis, and reporting of the performance data pursuant to this section. The department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis for purposes of implementing this subdivision. Contracts entered into or amended pursuant to this subdivision shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and State Administrative Manual, and the State Contracting Manual, and shall be exempt from the review or approval of any division of the State Department of General Services. (k) This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized. (l) For purposes of this section, the following definitions apply: (1) “Medi-Cal managed care plan” has the same meaning as set forth in subdivision (j) of Section 14184.101. (2) “Network provider” has the same meaning as set forth in Section 438.2 of Title 42 of the Code of Federal Regulations. (3) “Skilled nursing facility” has the same meaning as set forth in subdivision (c) of Section 1250 of the Health and Safety Code, excluding a nursing facility that is a distinct part of a facility that is licensed as a general acute care hospital as described in subdivision (a) of Section 1250 of the Health and Safety Code. (m) (1) This section shall become inoperative on January 1, 2026. The department may conduct all necessary closeout activities applicable to any managed care rating period before January 1, 2026. (2) This section shall be repealed on January 1, 2027, or on the date that the director certifies to the Secretary of State that all necessary closeout activities have been completed pursuant to paragraph (1), whichever is later. (Amended by Stats. 2025, Ch. 21, Sec. 99. (AB 116) Effective June 30, 2025. Inoperative January 1, 2026, by its own provisions. Conditionally repealed on or after January 1, 2027, by its own provisions.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.025. (a) The department shall seek approval of an amendment to the Medicaid state plan specifically outlining the reimbursement methodology developed pursuant to this article not later than February 1, 2005. (b) The amendment to the Medicaid state plan pursuant to subdivision (a), and any regulations, provider bulletins, or other similar instructions, shall be prepared in consultation with representatives of the long-term care industry, organized labor, seniors, and consumers. (Added by Stats. 2004, Ch. 875, Sec. 5. Effective September 29, 2004. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.026. (a) Notwithstanding any other law, and in addition to any other remedial action available to the department, if a skilled nursing facility fails to meet or exceed one or more of the measures developed by the department, including, but not limited to, those developed pursuant to subdivision (b) of Section 14126.024, the department may assess sanctions as described in this section. (b) (1) For each measure a skilled nursing facility fails to meet or exceed in a single rating period, the department may assess a sanction of five dollars ($5) for each Medi-Cal bed day within the rating period. (2) For each measure a skilled nursing facility fails to meet or exceed, the department shall not assess an aggregate sanction that exceed one hundred fifty thousand dollars ($150,000) in a single rating period. (c) The director may identify findings of noncompliance through any means, including, but not limited to, findings in audits, investigations, compliance reviews, quality improvement monitoring, routine monitoring, facility site surveys, encounter and provider data submissions, grievances and appeals, reviews of utilization data, fair hearing decisions, complaints from beneficiaries and other stakeholders, whistleblowers, and self-disclosures. (d) Notwithstanding any other law, the amount of the assessed sanction, as calculated pursuant to subdivision (b), for a skilled nursing facility may be deducted by the department from any Medi-Cal payments to that facility until the sanction is paid in full. If the department deducts the sanction from the Medi-Cal payments to the facility, the department shall provide prior written notice to the facility, and, in taking into account the financial condition of the facility, may apply that deduction over a period of time. (e) Notwithstanding any other law, if there is a merger, acquisition, or change of ownership involving a skilled nursing facility that has an outstanding sanction pursuant to this section, the successor skilled nursing facility shall be responsible for paying to the department the full amount of the outstanding sanction attributable to the facility for which it was assessed, upon the effective date of that transaction. (f) The department may waive all or a portion of the sanction assessed under this section if a facility petitions for a waiver and the department determines, in its sole discretion, that the petitioning facility meets both of the following: (1) The facility has demonstrated to the department’s satisfaction that sufficient corrective action has been taken to remediate the underlying deficiency. (2) The facility has demonstrated to the department’s satisfaction that imposing the full amount of the sanction under this section has a high likelihood of creating an undue financial hardship for that facility or creates a significant difficulty in providing services to Medi-Cal beneficiaries. (g) Any sanction collected by the department pursuant to this section shall be deposited into the General Fund, and, upon appropriation by the Legislature, shall be used to improve the quality of skilled nursing facility services under the Medi-Cal program, and to fund the department’s administrative costs associated with implementing the program described in this section. (h) (1) If a facility disputes any sanction made pursuant to this section, the facility shall, within 30 days of the facility’s receipt of the sanction assessment, submit a request for appeal to the department. The request shall include a detailed statement describing the reason for appeal and include all supporting documents the facility will present at the hearing. (2) Within 30 days of the department’s receipt of the facility’s request for appeal, the department shall submit to the facility its responsive arguments and all supporting documents that the department will present at the hearing. (3) The department shall hear a timely appeal and issue a decision as follows: (A) The hearing shall commence within 60 days from the date of receipt by the department of the facility’s timely request for appeal. (B) The department shall issue a decision within 120 days from the date of receipt by the department of the facility’s timely request for appeal. (C) The decision of the department’s hearing officer, when issued, shall be the final decision of the department. (4) The appeals process set forth in this subdivision shall be exempt from Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500), of Part 1 of Division 3 of Title 2 of the Government Code. The provisions of Sections 100171 and 131071 of the Health and Safety Code do not apply to appeals under this subdivision. (5) If a hearing decision issued pursuant to subparagraph (C) of paragraph (3) of this subdivision is in favor of the department, the skilled nursing facility shall pay the sanctions to the department within 30 days of the facility’s receipt of the decision. The sanctions collected shall be deposited in accordance with subdivision (g). (i) Any sanction issued pursuant to this section shall not prohibit any state or federal enforcement action, including, but not limited to, the State Department of Public Health’s investigation process or issuance of deficiencies or citations under Chapter 2.4 (commencing with Section 1417) of Division 2 of the Health and Safety Code. (j) In implementing this section, the department may contract, as necessary, with California’s Medicare Quality Improvement Organization, or other entities deemed qualified by the department, not associated with a skilled nursing facility, to assist with development, collection, analysis, and reporting of the performance data pursuant to this section. The department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis for purposes of implementing this subdivision. Contracts entered into or amended pursuant to this subdivision shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, the State Administrative Manual, and the State Contracting Manual, and shall be exempt from the review or approval of any division of the State Department of General Services. (k) This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized. (l) For purposes of this section, “skilled nursing facility” has the same meaning as set forth in subdivision (c) of Section 1250 of the Health and Safety Code, excluding a nursing facility that is a distinct part of a facility that is licensed as a general acute care hospital as described in subdivision (a) of Section 1250 of the Health and Safety Code. (Added by Stats. 2022, Ch. 46, Sec. 10. (AB 186) Effective June 30, 2022. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.027. Notwithstanding the rulemaking provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the director may implement this article, in whole or in part, by means of provider bulletins or other similar instructions, without taking regulatory action. The department shall make use of appropriate processes to ensure that affected stakeholders are informed of, and have access to, applicable guidance issued pursuant to this authority in a timely manner, and that this guidance remains publicly available while this article remains operative. (Amended by Stats. 2020, Ch. 13, Sec. 12. (AB 81) Effective June 29, 2020. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.028. (a) The Legislature finds and declares both of the following: (1) Section Q of the Minimum Data Set, Version 3.0, developed as part of the federal government’s nursing home quality initiative, uses a person-centered approach to ensure that all individuals have the opportunity to learn about home- and community-based services and have the opportunity to receive long-term care services in the least restrictive setting possible. (2) More community care services and support options and choices are now available to meet the care preferences and needs in the least restrictive setting possible. (b) Nursing facilities shall either meet the residents’ discharge planning and referral needs, or make referrals to a designated local contact agency (LCA) as determined by the State Department of Health Care Services. The LCA is responsible for contacting referred residents, and for providing information and counseling on available home- and community-based services. The LCA shall also either assist directly with transition services or make referrals to organizations that assist with transition services, as appropriate. (c) It is the intent of the Legislature to ensure that nursing home residents who, during the Minimum Data Set, Version 3.0, Section Q assessment, express interest in the possibility of receiving care and services in the community are appropriately referred by nursing facilities to the LCA, as appropriate. (d) The State Department of Health Care Services, in collaboration with the State Department of Public Health, shall, by April 1, 2013, provide the Legislature an analysis of the appropriate sections of the Minimum Data Set, Version 3.0, Section Q and nursing facilities referrals made to the LCA. This analysis shall also document the LCA’s response to referrals from nursing facilities and the outcomes of those referrals. (e) The State Department of Public Health and the State Department of Health Care Services shall regularly, and at least quarterly, meet with representatives from the long-term care industry, organized labor, consumers, and consumer advocates to provide updates and receive input on the planning for, implementation of, and progress of the skilled nursing facility quality improvement program. To facilitate decisionmaking, the State Department of Public Health and the State Department of Health Care Services shall promptly convene this workgroup and provide ongoing guidance to reach tangible outcomes for implementation by no later than January 2013. (Added by Stats. 2012, Ch. 631, Sec. 7. (AB 1489) Effective September 27, 2012. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.029. (a) For purposes of this section, the following definitions apply: (1) “Long-term health care facility” means a skilled nursing facility or nursing facility as those terms are defined in paragraph (1) of subdivision (c) and subdivision (k) of Section 1250 of the Health and Safety Code, respectively. (2) “Timely” means within three calendar days of a long-term health care facility being served a hearing decision. (b) A long-term health care facility shall timely comply with a hearing decision, as issued by the department’s Office of Administrative Hearings and Appeals pursuant to Section 1396r(e)(3) of Title 42 of the United States Code and Section 1599.1 of the Health and Safety Code, that finds that the long-term health care facility improperly transferred, discharged, or refused to readmit a resident. (c) (1) Notwithstanding any other law, and in addition to any other remedial action available to the department, if a long-term health care facility fails to timely comply with a hearing decision issued by the department’s Office of Administrative Hearings and Appeals, the department may assess penalties pursuant to this subdivision. (2) Commencing on the fourth calendar day after the date of service of the hearing decision, the department may assess a penalty of seven hundred fifty dollars ($750) for each calendar day the facility fails to comply with the hearing decision. (3) For each individual hearing decision, the department shall not assess aggregate penalties that exceed seventy-five thousand dollars ($75,000). (d) To demonstrate compliance with a hearing decision, a long-term health care facility shall file a certification of compliance with the department within three calendar days of the date the hearing decision is served on that facility, in a form and manner as established by the department. The certification shall specify the date of service of the hearing decision and the date on which the resident was readmitted or the facility otherwise complied with the hearing decision. The department shall make a certificate of compliance available on its internet website. (e) A long-term health care facility’s failure to timely comply with the hearing decision, including, but not limited to, a failure to file the certification of compliance within three calendar days of service of the hearing decision, as described in subdivision (d), shall subject that facility to the issuance of penalties as specified in subdivision (c), except as provided in subdivision (g). (f) (1) Notwithstanding any other law, the amount of the assessed penalties, as calculated pursuant to subdivision (c), for a long-term health care facility may be deducted by the department from any Medi-Cal payments to that facility until the penalties are paid in full. If the department deducts the penalties from the Medi-Cal payments to the facility, the department shall provide prior written notice to the facility, and, in taking into account the financial condition of the facility, may apply that deduction over a period of time. (2) Notwithstanding any other law, if there is a merger, acquisition, or change of ownership involving a long-term health care facility that has outstanding penalties pursuant to this section, the successor long-term health care facility shall be responsible for paying to the department the full amount of outstanding penalties attributable to the facility for which it was assessed, upon the effective date of that transaction. (g) The department may waive all or a portion of the penalties assessed under this section if a facility petitions for a waiver and the department determines, in its sole discretion, that the petitioning facility meets both of the following: (1) The facility complied with the hearing decision or otherwise demonstrated to the department’s satisfaction that sufficient corrective action has been taken to remediate the underlying improper conduct. (2) The facility demonstrated to the department’s satisfaction that imposing the full amount of penalties under this section has a high likelihood of creating an undue financial hardship for that facility or creates a significant difficulty in providing services to Medi-Cal beneficiaries. (h) Any penalties collected by the department pursuant to this section shall be deposited into the General Fund, and, upon appropriation by the Legislature, shall be used to improve quality of long-term care services under the Medi-Cal program, and to fund the department’s administrative costs associated with the hearings conducted pursuant to Section 1396r(e)(3) of Title 42 of the United States Code and Section 1599.1 of the Health and Safety Code for purposes of implementing this section. (i) Any penalty the department assesses on a long-term health care facility pursuant to this section is appealable only to the superior court of the county where the facility is located. (j) Any penalty issued pursuant to this section shall not prohibit any state or federal enforcement action, including, but not limited to, an enforcement action by the State Department of Public Health, for a violation of improper transfer or discharge or failure to readmit requirements. (k) Notwithstanding the rulemaking provisions of Chapter 3.5 (commencing Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of information notices, provider bulletins, or other similar instructions, without taking any further regulatory action. (l) The department shall seek any federal approvals it deems necessary to implement this section. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is not jeopardized. (m) In the event that the long-term health care facility seeks judicial review of the hearing decision and the hearing decision is reversed through such review, the department, after being provided a copy of the final judicial order by the facility, shall refund to the facility any penalties paid by the facility associated with the reversed hearing decision. (n) (1) A hearing decision for a hearing described in subdivision (b) shall be made by a hearing officer trained to consider and apply the procedural and substantive requirements of all applicable federal and state laws and regulations governing the transfer and discharge process. (2) A hearing described in subdivision (b) shall afford the resident and facility due process, including, but not limited to, allowing the direct and cross-examination of witnesses under oath, allowing the presentation of documents as exhibits, and making a recording of all sessions of the proceedings of sufficient quality to allow for the preparation of a written transcript. (Added by Stats. 2021, Ch. 143, Sec. 384. (AB 133) Effective July 27, 2021. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.031. (a) In implementing this article, the department may use the process outlined in subdivision (c) of Section 14126.02 to obtain professional consulting services for the purpose of finalizing design of the system, procurement of required technical hardware and software, establishing operational parameters, implementation, and transitional management pending assumption of operational management by state staff. (b) The ratesetting system described in subdivision (b) of Section 14126.02 shall be developed expeditiously in order to meet the implementation date required under Section 14126.02. (c) To ensure compliance with the timeframes set forth in this article, it is the intent of the Legislature that the department be authorized to hire up to three full-time equivalents to support implementation and continuous operation of the system. (Added by Stats. 2004, Ch. 875, Sec. 5. Effective September 29, 2004. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.032. (a) (1) Notwithstanding any other law, the department shall audit the costs and revenues of skilled nursing facilities that are associated with the COVID-19 Public Health Emergency, as determined by the department, including, but not limited to, equivalent amounts paid pursuant to paragraph (15) of subdivision (c) of Section 14126.033, to determine whether a skilled nursing facility has adequately used increased Medicaid payments associated with the COVID-19 Public Health Emergency made pursuant to subdivision (a) of Section 14124.12 for only allowable costs. For purposes of this section, allowable costs shall include patient care, additional labor costs attributable to the COVID-19 Public Health Emergency including, but not limited to, increased wages or benefits, shift incentive payments, staff retention bonuses, pay differential for workers employed by more than one facility, and overtime payments to nonmanagerial workers, and other appropriate costs that support the delivery of patient care, including, but not limited to, personal protective equipment, COVID-19 testing for any workers regardless of whether they are symptomatic or asymptomatic, infection control measures and equipment, and additional staff training. The department shall conduct financial audits of facility costs and revenues under this section based on the categories defined in Section 14126.023, including, but not limited to, direct labor costs, indirect labor costs, and administrative costs, and in accordance with any terms of federal approval obtained pursuant to subdivision (d). (2) For the costs and revenues associated with the time period of January 1, 2023, through December 31, 2023, the audit conducted pursuant to paragraph (1) shall include an audit of revenues received by a facility that were spent on additional labor costs attributable to the COVID-19 Public Health Emergency, including, but not limited to, increased wages or benefits, shift incentive payments, staff retention bonuses, pay differential for workers employed by more than one facility, and overtime payments to nonmanagerial workers. If a skilled nursing facility spent less than 85 percent of revenues associated with the COVID-19 Public Health Emergency on additional labor costs during this time period, the skilled nursing facility shall remit to the department the difference between that amount and 85 percent of revenues associated with the COVID-19 Public Health Emergency received by that facility. If the skilled nursing facility fails to remit this amount within 90 days, the department shall recoup that amount by withholding the remittance amount from any Medi-Cal payment made to the facility, or by any other means available by law. (3) Such increased wages or benefits, shift incentive payments, staff retention bonuses, pay differential for workers employed by more than one facility, overtime payments to nonmanagerial workers or other additional labor costs shall qualify for the purposes of paragraph (2) if they were either of the following: (A) Implemented prior to January 1, 2023, and continued during the 2023 calendar year. (B) Implemented on or after January 1, 2023. (b) For purposes of implementing this section, a skilled nursing facility that received increased Medicaid payments described in subdivision (a) shall disclose, at the time and in the form and manner specified by the department, any information requested by the department relating to costs and revenues associated with the COVID-19 Public Health Emergency. This may include, but is not limited to, documentation of any grant, loan, payment or other revenue received by the facility pursuant to any federal or state law related to the COVID-19 Public Health Emergency. (c) To the extent permissible under federal law, and in addition to any other remedial actions available to the department, the department shall recoup any amounts of the increased Medicaid payments audited pursuant to paragraph (1) of subdivision (a) that were not used to support the delivery of patient care against any applicable Medicaid payments made to the facility. (d) (1) The department shall seek any state plan amendments it deems necessary to audit the increased Medicaid payments described in subdivision (a) and recoup identified overpayments as described in this section. (2) This section shall be implemented only to the extent any necessary federal approvals are obtained, and federal financial participation is available and is not otherwise jeopardized. (e) For purposes of this section, “COVID-19 Public Health Emergency” means the federal Public Health Emergency declaration made pursuant to Section 247d of Title 42 of the United States Code on January 30, 2020, entitled “Determination that a Public Health Emergency Exists Nationwide as the Result of the 2019 Novel Coronavirus,” and any renewal of that declaration. (f) For any recoupment pursuant to paragraph (2) of subdivision (a) or subdivision (c) associated with the audit of costs and revenues for the time period of January 1, 2023, through December 31, 2023, the amounts associated with such recoupment shall be added on a one-time basis to the amount available for the Workforce and Quality Incentive Program described in Section 14126.024 in a subsequent rate year. (Amended by Stats. 2022, Ch. 46, Sec. 11. (AB 186) Effective June 30, 2022. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.033. (a) The Legislature finds and declares all of the following: (1) Costs within the Medi-Cal program continue to grow due to the rising cost of providing health care throughout the state and also due to increases in enrollment, which are more pronounced during difficult economic times. (2) In order to minimize the need for drastically cutting enrollment standards or benefits during times of economic crisis, it is crucial to find areas within the program where reimbursement levels are higher than required under the standard provided in Section 1902(a)(30)(A) of the federal Social Security Act and can be reduced in accordance with federal law. (3) The Medi-Cal program delivers its services and benefits to Medi-Cal beneficiaries through a wide variety of health care providers, under multiple delivery systems, including managed care, other contract models, or fee-for-service arrangements. (4) The setting of rates within the Medi-Cal program is complex and is subject to close supervision by the United States Department of Health and Human Services. (5) As the single state agency for the Medicaid program in California, the State Department of Health Care Services has unique expertise that can inform decisions that set or adjust reimbursement methodologies and levels consistent with the requirements of federal law. (b) Therefore, it is the intent of the Legislature for the department to analyze and identify where reimbursement levels can be reduced consistent with the standard provided in Section 1902(a)(30)(A) of the federal Social Security Act and federal and state law and policies, including any exemptions contained in the act that added this section, provided that the reductions in reimbursement shall not exceed 10 percent on an aggregate basis for all providers, services, and products. (c) Subject to an appropriation by the Legislature in the annual Budget Act, this article shall be funded as follows: (1) General Fund moneys appropriated for purposes of this article pursuant to Section 6 of the act adding this section shall be used for increasing rates, except as provided in Section 14126.031, for freestanding skilled nursing facilities, and shall be consistent with the approved methodology required to be submitted to the federal Centers for Medicare and Medicaid Services pursuant to Article 7.6 (commencing with Section 1324.20) of Chapter 2 of Division 2 of the Health and Safety Code. (2) (A) Notwithstanding Section 14126.023, for the 2005–06 rate year, the maximum annual increase in the weighted average Medi-Cal rate required for purposes of this article shall not exceed 8 percent of the weighted average Medi-Cal reimbursement rate for the 2004–05 rate year as adjusted for the change in the cost to the facility to comply with the nursing facility quality assurance fee for the 2005–06 rate year, as required under subdivision (b) of Section 1324.21 of the Health and Safety Code, plus the total projected Medi-Cal cost to the facility of complying with new state or federal mandates. (B) Beginning with the 2006–07 rate year, the maximum annual increase in the weighted average Medi-Cal reimbursement rate required for purposes of this article shall not exceed 5 percent of the weighted average Medi-Cal reimbursement rate for the prior fiscal year, as adjusted for the projected cost of complying with new state or federal mandates. (C) Beginning with the 2007–08 rate year and continuing through the 2008–09 rate year, the maximum annual increase in the weighted average Medi-Cal reimbursement rate required for purposes of this article shall not exceed 5.5 percent of the weighted average Medi-Cal reimbursement rate for the prior fiscal year, as adjusted for the projected cost of complying with new state or federal mandates. (D) For the 2009–10 rate year, the weighted average Medi-Cal reimbursement rate required for purposes of this article shall not be increased with respect to the weighted average Medi-Cal reimbursement rate for the 2008–09 rate year, as adjusted for the projected cost of complying with new state or federal mandates. (3) (A) For the 2010–11 rate year, if the increase in the federal medical assistance percentage (FMAP) pursuant to the federal American Recovery and Reinvestment Act of 2009 (ARRA) (Public Law 111-5) is extended for the entire 2010–11 rate year, the maximum annual increase in the weighted average Medi-Cal reimbursement rate for the purposes of this article shall not exceed 3.93 percent, or 3.14 percent, if the increase in the FMAP pursuant to ARRA is not extended for that period of time, plus the projected cost of complying with new state or federal mandates. If the increase in the FMAP pursuant to ARRA is extended at a different rate, or for a different time period, the rate adjustment for facilities shall be adjusted accordingly. (B) The weighted average Medi-Cal reimbursement rate increase specified in subparagraph (A) shall be adjusted by the department for the following reasons: (i) If the federal Centers for Medicare and Medicaid Services does not approve exemption changes to the facilities subject to the quality assurance fee. (ii) If the federal Centers for Medicare and Medicaid Services does not approve any proposed modification to the methodology for calculation of the quality assurance fee. (iii) To ensure that the state does not incur any additional General Fund expenses to pay for the 2010–11 weighted average Medi-Cal reimbursement rate increase. (C) If the maximum annual increase in the weighted average Medi-Cal rate is reduced pursuant to subparagraph (B), the department shall recalculate and publish the final maximum annual increase in the weighted average Medi-Cal reimbursement rate. (4) (A) Subject to the following provisions, for the 2011–12 rate year, the increase in the Medi-Cal reimbursement rate for the purpose of this article, for each skilled nursing facility as defined in subdivision (c) of Section 1250 of the Health and Safety Code, shall not exceed 2.4 percent of the rate on file that was applicable on May 31, 2011, plus the projected cost of complying with new state or federal mandates. The percentage increase shall be applied equally to each rate on file as of May 31, 2011. (B) The weighted average Medi-Cal reimbursement rate increase specified in subparagraph (A) shall be adjusted by the department for the following reasons: (i) If the federal Centers for Medicare and Medicaid Services does not approve exemption changes to the facilities subject to the quality assurance fee. (ii) If the federal Centers for Medicare and Medicaid Services does not approve any proposed modification to the methodology for calculation of the quality assurance fee. (iii) To ensure that the state does not incur any additional General Fund expenses to pay for the 2011–12 weighted average Medi-Cal reimbursement rate increase. (C) The department may recalculate and publish the weighted average Medi-Cal reimbursement rate increase for the 2011–12 rate year if the difference in the projected quality assurance fee collections from the 2011–12 rate year, compared to the projected quality assurance fee collections for the 2010–11 rate year, would result in any additional General Fund expense to pay for the 2011–12 rate year weighted average reimbursement rate increase. (5) To the extent that rates are projected to exceed the adjusted limits calculated pursuant to subparagraphs (A) to (D), inclusive, of paragraph (2) and, as applicable, paragraphs (3) and (4), the department shall adjust each skilled nursing facility’s projected rate for the applicable rate year by an equal percentage. (6) (A) (i) Notwithstanding any other law, and except as provided in subparagraph (B), payments resulting from the application of paragraphs (3) and (4), the provisions of paragraph (5), and all other applicable adjustments and limits as required by this section, shall be reduced by 10 percent for dates of service on and after June 1, 2011, through July 31, 2012. This one-time reduction shall be evenly distributed across all facilities to ensure long-term stability of nursing homes serving the Medi-Cal population. (ii) Notwithstanding any other law, the director may adjust the percentage reductions specified in clause (i), as long as the resulting reductions, in the aggregate, total no more than 10 percent. (iii) The adjustments authorized under this subparagraph shall be implemented only if the director determines that the payments resulting from the adjustments comply with paragraph (7). (B) Payments to facilities owned or operated by the state shall be exempt from the payment reduction required by this paragraph. (7) (A) Notwithstanding this section, the payment reductions and adjustments required by paragraph (6) shall be implemented only if the director determines that the payments that result from the application of paragraph (6) shall comply with applicable federal Medicaid requirements and that federal financial participation will be available. (B) In determining whether federal financial participation is available, the director shall determine whether the payments comply with applicable federal Medicaid requirements, including those set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code. (C) To the extent that the director determines that the payments do not comply with applicable federal Medicaid requirements or that federal financial participation is unavailable with respect to any payment that is reduced pursuant to this section, the director retains the discretion to not implement the particular payment reduction or adjustment and may adjust the payment as necessary to comply with federal Medicaid requirements. (8) For managed care health plans that contract with the department pursuant to this chapter and Chapter 8 (commencing with Section 14200), except for contracts with the Senior Care Action Network and AIDS Healthcare Foundation, and to the extent that these services are provided through any of those contracts, payments shall be reduced by the actuarial equivalent amount of the reduced provider reimbursements specified in paragraph (6) pursuant to contract amendments or change orders effective on July 1, 2011, or thereafter. (9) (A) For the 2012–13 rate year, all of the following shall apply: (i) The department shall determine the amounts of reduced payments for each skilled nursing facility, as defined in subdivision (c) of Section 1250 of the Health and Safety Code, resulting from the 10-percent reduction imposed pursuant to clause (i) of subparagraph (A) of paragraph (6) for the period beginning on June 1, 2011, through July 31, 2012. (ii) For claims adjudicated through October 1, 2012, each skilled nursing facility as defined in subdivision (c) of Section 1250 of the Health and Safety Code that is reimbursed under the Medi-Cal fee-for-service program, shall receive the total payments calculated by the department in clause (i), not later than December 31, 2012. (iii) For managed care plans that contract with the department pursuant to this chapter or Chapter 8 (commencing with Section 14200), except contracts with Senior Care Action Network and AIDS Healthcare Foundation, and to the extent that skilled nursing services are provided through any of those contracts, payments shall be adjusted by the actuarial equivalent amount of the reimbursements calculated in clause (i) pursuant to contract amendments or change orders effective on July 1, 2012, or thereafter. (B) Notwithstanding subparagraph (A), beginning on August 1, 2012, through July 31, 2013, the department shall pay the facility specific Medi-Cal reimbursement rate that was on file and applicable to the specific skilled nursing facility on August 1, 2011, prior to and excluding any rate reduction implemented pursuant to clause (i) of subparagraph (A) of paragraph (6) for the period beginning on June 1, 2011, to July 31, 2012, inclusive, and adjusted for the projected costs of complying with new state or federal mandates. These rates are deemed to be sufficient to meet operating expenses. (C) The weighted average Medi-Cal reimbursement rate increase specified in subparagraph (B) shall be adjusted by the department if the federal Centers for Medicare and Medicaid Services does not approve any proposed modification to the methodology for calculation of the skilled nursing quality assurance fee pursuant to Article 7.6 (commencing with Section 1324.20) of Chapter 2 of Division 2 of the Health and Safety Code. (D) Notwithstanding any other law, beginning on January 1, 2013, Article 7.6 (commencing with Section 1324.20) of Chapter 2 of Division 2 of the Health and Safety Code, which imposes a skilled nursing facility quality assurance fee, shall be unenforceable against any skilled nursing facility unless each skilled nursing facility is paid the rate provided for in subparagraphs (A) and (B). Any amount collected during the 2012–13 rate year by the department pursuant to Article 7.6 (commencing with Section 1324.20) of Chapter 2 of Division 2 of the Health and Safety Code shall be refunded to each facility not later than February 1, 2013. (E) The provisions of this paragraph shall also be included as part of a state plan amendment implementing the 2011–12 and 2012–13 Medi-Cal reimbursement rates authorized under this article. (10) (A) Subject to the following provisions, for the 2013–14 and 2014–15 rate years, the annual increase in the weighted average Medi-Cal reimbursement rate for the purpose of this article, for each skilled nursing facility as defined in subdivision (c) of Section 1250 of the Health and Safety Code, shall be 3 percent for each rate year, respectively, plus the projected cost of complying with new state or federal mandates. (B) (i) For the 2013–14 rate year, if there is a rate increase in the weighted average Medi-Cal reimbursement rate, the department shall set aside 1 percent of the increase in the weighted average Medi-Cal reimbursement rate, from which the department shall transfer the nonfederal portion into the Skilled Nursing Facility Quality and Accountability Special Fund, to be used for the supplemental rate pool. (ii) For the 2014–15 rate year, if there is a rate increase in the weighted average Medi-Cal reimbursement rate, the department shall set aside at least one-third of the weighted average Medi-Cal reimbursement rate increase, up to a maximum of 1 percent, from which the department shall transfer the nonfederal portion of this amount into the Skilled Nursing Facility Quality and Accountability Special Fund. (C) The weighted average Medi-Cal reimbursement rate increase specified in subparagraph (A) shall be adjusted by the department for the following reasons: (i) If the federal Centers for Medicare and Medicaid Services does not approve exemption changes to the facilities subject to the quality assurance fee. (ii) If the federal Centers for Medicare and Medicaid Services does not approve any proposed modification to the methodology for calculation of the quality assurance fee. (11) The director shall seek any necessary federal approvals for the implementation of this section. This section shall not be implemented until federal approval is obtained. When federal approval is obtained, the payments resulting from the application of paragraph (6) shall be implemented retroactively to June 1, 2011, or on any other date or dates as may be applicable. (12) (A) (i) Beginning with the 2015–16 rate year, and through the conclusion of the rate period from August 1, 2020, to December 31, 2020, inclusive, the annual increase in the weighted average Medi-Cal reimbursement rate, required for the purposes of this article, shall be 3.62 percent, plus the projected cost of complying with new state or federal mandates. (ii) The reimbursement rates established for the rate period of August 1, 2020, to December 31, 2020, inclusive, shall be no less than the amounts that would have been established under the reimbursement methodology pursuant to this section for the 2019–20 rate year, subject to subparagraph (B). (B) The weighted average Medi-Cal reimbursement rate increase specified in subparagraph (A) may be adjusted by the department as it deems necessary to obtain any applicable federal approval and shall not exceed the applicable federal upper payment limit. (C) (i) Only to the extent any necessary federal approvals are obtained for this subparagraph, the department may condition a facility’s receipt of the annual increase in the weighted average Medi-Cal reimbursement rate pursuant to this paragraph for the rate period of August 1, 2020, to December 31, 2020, inclusive, upon that facility’s good faith efforts to comply with any requirements related to the COVID-19 Public Health Emergency described in All Facility Letters issued by the State Department of Public Health. The department shall consult with the State Department of Public Health in determining a facility’s compliance for purposes of this subparagraph. (ii) For purposes of this subparagraph, “COVID-19 Public Health Emergency” means the federal Public Health Emergency declaration made pursuant to Section 247d of Title 42 of the United States Code on January 30, 2020, entitled “Determination that a Public Health Emergency Exists Nationwide as the Result of the 2019 Novel Coronavirus,” and any renewal of that declaration. (13) (A) For the 2021 calendar year, the annual aggregate increase in the weighted average Medi-Cal reimbursement rate that is required for the purposes of this article shall be 3.5 percent plus the projected cost of complying with new state or federal mandates. (B) The aggregate, weighted average Medi-Cal reimbursement rate increase specified in subparagraph (A) may be adjusted by the department as it deems necessary to obtain any applicable federal approval, and shall not exceed the applicable federal upper payment limit. (C) (i) Only to the extent any necessary federal approvals are obtained for this subparagraph, the department may condition a facility’s receipt of the annual increase in the weighted average Medi-Cal reimbursement rate pursuant to this paragraph for the 2021 calendar year upon that facility’s good faith efforts to comply with any requirements related to the COVID-19 Public Health Emergency described in All Facility Letters issued by the State Department of Public Health. The department shall consult with the State Department of Public Health in determining a facility’s compliance for purposes of this subparagraph. (ii) For purposes of this subparagraph, “COVID-19 Public Health Emergency” shall mean the federal Public Health Emergency declaration made pursuant to Section 247d of Title 42 of the United States Code on January 30, 2020, entitled “Determination that a Public Health Emergency Exists Nationwide as the Result of the 2019 Novel Coronavirus,” and any renewal of that declaration. (14) (A) For the 2022 calendar year, the annual aggregate increase in the weighted average Medi-Cal reimbursement rate that is required for the purposes of this article shall be 2.4 percent plus the projected cost of complying with new state or federal mandates. (B) The aggregate, weighted average Medi-Cal reimbursement rate increase specified in subparagraph (A) may be adjusted by the department as it deems necessary to obtain any applicable federal approval, and shall not exceed the applicable federal upper payment limit. (C) (i) Only to the extent any necessary federal approvals are obtained for this subparagraph, the department may condition a facility’s receipt of the annual increase in the weighted average Medi-Cal reimbursement rate pursuant to this paragraph for the 2022 calendar year upon that facility’s good faith efforts to comply with any requirements related to the COVID-19 Public Health Emergency described in All Facility Letters issued by the State Department of Public Health. The department shall consult with the State Department of Public Health in determining a facility’s compliance for purposes of this subparagraph. (ii) For purposes of this subparagraph, “COVID-19 Public Health Emergency” shall mean the federal Public Health Emergency declaration made pursuant to Section 247d of Title 42 of the United States Code on January 30, 2020, entitled “Determination that a Public Health Emergency Exists Nationwide as the Result of the 2019 Novel Coronavirus,” and any renewal of such declaration. (15) (A) For the 2022 and 2023 calendar years, inclusive, the reimbursement rate established for a skilled nursing facility pursuant to this section shall continue to be increased by the temporary Medicaid payments associated with the COVID-19 Public Health Emergency in effect for that facility on July 31, 2020, or an amount equivalent to those temporary increased Medicaid payments should the COVID-19 Public Health Emergency expire prior to December 31, 2023. (B) For the 2023 calendar year, 85 percent of the amount of temporary Medicaid payments associated with the COVID-19 Public Health Emergency, or amounts equivalent to those temporary increased Medicaid payments should the COVID-19 Public Health Emergency expire prior to December 31, 2023, received by a facility shall be spent on additional labor costs, including, but not limited to, increased wages or benefits, shift incentive payments, staff retention bonuses, pay differential for workers employed by more than one facility, and overtime payments to nonmanagerial workers. Such increased wages or benefits, shift incentive payments, staff retention bonuses, pay differential for workers employed by more than one facility, overtime payments to nonmanagerial workers or other additional labor costs shall qualify for this purpose if they were either of the following: (i) Implemented prior to January 1, 2023, and continued during the 2023 calendar year. (ii) Implemented on or after January 1, 2023. (C) If the COVID-19 Public Health Emergency is renewed past December 31, 2023, the temporary Medicaid payments for skilled nursing facilities associated with the COVID-19 Public Health Emergency, as authorized in the Medi-Cal State Plan, shall cease on December 31, 2023, subject to subdivision (h). (D) For purposes of this subparagraph, “COVID-19 Public Health Emergency” shall mean the federal Public Health Emergency declaration made pursuant to Section 247d of Title 42 of the United States Code on January 30, 2020, entitled “Determination that a Public Health Emergency Exists Nationwide as the Result of the 2019 Novel Coronavirus,” and any renewal of such declaration. (16) (A) For the 2023 calendar year, the maximum annual aggregate increase in the weighted average Medi-Cal reimbursement rate required for the purposes of this article shall be the following, plus the projected cost of complying with new state or federal mandates: (i) For the labor cost category as specified in paragraph (1) of subdivision (a) of Section 14126.023, the annual aggregate increase shall be 5 percent. (ii) For each of the indirect care nonlabor cost, administrative cost, capital cost, and direct passthrough categories as specified in paragraphs (2) to (5), inclusive, of subdivision (a) of Section 14126.023, the annual aggregate increase shall be 2 percent. (B) The aggregate, weighted average Medi-Cal reimbursement rate increases specified in subparagraph (A) may be adjusted by the department as it deems necessary to obtain any applicable federal approval, and shall not exceed the applicable federal upper payment limit. (17) (A) Beginning in the 2024 calendar year, the department shall establish a workforce adjustment, as further described in paragraphs (18), (19) and (20), for a skilled nursing facility that meets workforce standards, as determined by the department in consultation with representatives from the long-term care industry, organized labor, and consumer advocates. (B) The workforce standards may include, but need not be limited to, criteria such as maintaining a collective bargaining agreement or comparable, legally binding, written commitment with its direct and indirect care staff, payment of a prevailing wage for its direct and indirect care staff, payment of an average salary above minimum wage, participation in a statewide, multiemployer joint labor-management committee of skilled nursing facility employers and workers, or other factors, as determined by the department in consultation with the stakeholders listed above. The criteria may vary for facilities based on facility demographics or other factors such as facility size, location or other factor, as determined by the department in consultation with the stakeholders listed above. (18) (A) For the 2024 calendar year, the maximum annual increase in the Medi-Cal reimbursement rate required for the purposes of this article shall be the following, plus the projected cost of complying with new state or federal mandates: (i) For the labor cost category specified in paragraph (1) of subdivision (a) of Section 14126.023, the annual increase shall be determined as follows: (I) If the department determines the facility meets the criteria described in paragraph (17), the annual increase for the facility shall not have a percentage growth limit applied to the facility’s audited costs within the labor cost category trended to the 2024 calendar year. (II) If the facility does not meet the criteria described in paragraph (17), an annual increase of up to 5 percent shall be applied to the labor cost category rate included in the facility’s 2023 calendar year rate based on audited cost reports trended to the calendar 2024 year. (ii) For the 2024 calendar year, for each of the indirect care nonlabor cost, administrative cost, capital cost, and direct passthrough categories as specified in paragraphs (2) through (5), inclusive, of subdivision (a) of Section 14126.023, the annual aggregate increase in the weighted average Medi-Cal reimbursement rate for those categories shall be 1 percent. Additionally, for the 2024 calendar year, an amount equivalent to the annual aggregate increase of 1 percent calculated pursuant to this clause, as determined by the department, shall be used to supplement the funds available for payments made pursuant to subdivision (a) of Section 14126.024. (B) The Medi-Cal reimbursement rate specified in subparagraph (A) may be adjusted by the department as it deems necessary to obtain any applicable federal approval, and shall not exceed the applicable federal upper payment limit. (19) (A) For the 2025 calendar year, the Medi-Cal reimbursement rate required for the purposes of this article shall be the following, plus the projected cost of complying with new state or federal mandates: (i) The rate for the labor cost category as specified in paragraph (1) of subdivision (a) of Section 14126.023 shall be determined as follows: (I) If the department determines the facility meets the criteria described in paragraph (17), the facility’s rate for the labor cost category shall equal the facility’s audited costs for the labor cost category that would have been used for calculating the facility’s 2024 calendar year rate had the facility met the criteria described in paragraph (17) in the 2024 calendar year increased by up to 5 percent for the 2025 calendar year based on audited cost reports trended to the 2025 calendar year. (II) If the facility does not meet the criteria described in paragraph (17), the facility’s rate for the labor cost category shall equal the labor cost category rate included in the facility’s 2023 calendar year rate increased by up to 5 percent for each of the 2024 and 2025 calendar years based on audited cost reports trended to the applicable calendar year. (ii) For the 2025 calendar year, for each of the indirect care nonlabor cost, administrative cost, capital cost, and direct passthrough categories as specified in paragraphs (2) through (5), inclusive, of subdivision (a) of Section 14126.023, the facility’s rate for those categories shall equal the reimbursement included in the facility’s 2024 calendar year rate for those categories increased by an aggregate of 1 percent in the weighted average Medi-Cal reimbursement rate for those categories. Additionally, for the 2025 calendar year, an amount equivalent to the annual aggregate increase of 1 percent calculated pursuant to this clause, as determined by the department, shall be used to supplement the funds available for payments made pursuant to subdivision (a) of Section 14126.024. (B) The Medi-Cal reimbursement rate specified in subparagraph (A) may be adjusted by the department as it deems necessary to obtain any applicable federal approval, and shall not exceed the applicable federal upper payment limit. (20) (A) For the 2026 and 2027 calendar years, the Medi-Cal reimbursement rate required for the purposes of this article shall be the following, plus the projected cost of complying with new state or federal mandates: (i) The rate for labor cost category as specified in paragraph (1) of subdivision (a) of Section 14126.023 shall be determined as follows: (I) If the department determines the facility meets the criteria described in paragraph (17), the facility’s rate for the labor cost category shall equal the facility’s audited costs within the labor cost category that would have been used for calculating the facility’s 2024 calendar year rate had the facility met the criteria in the 2024 calendar year increased by up to 5 percent for each of the 2025, 2026, and 2027 calendar years based on audited cost reports trended to the applicable calendar year. (II) If the facility does not meet the criteria described in paragraph (17), the facility’s rate for the labor cost category shall equal the labor cost category rate included in the facility’s 2023 calendar year rate increased by up to 5 percent for each of the 2024, 2025, 2026, and 2027 calendar years based on audited cost reports trended to the applicable calendar year. (ii) For the 2026 and 2027 calendar years, for each of the indirect care nonlabor cost, administrative cost, capital cost, and direct passthrough categories as specified in paragraphs (2) through (5), inclusive, of subdivision (a) of Section 14126.023, the facility’s rate for those categories shall equal the reimbursement included in the facility’s 2025 calendar year rate for those categories increased by an aggregate of 1 percent in the weighted average Medi-Cal reimbursement rate for those categories. (B) The Medi-Cal reimbursement rate specified in subparagraph (A) may be adjusted by the department as it deems necessary to obtain any applicable federal approval, and shall not exceed the applicable federal upper payment limit. (d) (1) The department may modify any methodology or other provision specified in this article to the extent it deems necessary to meet the requirements of federal law or regulations, to obtain or maintain federal approval, or to ensure federal financial participation is available or is not otherwise jeopardized, provided the modification does not violate the spirit, purposes, and intent of this article. (2) If the department determines that a modification is necessary pursuant to paragraph (1), the department shall consult with affected providers and stakeholders to the extent practicable. (3) In the event of a modification made pursuant to this subdivision, the department shall notify affected providers, the Joint Legislative Budget Committee, and the relevant policy and fiscal committees of the Legislature within 10 business days of the modification. (e) The rate methodology shall cease to be implemented after December 31, 2027. (f) (1) It is the intent of the Legislature that the implementation of this article result in individual access to appropriate long-term care services, quality resident care, decent wages and benefits for nursing home workers, a stable workforce, provider compliance with all applicable state and federal requirements, and administrative efficiency. (2) Not later than December 1, 2006, the California State Auditor’s Office shall conduct an accountability evaluation of the department’s progress toward implementing a facility-specific reimbursement system, including a review of data to ensure that the new system is appropriately reimbursing facilities within specified cost categories and a review of the fiscal impact of the new system on the General Fund. (3) Not later than January 1, 2007, to the extent information is available for the three years immediately preceding the implementation of this article, the department shall provide baseline information in a report to the Legislature on all of the following: (A) The number and percent of freestanding skilled nursing facilities that complied with minimum staffing requirements. (B) The staffing levels before the implementation of this article. (C) The staffing retention rates before the implementation of this article. (D) The numbers and percentage of freestanding skilled nursing facilities with findings of immediate jeopardy, substandard quality of care, or actual harm, as determined by the certification survey of each freestanding skilled nursing facility conducted before the implementation of this article. (E) The number of freestanding skilled nursing facilities that received state citations and the number and class of citations issued during calendar year 2004. (F) The average wage and benefits for employees before the implementation of this article. (4) Not later than January 1, 2009, the department shall provide a report to the Legislature that does both of the following: (A) Compares the information required in paragraph (2) to that same information two years after the implementation of this article. (B) Reports on the extent to which residents who had expressed a preference to return to the community, as provided in Section 1418.81 of the Health and Safety Code, were able to return to the community. (5) The department may contract for the reports required under this subdivision. (g) (1) Beginning with the 2021 calendar year, and continuing each calendar year thereafter, a skilled nursing facility shall demonstrate its compliance with the following Medi-Cal funded requirements upon request by, and in the form and manner specified by, the department: (A) Direct care service hours per patient day requirements pursuant to Section 1276.65 of the Health and Safety Code and as enforced pursuant to Section 14126.022. (B) Applicable minimum wage laws. (C) Wage passthrough requirements pursuant to Section 14110.6 of this code and Section 1338 of the Health and Safety Code. (2) If the department determines that a skilled nursing facility has not demonstrated satisfactory compliance pursuant to subparagraphs (B) and (C) of paragraph (1), in consultation with State Department of Public Health or other applicable state agencies and departments if necessary, the department shall assess a monthly penalty up to fifty thousand dollars ($50,000) for that skilled nursing facility, except as provided in paragraph (3), until the facility demonstrates its compliance to the department. The penalty amounts assessed pursuant to this subdivision in any one calendar year shall be limited to 4 percent of the total Medi-Cal revenue received by the skilled nursing facility in the previous calendar year. If the department determines a facility is out of compliance for multiple calendar years, additional penalty amounts may be assessed for each respective calendar year. (3) The department may waive a portion or all of the penalties assessed pursuant to this subdivision with respect to a petitioning skilled nursing facility in the event the department determines, in its sole discretion, that the facility has demonstrated that imposing the full penalty has a high likelihood of creating an undue financial hardship for the facility or creates a significant financial difficulty in providing services to Medi-Cal beneficiaries. (h) In implementing this article, the department shall seek any federal approvals it deems necessary. This article shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized. (Amended by Stats. 2026, Ch. 61, Sec. 3. (SB 165) Effective July 6, 2026. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.034. (a) (1) The department shall convene a workgroup of interested stakeholders to make recommendations to the department to ensure compliance with the intent of this article, as provided in subdivision (a) of Section 14126.02. (2) (A) Interested stakeholders shall include consumers or their representatives, or both, including current or former skilled nursing facility residents, and family members of current or former skilled nursing facility residents, or both, seniors or their representatives, or both, skilled nursing facility representatives, labor representatives, and people with disabilities and disability rights advocates. (B) A stakeholder workgroup of 18 members shall be convened representing interested stakeholders from the groups listed in subparagraph (A), with six members selected from each of the following areas of interest: (i) Consumers. (ii) Skilled nursing facility labor. (iii) Skilled nursing facilities. (C) Interested stakeholders within each of the areas of interest in subparagraph (B) shall nominate and select six members within their area of interest to serve on the stakeholder workgroup to represent their interests. (D) The stakeholder workgroup shall also include representatives from the department, the Office of the State Long-Term Care Ombudsman, the State Department of Public Health, the Office of Statewide Health Planning and Development, with members appointed by their respective directors, or their designee, and may also include legislative staff, academics, and other state department representatives, including, but not limited to, representatives from the California Department of Aging and the State Department of Developmental Services. (b) (1) Each stakeholder workgroup meeting shall be chaired by a facilitator from an organization independent of the department and any of the stakeholder groups, to the extent that foundation funding is made available for this purpose. If no funds are made available for this purpose, the department shall facilitate the stakeholder workgroup meetings. (2) The consumers, skilled nursing facility labor, and skilled nursing facility stakeholder workgroup members shall each select one representative who will meet with the department and the facilitator to develop meeting agendas after having solicited input from each representative’s respective stakeholder group. (3) To the extent that foundation funding is made available, stakeholder workgroup members shall receive reimbursement for any actual, necessary, and reasonable expenses incurred in connection with their duties as members of the workgroup. (c) The department shall assign staff as needed to assist the stakeholder workgroup in carrying out its responsibilities. (d) In developing recommendations, the stakeholder workgroup shall consider the structure of, and potential changes to, the facility-specific ratesetting system, developed pursuant to Section 14126.023, that may improve the quality of resident care. The stakeholder workgroup members may take into consideration the following factors, or any other factors deemed relevant to ensure the quality of resident care: (1) Skilled nursing facility staffing levels, including, but not limited to, compliance with existing staffing requirements. (2) Skilled nursing facility staff wages and benefits, including, but not limited to, geographic disparities in wages and benefits. (3) Skilled nursing facility staff turnover and retention. (4) Deficiency reports issued as a result of both surveys and complaint investigations, to the extent that they may be disclosed as public records, and the enforcement actions taken under federal certification and state licensing laws and regulations. (5) Skilled nursing facility compliance with assessments required to ascertain residents’ preference for, and ability to return to, the community as required by Section 1418.81 of the Health and Safety Code, including necessary followthrough to assure care necessary for a resident to transition out of skilled nursing facility care and into the community. (6) The extent to which this article encourages compliance with the United States Supreme Court decision in Olmstead v. L.C. ex rel. Zimring (1999) 527 U.S. 581, including using the ratesetting system to increase Olmstead compliance. (7) Health care efficiency. (8) Health care safety. (9) The extent to which a pay-for-performance program may contribute to improving the quality of resident care and appropriate performance measures for a pay-for-performance program. (10) Preventable emergency room visits and rehospitalizations. (11) Resident and family satisfaction with care and resident’s quality of life, including improvements on ways to measure satisfaction. (12) Recommendations for methods to evaluate the effectiveness of the facility-specific ratesetting system, defined in Section 14126.023, in meeting the intent of this article, pursuant to Section 14126.02. (13) Additional quality measures, including, but not limited to, adequate nutrition and ready availability of durable medical equipment. (e) The department shall convene the stakeholder workgroup no later than one month following the effective date of this section. The stakeholder workgroup shall meet a minimum of six times through December 31, 2008. Subcommittees may be convened and meet as necessary. (f) In addition to recommendations provided during stakeholder workgroup meetings, individual members of the stakeholder workgroup and any other interested stakeholders may provide to the department any additional written recommendations on the items considered in the stakeholder workgroup meetings. (g) The department shall provide technical assistance to the stakeholder workgroup to evaluate the feasibility of its recommendations so that the stakeholder workgroup will have the benefit of the department’s analysis when discussing and reviewing proposed recommendations. (h) The department shall review and analyze all recommendations from the stakeholder workgroup, individual workgroup members, and any other interested stakeholders, and, no later than March 1, 2009, the department shall deliver to the Legislature, both of the following: (1) The complete recommendations of the stakeholder workgroup, individual workgroup members, and any other interested stakeholders. (2) The department’s analysis of the feasibility to implement the proposed recommendations. (i) (1) The stakeholder workgroup may continue to meet to carry out its responsibilities pursuant to subdivision (d) for an extension period of up to one year. During this extension period, the stakeholder workgroup shall meet at least quarterly as agreed by the department and those members selected pursuant to paragraph (2) of subdivision (a). (2) During the extension period the stakeholder workgroup’s activities may include assisting the department or Legislature, or both, to enact improvements to the ratesetting system. (j) The department shall seek partnership with one or more independent, nonprofit groups or foundations, academic institutions, or governmental entities providing grants for health-related activities, to support stakeholder workgroup efforts. (k) The department shall seek necessary legislative changes to implement the stakeholder workgroup’s recommendations that the department determines are feasible to implement as part of the reauthorization of this section. (l) The department may meet the intent of this article, as stated in subdivision (a) of Section 14126.02, by using the stakeholder workgroup’s recommendations in order to design an evaluation of the effectiveness of the facility-specific ratesetting system established pursuant to Section 14126.023. (m) Implementation and administration of this section is not dependent on the availability of foundation funding. (Amended by Stats. 2009, Ch. 140, Sec. 208. (AB 1164) Effective January 1, 2010. Conditionally inoperative as provided in subd. (a) of Section 14126.035. Inoperative after December 31, 2027, pursuant to Section 14126.036.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.035. (a) This article shall remain operative only as long as Article 7.6 (commencing with Section 1324.20) of Chapter 2 of Division 2 of the Health and Safety Code, which imposes a skilled nursing facility quality assurance fee continues as approved by the federal Centers for Medicare and Medicaid Services pursuant to Section 1324.27 of the Health and Safety Code. (b) In the event of a final judicial determination made by any state or federal court that is not appealed, or by a court of appellate jurisdiction that is not further appealed, in any action by any party or a final determination by the administrator of the Centers for Medicare and Medicaid Services, that federal financial participation is not available with respect to any payment made under the methodology implemented pursuant to this article because the methodology is invalid, unlawful, or is contrary to any provision of federal law or regulations, or of state law, this section shall become inoperative. (Added by Stats. 2004, Ch. 875, Sec. 5. Effective September 29, 2004. Inoperative after December 31, 2027, pursuant to Section 14126.036. Note: Inoperative clause in subd. (a) affects Article 3.8, commencing with Section 14126.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.8. Medi-Cal Long-Term Care Reimbursement Act [14126 - 14126.036] ( Article 3.8 repealed and added by Stats. 2004, Ch. 875, Sec. 5. ) ## 14126.036. (a) This article shall become inoperative after December 31, 2027, except that the department shall be authorized to conduct all necessary closeout activities after this date and to continue implementing this article for any rate period before December 31, 2027. (b) This section shall be repealed on January 1, 2029, or on the date that the director certifies to the Secretary of State that all necessary closeout activities have been completed pursuant to subdivision (a), whichever is later. (Amended by Stats. 2026, Ch. 61, Sec. 4. (SB 165) Effective July 6, 2026. Conditionally repealed on or after January 1, 2029, as prescribed by its own provisions.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.91. Medi-Cal Emergency Medical Transportation Reimbursement Act [14129 - 14129.7] ( Article 3.91 added by Stats. 2017, Ch. 773, Sec. 2. ) ## 14129. For purposes of this article, the following definitions apply: (a) “Annual quality assurance fee rate” means the quality assurance fee assessed on each emergency medical transport during each applicable state fiscal year. (b) “Aggregate fee schedule amount” means the product of the fee-for-service add-on increase described in Section 14129.3 and the Medi-Cal emergency medical transports, including both fee-for-service transports paid by the department and managed care transports paid by Medi-Cal managed care health plans, utilizing the billing codes for emergency medical transport for the state fiscal year. (c) “Available fee amount” shall be calculated as the sum of the following: (1) The amount deposited in the Medi-Cal Emergency Medical Transport Fund established under Section 14129.2 during the applicable state fiscal year, less the amounts described in subparagraphs (A) and (B) of paragraph (2) of subdivision (f) of Section 14129.2. (2) Any federal financial participation obtained as a result of the deposit of the amount described in paragraph (1) in the Medi-Cal Emergency Medical Transport Fund, created pursuant to Section 14129.2, for the applicable state fiscal year. (d) “Department” means the State Department of Health Care Services. (e) “Director” means the Director of Health Care Services. (f) “Effective state medical assistance percentage” means a ratio of the aggregate expenditures from state-only sources for the Medi-Cal program divided by the aggregate expenditures from state and federal sources for the Medi-Cal program for a state fiscal year. (g) “Emergency medical transport” means the act of transporting an individual from any point of origin to the nearest medical facility capable of meeting the emergency medical needs of the patient by an emergency medical transport provider by means of an ambulance licensed, operated, and equipped in accordance with applicable state or local statutes, ordinances, or regulations that are billed with billing codes A0429 BLS Emergency, A0427 ALS Emergency, A0434 Specialty Care Transport, A0225 Neonatal Emergency Transport, and A0433 ALS2, and any equivalent, predecessor, or successor billing codes as may be determined by the director. “Emergency medical transport” excludes transportation of beneficiaries by passenger car, taxicabs, litter vans, wheelchair vans, other forms of public or private conveyances, and transportation by an air ambulance provider. An “emergency medical transport” does not occur when, following evaluation of a patient, a transport is not provided. (h) “Gross receipts” means gross payments received as patient care revenue for emergency medical transports, determined on a cash basis of accounting. “Gross receipts” includes all payments received as patient care revenue for emergency medical transports, including payments for billing codes A0429 BLS Emergency, A0427 ALS Emergency, and A0433 ALS2, and any equivalent, predecessor, or successor billing codes as may be determined by the director, and any other ancillary billing codes associated with emergency medical transport as may be determined by the director. “Gross receipts” excludes supplemental amounts received pursuant to Sections 14105.94 or 14105.945. (i) “Emergency medical transport provider” means any provider of emergency medical transports, except that during any Medi-Cal managed care rating period for which Section 14105.945 is implemented “emergency medical transport provider” shall exclude “eligible providers” as defined in paragraph (1) of subdivision (a) of Section 14105.945 for purposes of this article. (j) “Emergency medical transport provider subject to the fee” means all emergency medical transport providers who bill and receive patient care revenue from the provision of emergency medical transports, except emergency medical transport providers that are exempt pursuant to subdivision (c) of Section 14129.6. (k) “Medi-Cal managed care health plan” means a “managed health care plan” as that term is defined in subdivision (ab) of Section 14169.51. (Amended by Stats. 2019, Ch. 544, Sec. 3. (AB 1705) Effective January 1, 2020. Conditionally inoperative as prescribed in Section 14129.7. Repealed conditionally as provided in Section 14129.7.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.91. Medi-Cal Emergency Medical Transportation Reimbursement Act [14129 - 14129.7] ( Article 3.91 added by Stats. 2017, Ch. 773, Sec. 2. ) ## 14129.1. (a) (1) The department shall establish the manner and format for emergency medical transport providers to report the data required pursuant to this section. (2) The department may establish an Internet Web site for the submission of reports required by this section. (3) The department may require a certification by each emergency medical transport provider under penalty of perjury of the truth of the reports required under this section. Upon written notice to an emergency medical transport provider, the department may impose a penalty of one hundred dollars ($100) per day against an emergency medical transport provider for every day that an emergency medical transport provider fails to make a report required by this section within five days of the date upon which the report was due. Any funds resulting from a penalty imposed pursuant to this paragraph shall be deposited in the Medi-Cal Emergency Medical Transport Fund created pursuant to subdivision (f) of Section 14129.2. (b) Each emergency medical transport provider shall report to the department data on the number of actual emergency medical transports by payer type, including, without limitation, Medi-Cal fee-for-service emergency medical transports and Medi-Cal managed care emergency medical transports per quarter, as follows: (1) For each quarter beginning on July 1, 2015, through the quarter beginning on July 1, 2017, inclusive, the data shall be submitted on or before October 15, 2017. (2) For the quarter beginning on October 1, 2017, and continuing each quarter thereafter, the data shall be submitted on or before the 45th day after the last day of the applicable quarter. (c) Each emergency medical transport provider shall report to the department data on the gross receipts received from the provision of emergency medical transports per state fiscal year, as follows: (1) For the state fiscal years beginning on July 1, 2015, and July 1, 2016, the data shall be submitted on or before October 15, 2017. (2) For each state fiscal year beginning on July 1, 2017, and continuing each state fiscal year thereafter, the data shall be submitted on or before the 45th day after the last day of the applicable state fiscal year. (Added by Stats. 2017, Ch. 773, Sec. 2. (SB 523) Effective October 13, 2017. Conditionally inoperative as prescribed in Section 14129.7. Repealed conditionally as provided in Section 14129.7.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.91. Medi-Cal Emergency Medical Transportation Reimbursement Act [14129 - 14129.7] ( Article 3.91 added by Stats. 2017, Ch. 773, Sec. 2. ) ## 14129.2. (a) (1) Commencing with the state fiscal quarter beginning on July 1, 2018, and continuing each state fiscal quarter thereafter for which this article is implemented, there shall be imposed a quality assurance fee for each emergency medical transport provided by each emergency medical transport provider subject to the fee in accordance with this section. (2) The director shall ensure that the quality assurance fee per emergency medical transport imposed pursuant to this article is collected. (b) (1) On or before June 15, 2018, and continuing each June 15 thereafter for which this article is implemented, the director shall calculate the annual quality assurance fee rate applicable to the following state fiscal year based on the most recently collected data from emergency medical transport providers pursuant to Section 14129.1. The director may correct any identified material or significant errors in the data collected from emergency medical transport providers pursuant to Section 14129.1 for the purposes of calculating the annual quality assurance fee rate. The director’s determination whether to exercise the director’s discretion to correct any data pursuant to this paragraph shall not be subject to judicial review, except that an emergency medical transport provider may bring a writ of mandate under Section 1085 of the Code of Civil Procedure to rectify an abuse of discretion by the director in correcting that emergency medical transport provider’s data when that correction results in a greater fee amount for that provider pursuant to this section. (A) For the state fiscal year beginning on July 1, 2018, the annual quality assurance fee rate shall be calculated by multiplying the projected total annual gross receipts for all emergency medical transport providers subject to the fee by 5.1 percent, which resulting product shall be divided by the projected total annual emergency medical transports by all emergency medical transport providers subject to the fee for the state fiscal year. (B) For state fiscal years beginning July 1, 2019, and continuing each state fiscal year thereafter, the annual quality assurance fee rate shall be calculated by a ratio, the numerator of which shall be the sum of: (i) the product of the projected aggregate fee schedule amount and the effective state medical assistance percentage and (ii) the amount described in subparagraph (A) of paragraph (2) of subdivision (f) for the state fiscal year, and the denominator of which shall be 90 percent of the projected total annual emergency medical transports by all emergency medical transport providers subject to the fee for the state fiscal year. (2) On or before June 15, 2018, and continuing each June 15 thereafter for which this article is implemented, the director shall publish the annual quality assurance fee rate on its internet website. (3) In no case shall the fees calculated pursuant to this subdivision and collected pursuant to this article exceed the amounts allowable under federal law. If, on or before June 15 of each year, the director makes a determination that the fees collected pursuant to this subdivision exceed the amounts allowable under federal law, the director may reduce the add-on increase to the fee-for-service payment schedule described in Section 14129.3 only to the extent necessary to reflect the amount of fees allowable under federal law in an applicable state fiscal year. (4) If, during a state fiscal year for which this article is operative, the actual or projected available fee amount exceeds or is less than the actual or projected aggregate fee schedule amount by more than 1 percent, the director shall adjust the annual quality assurance fee rate so that the available fee amount for the state fiscal year will approximately equal the aggregate fee schedule amount for the state fiscal year. The available fee amount for a state fiscal year shall be considered to equal the aggregate fee schedule amount for the state fiscal year if the difference between the available fee amount for the state fiscal year and the aggregate fee schedule amount for the state fiscal year constitutes less than 1 percent of the aggregate fee schedule amount for the state fiscal year. (c) (1) Each emergency medical transport provider subject to the fee shall remit to the department an amount equal to the annual quality assurance fee rate for the 2018–19 state fiscal year multiplied by the number of transports reported or that should have been reported by the emergency medical transport provider pursuant to subdivision (b) of Section 14129.1 in the quarter beginning on April 1, 2018, based on a schedule established by the director. The schedule established by the director for the fee payment described in this paragraph shall require remittance of the fee payment according to the following guidelines: (A) The director shall require an emergency medical transport provider that rendered 35,000 or more Medi-Cal fee-for-service emergency medical transports during the 2016–17 state fiscal year to remit the fee payment described in this paragraph on or after July 1, 2018. (B) The director shall require an emergency medical transport provider that rendered fewer than 35,000 Medi-Cal fee-for-service emergency medical transports during the 2016–17 state fiscal year to remit 50 percent or less of the fee payment described in this paragraph on or after August 1, 2018. (C) The director shall require an emergency medical transport provider that rendered fewer than 35,000 Medi-Cal fee-for-service emergency medical transports during the 2016–17 state fiscal year to remit any remaining fee payment amount described in this paragraph on or after August 15, 2018. (2) Commencing with the state fiscal quarter beginning on October 1, 2018, and continuing each state fiscal quarter thereafter, on or before the first day of each state fiscal quarter, each emergency medical transport provider subject to the fee shall remit to the department an amount equal to the annual quality assurance fee rate for the applicable state fiscal year multiplied by the number of transports reported or that should have been reported by the emergency medical transport provider pursuant to subdivision (b) of Section 14129.1 in the immediately preceding quarter. (d) (1) Interest shall be assessed on quality assurance fees not paid on the date due at the greater of 10 percent per annum or the rate at which the department assesses interest on Medi-Cal program overpayments pursuant to subdivision (h) of Section 14171. Interest shall begin to accrue the day after the date the payment was due and shall be deposited in the Medi-Cal Emergency Medical Transport Fund established in subdivision (f). (2) In the event that any fee payment is more than 60 days overdue, the department may deduct the unpaid fee and interest owed from any Medi-Cal reimbursement payments owed to the emergency medical transport provider until the full amount of the fee, interest, and any penalties assessed under this article are recovered. Any deduction made pursuant to this subdivision shall be made only after the department gives the emergency medical transport provider written notification. Any deduction made pursuant to this subdivision may be deducted over a period of time that takes into account the financial condition of the emergency medical transport provider. (3) In the event that any fee payment is more than 60 days overdue, a penalty equal to the interest charge described in paragraph (1) shall be assessed and due for each month for which the payment is not received after 60 days. Any funds resulting from a penalty imposed pursuant to this paragraph shall be deposited into the Medi-Cal Emergency Medical Transport Fund created pursuant to subdivision (f). (4) The director may waive a portion or all of either the interest or penalties, or both, assessed under this article in the event the director determines, in the director’s sole discretion, that the emergency medical transport provider has demonstrated that imposition of the full amount of the quality assurance fee pursuant to the timelines applicable under this article has a high likelihood of creating an undue financial hardship for the provider. Waiver of some or all of the interest or penalties pursuant to this paragraph shall be conditioned on the emergency medical transport provider’s agreement to make fee payments on an alternative schedule developed by the department. (e) The department shall accept an emergency medical transport provider’s payment even if the payment is submitted in a rate year subsequent to the rate year in which the fee was assessed. (f) (1) The director shall deposit the quality assurance fees collected pursuant to this section in the Medi-Cal Emergency Medical Transport Fund, which is hereby created in the State Treasury and, notwithstanding Section 13340 of the Government Code, is continuously appropriated without regard to fiscal years to the department for the purposes specified in this article. Notwithstanding Section 16305.7 of the Government Code, the fund shall also include interest and dividends earned on moneys in the fund. (2) The moneys in the Medi-Cal Emergency Medical Transport Fund, including any interest and dividends earned on money in the fund, shall be available exclusively to enhance federal financial participation for ambulance services under the Medi-Cal program and to provide additional reimbursement to, and to support quality improvement efforts of, emergency medical transport providers, and to pay for the state’s administrative costs and to provide funding for health care coverage for Californians, in the following order of priority: (A) To pay for the department’s staffing and administrative costs directly attributable to implementing this article, not to exceed the following amounts: (i) For the 2018–19 state fiscal year, one million three thousand dollars ($1,003,000), exclusive of any federal matching funds. (ii) For the 2019–20 state fiscal year and each state fiscal year thereafter, three hundred seventy-four thousand dollars ($374,000), exclusive of any federal matching funds. (B) To pay for the health care coverage in each applicable state fiscal year in the amount of 10 percent of the annual quality assurance fee collection amount, exclusive of any federal matching funds. (C) To make increased payments to emergency medical transport providers pursuant to this article. (g) In the event of a merger, acquisition, or similar transaction involving an emergency medical transport provider that has outstanding quality assurance fee payment obligations pursuant to this article, including any interest and penalty amounts owed, the resultant or successor emergency medical transport provider shall be responsible for paying to the department the full amount of outstanding quality assurance fee payments, including any applicable interest and penalties, attributable to the emergency medical transport provider for which it was assessed, upon the effective date of the transaction. An entity considering a merger, acquisition, or similar transaction involving an emergency medical transport provider may submit a request pursuant to Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code to ascertain the outstanding quality assurance fee payment obligations of the emergency medical transport provider pursuant to this article as of the date of the department’s response to that request. (Amended by Stats. 2021, Ch. 615, Sec. 454. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615. Conditionally inoperative as prescribed in Section 14129.7. Repealed conditionally as provided in Section 14129.7.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.91. Medi-Cal Emergency Medical Transportation Reimbursement Act [14129 - 14129.7] ( Article 3.91 added by Stats. 2017, Ch. 773, Sec. 2. ) ## 14129.3. (a) Except as provided in subdivision (i) of Section 14105.945, commencing July 1, 2018, and for each state fiscal year thereafter for which this article is operative, reimbursement to emergency medical transport providers for emergency medical transports shall be increased by application of an add-on to the associated Medi-Cal fee-for-service payment schedule. The add-on increase to the fee-for-service payment schedule under this section shall be calculated on or before June 15, 2018, and shall remain the same for later state fiscal years for which this article is operative, to the extent the department determines federal financial participation is available and is not otherwise jeopardized. The add-on increase to the fee-for-service payment schedule under this section shall apply only to those billing codes identified in, or any equivalent, predecessor, or successor billing codes as may be determined by the director pursuant to, subdivision (g) of Section 14129. The department shall calculate the projections required by this subdivision based on the data submitted pursuant to Section 14129.1. The fee-for-service add-on shall be equal to the quotient of the available fee amount projected by the department on or before June 15, 2018, for the 2018–19 state fiscal year, divided by the total Medi-Cal emergency medical transports, including both fee-for-service transports paid by the department and managed care transports paid by Medi-Cal managed care health plans, utilizing these billing codes projected by the department on or before June 15, 2018, for the 2018–19 state fiscal year. The resulting fee-for-service payment schedule amounts after the application of this section shall be equal to the sum of the Medi-Cal fee-for-service payment schedule amount for the 2015–16 state fiscal year and the add-on increase. (b) (1) Each applicable Medi-Cal managed care health plan shall satisfy its obligation under Section 438.114(c) of Title 42 of the Code of Federal Regulations for emergency medical transports and shall provide payment to noncontract emergency medical transport providers consistent with Section 1396u-2(b)(2)(D) of Title 42 of the United States Code. Effective July 1, 2018, and for each state fiscal year thereafter for which this article is operative, the amounts a noncontract emergency medical transport provider could collect if the beneficiary received medical assistance other than through enrollment in a Medi-Cal managed care health plan pursuant to Section 1396u-2(b)(2)(D) of Title 42 of the United States Code shall be the resulting fee-for-service payment schedule amounts after the application of this section. (2) This subdivision shall not apply to an eligible provider, as defined in paragraph (1) of subdivision (a) of Section 14105.945, who provides noncontract emergency medical transports to an enrollee of a Medi-Cal managed care plan during any Medi-Cal managed care rating period that Section 14105.945 is implemented. (c) The increased payments required by this section shall be funded solely from the following: (1) The quality assurance fee set forth in Section 14129.2, along with any interest or other investment income earned on those funds. (2) Federal reimbursement and any other related federal funds. (d) The proceeds of the quality assurance fee set forth in Section 14129.2, the matching amount provided by the federal government, and any interest earned on those proceeds shall be used to supplement existing funding for emergency medical transports provided by emergency medical transport providers and not to supplant this funding. (e) Notwithstanding this article, the department may seek federal approval to implement any add-on increase to the fee-for-service payment schedule pursuant to this section for any state fiscal year or years, as applicable, on a time-limited basis for a fixed program period, as determined by the department. (f) Notwithstanding this article, the add-on increase to the fee-for-service payment schedule pursuant to this section shall only be required and payable for state fiscal years that a quality assurance fee payment obligation exists for emergency medical transport providers. (Amended by Stats. 2019, Ch. 544, Sec. 4. (AB 1705) Effective January 1, 2020. Conditionally inoperative as prescribed in Section 14129.7. Repealed conditionally as provided in Section 14129.7.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.91. Medi-Cal Emergency Medical Transportation Reimbursement Act [14129 - 14129.7] ( Article 3.91 added by Stats. 2017, Ch. 773, Sec. 2. ) ## 14129.4. If there is a delay in the implementation of this article for any reason, including a delay in any required approval of the quality assurance fee and reimbursement methodology specified by the federal Centers for Medicare and Medicaid Services, both of the following shall apply: (a) An emergency medical transport provider subject to the fee may be assessed the amount the provider would be required to pay to the department if the add-on increase to the fee-for-service payment schedule described in Section 14129.3 were already approved, but shall not be required to pay the fee until the add-on increase to the fee-for-service payment schedule described in Section 14129.3 is approved. The director shall establish a schedule for payment of retroactive fees pursuant to this subdivision in consultation with emergency medical transport providers to minimize the disruption to the cashflow of emergency medical transport providers. (b) The department may retroactively implement the add-on increase to the fee-for-service payment schedule pursuant to Section 14129.3 to the extent the department determines that federal financial participation is available and is not otherwise jeopardized. (Added by Stats. 2017, Ch. 773, Sec. 2. (SB 523) Effective October 13, 2017. Conditionally inoperative as prescribed in Section 14129.7. Repealed conditionally as provided in Section 14129.7.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.91. Medi-Cal Emergency Medical Transportation Reimbursement Act [14129 - 14129.7] ( Article 3.91 added by Stats. 2017, Ch. 773, Sec. 2. ) ## 14129.5. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this article, in whole or in part, by means of provider bulletins, plan letters, or other similar instructions, without taking regulatory action. The department shall provide notification to the fiscal and appropriate policy committees of the Legislature within 10 business days after the above-described action is taken. The department shall make use of appropriate processes to ensure that affected stakeholders are timely informed of, and have access to, applicable guidance issued pursuant to this authority, and that this guidance remains publicly available so long as this article remains operative. (Added by Stats. 2017, Ch. 773, Sec. 2. (SB 523) Effective October 13, 2017. Conditionally inoperative as prescribed in Section 14129.7. Repealed conditionally as provided in Section 14129.7.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.91. Medi-Cal Emergency Medical Transportation Reimbursement Act [14129 - 14129.7] ( Article 3.91 added by Stats. 2017, Ch. 773, Sec. 2. ) ## 14129.6. (a) (1) The department shall request any approval from the federal Centers for Medicare and Medicaid Services it deems necessary for the use of fees pursuant to this article and for the purpose of receiving associated federal matching funds. (2) In making that request, the department may seek, as it deems necessary, a request for waiver of the broad-based requirement, waiver of the uniformity requirement, or both, pursuant to paragraphs (1) and (2) of subdivision (e) of Section 433.68 of Title 42 of the Code of Federal Regulations, or a request for waiver of any other provisions of federal law or regulation necessary to implement this article. (3) This article shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized. (b) The director may modify or make adjustments to any methodology, fee amount, or other provision specified in this article to the extent necessary to meet the requirements of federal law or regulations or to obtain federal approval. If the director, after consulting with affected emergency medical transport providers, determines that a modification is needed, the director shall execute a declaration stating that this determination has been made and that the actual or projected available fee amount for a state fiscal year remains approximately equal to the actual or projected aggregate fee schedule amount for each applicable state fiscal year, as defined by paragraph (4) of subdivision (b) of Section 14129.2. The director shall retain the declaration and provide a copy, within five working days of the execution of the declaration, to the fiscal and appropriate policy committees of the Legislature. (c) The director may add categories of exempt emergency medical transport providers or apply a nonuniform fee per transport to emergency medical transport providers that are subject to the fee in order to meet requirements of federal law or regulations. The director may exempt categories of emergency medical transport providers from the fee if necessary to obtain federal approval. (d) If, before June 1 preceding the start of an applicable state fiscal year, the director finds that the implementation of this article is likely no longer a benefit to the General Fund for the applicable state fiscal year, the director may decide to not implement this article for that state fiscal year. The director shall notify the appropriate fiscal and policy committees of the Legislature, and emergency medical transport providers individually and via the department’s Internet Web site of its finding pursuant to this subdivision. (Added by Stats. 2017, Ch. 773, Sec. 2. (SB 523) Effective October 13, 2017. Conditionally inoperative as prescribed in Section 14129.7. Repealed conditionally as provided in Section 14129.7.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 3.91. Medi-Cal Emergency Medical Transportation Reimbursement Act [14129 - 14129.7] ( Article 3.91 added by Stats. 2017, Ch. 773, Sec. 2. ) ## 14129.7. (a) This article shall be implemented only if, as long as, and to the extent that, all of the following conditions are met: (1) The federal Centers for Medicare and Medicaid Services does not determine that the quality assurance fee revenues may not be used for the purposes set forth in this article. (2) The department obtains any necessary federal approvals for the collection of the quality assurance fee pursuant to this article and the add-on increase to the fee-for-service payment schedule described in subdivision (a) of Section 14129.3. (3) The state continues its maintenance of effort for the level of state funding not derived from the quality assurance fee of emergency medical transports reimbursement for the 2018–19 rate year, and for each applicable rate year thereafter, in an amount not less than the amount that the state would have paid for the same number of emergency medical transports under the rate methodology that was in effect on July 31, 2016. (4) Federal financial participation is available, and is not otherwise jeopardized. (b) This article shall cease to be operative on the first day of the state fiscal year beginning on or after the date one or more of the following conditions is satisfied: (1) The federal Centers for Medicare and Medicaid Services no longer allows the collection or use of the emergency medical transport provider assessment provided in this article. (2) The increase to the Medi-Cal payments described in Section 14129.3 no longer remains in effect. (3) The quality assurance fee assessed and collected pursuant to this article is no longer available for the purposes specified in this article. (4) The director determines that a change in federal law or federal Medicaid policy results or is likely to result in a reduction of associated federal financial participation for the Medi-Cal program such that the director determines the continued implementation of this article is no longer a benefit to the General Fund. (5) A final judicial determination is made by the California Supreme Court or any California Court of Appeal that the revenues collected pursuant to this article that are deposited in the Medi-Cal Emergency Medical Transport Fund are either of the following: (A) “General Fund proceeds of taxes appropriated pursuant to Article XIII B,” as used in subdivision (b) of Section 8 of Article XVI of the California Constitution. (B) “Allocated local proceeds of taxes,” as used in subdivision (b) of Section 8 of Article XVI of the California Constitution. (6) A final judicial determination made by any state or federal court that is not appealed, or by a court of appellate jurisdiction that is not further appealed, in any action by any party, or a final determination by the administrator of the federal Centers for Medicare and Medicaid Services that is not appealed, that federal financial participation is not available with respect to any payment made under the methodology implemented pursuant to this article. (7) The state does not continue its maintenance of effort for the level of state funding of emergency medical transports reimbursement for the 2018–19 state fiscal year, or for any subsequent state fiscal year, in an amount not less than the amount that the state would have paid for the same number of emergency medical transports under the rate methodology in effect on July 31, 2016. (c) In the event one or more of the conditions listed in subdivision (b) is satisfied, the director shall notify, in writing and as soon as practicable, the Secretary of State, the Secretary of the Senate, the Chief Clerk of the Assembly, the Legislative Counsel, and the fiscal and appropriate policy committees of the Legislature of the condition and the approximate date or dates that it occurred. The director shall post the notice on the department’s Internet Web site. (d) (1) Notwithstanding any other law, in the event this article becomes inoperative pursuant to subdivision (b), the department shall be authorized to conduct all appropriate close-out activities and implement applicable provisions of this article for prior state fiscal years during which this article was operative including, but not limited to, the collection of outstanding quality assurance fees pursuant to Section 14129.2 and payments associated with any add-on increase to the Medi-Cal fee-for-service payment schedule pursuant to Section 14129.3. In implementing these close-out activities, the department shall ensure that the actual or projected available fee amount for each applicable state fiscal year remains approximately equal to the aggregate fee schedule amount for the state fiscal year, as defined by paragraph (4) of subdivision (b) of Section 14129.2. During this close-out period, the full amount of the quality assurance fee assessed and collected remains available only for the purposes specified in this article. (2) Upon a determination by the department that all appropriate close-out and implementation activities pursuant to paragraph (1) have been completed, the director shall notify, in writing, the Secretary of State, the Secretary of the Senate, the Chief Clerk of the Assembly, the Legislative Counsel, and the fiscal and appropriate policy committees of the Legislature of that determination. This article shall be repealed as of the effective date of the notification issued by the director pursuant to this paragraph. (Added by Stats. 2017, Ch. 773, Sec. 2. (SB 523) Effective October 13, 2017. Repealed conditionally by its own provisions. Note: Repeal affects Article 3.91, commencing with Section 14129.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 4. The Medi-Cal Benefits Program [14131 - 14138] ( Heading of Article 4 renumbered from Article 4.2 by Stats. 1977, Ch. 1252. ) ## 14131. The Medi-Cal Benefits Program comprises a department-administered uniform schedule of health care benefits. Notwithstanding any other provision of this chapter, “health care services” shall be limited to the benefits set forth in this article and in Section 14021. (Amended by Stats. 1975, Ch. 1005.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 4. The Medi-Cal Benefits Program [14131 - 14138] ( Heading of Article 4 renumbered from Article 4.2 by Stats. 1977, Ch. 1252. ) ## 14131.05. (a) Notwithstanding any other provision of this chapter or Chapter 8 (commencing with Section 14200), optional hearing aid benefits are subject to per beneficiary benefit cap amounts under the Medi-Cal program. (b) For the purposes of this section, “benefit cap amount” means the maximum amount of Medi-Cal coverage for optional hearing aid benefits as specified in subdivision (c), for each beneficiary, for each fiscal year. (c) (1) If the voters approve the addition of Chapter 7.5 (commencing with Section 14199.100) to this part at the November 5, 2024, statewide general election, hearing aid benefits are subject to a benefit cap amount of one thousand five hundred ten dollars ($1,510). (2) Notwithstanding paragraph (1), if the voters do not approve the addition of Chapter 7.5 (commencing with Section 14199.100) to this part at the November 5, 2024, statewide general election, hearing aid benefits are subject to a benefit cap amount of no less than one thousand five hundred ten dollars ($1,510). Under that circumstance, the benefit cap amount shall be set by the department and may be adjusted annually, any revisions to the benefit cap shall be subject to the provisions of Sections 14124.162 and 14124.163. (d) Pregnancy-related benefits and benefits for the treatment of other conditions that might complicate the pregnancy are not subject to the benefit cap amount in subdivision (c). (e) The benefit cap amount in subdivision (c) does not apply to the following: (1) Beneficiaries under the Early and Periodic Screening, Diagnosis, and Treatment Program. (2) Beneficiaries receiving long-term care in a nursing facility that is both of the following: (A) A skilled nursing facility or intermediate care facility as defined in subdivisions (c), (d), (e), (g), and (h), respectively, of Section 1250 of the Health and Safety Code, and facilities providing continuous skilled nursing care to developmentally disabled individuals pursuant to the program established by Section 14132.20. (B) A licensed nursing facility pursuant to subdivision (k) of Section 1250 of the Health and Safety Code. (f) For managed care health plans that contract with the department pursuant to this chapter or Chapter 8 (commencing with Section 14200), except for contracts with the Senior Care Action Network and AIDS Healthcare Foundation, payments for optional hearing aid benefits shall be reduced by the actuarial equivalent amount of the benefit reductions resulting from the implementation of the benefit cap amount specified in this section pursuant to contract amendments or change orders effective on July 1, 2011, or any date thereafter. (g) This section shall be implemented only to the extent permitted by federal law. (h) Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), the department may implement the provisions of this section by means of all-county letters, provider bulletins, or similar instructions, without taking further regulatory action. (i) This section shall be implemented on the first day of the first calendar month following 210 days after the effective date of this section, or on the first day of the first calendar month following 60 days after the date the department secures all necessary federal approvals to implement this section, whichever is later. If the implementation date occurs after July 1, 2011, then the benefit cap described in subdivision (c) for the first year of implementation shall be applied from the implementation date through June 30 of the state fiscal year in which implementation commences. Thereafter, the benefit cap shall apply on a state fiscal year basis. (Amended by Stats. 2024, Ch. 40, Sec. 64. (SB 159) Effective June 29, 2024.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 4. The Medi-Cal Benefits Program [14131 - 14138] ( Heading of Article 4 renumbered from Article 4.2 by Stats. 1977, Ch. 1252. ) ## 14131.10. (a) Notwithstanding this chapter, Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591), in order to implement changes in the level of funding for health care services, specific optional benefits are excluded from coverage under the Medi-Cal program. (b) (1) The following optional benefits are excluded from coverage under the Medi-Cal program: (A) Adult dental services, except as specified in paragraph (2). (i) This exclusion shall be in effect only through December 31, 2017, and adult dental services shall be covered under the Medi-Cal program as of January 1, 2018, or the effective date of any necessary federal approvals, whichever is later. (ii) The restoration of adult dental services pursuant to clause (i) shall be effective only to the extent any necessary federal approvals are obtained as required by subdivision (f). (B) Audiology services and speech therapy services. (C) Chiropractic services. (D) Optometric and optician services, including services provided by a fabricating optical laboratory, except as provided in subdivision (g). (E) Podiatric services. (F) Incontinence creams and washes. (2) (A) Medical and surgical services provided by a doctor of dental medicine or dental surgery, which, if provided by a physician, would be considered physician services, and which services may be provided by either a physician or a dentist in this state, are covered. (B) Emergency procedures are also covered in the categories of service specified in subparagraph (A). The director may adopt regulations for any of the services specified in subparagraph (A). (C) Effective May 1, 2014, or the effective date of any necessary federal approvals as required by subdivision (f), whichever is later, for persons 21 years of age or older, adult dental benefits, subject to utilization controls, are limited to all the following medically necessary services: (i) Examinations, radiographs/photographic images, prophylaxis, and fluoride treatments. (ii) Amalgam and composite restorations. (iii) Stainless steel, resin, and resin window crowns. (iv) Anterior root canal therapy. (v) Complete dentures, including immediate dentures. (vi) Complete denture adjustments, repairs, and relines. (D) Services specified in this paragraph shall be included as a covered medical benefit under the Medi-Cal program pursuant to Section 14132.89. (3) Pregnancy-related services and services for the treatment of other conditions that might complicate the pregnancy are not excluded from coverage under this section. (c) The optional benefit exclusions do not apply to either of the following: (1) Beneficiaries under the Early and Periodic Screening, Diagnostic, and Treatment Program. (2) Beneficiaries receiving long-term care in a nursing facility that is both: (A) A skilled nursing facility or intermediate care facility as defined in subdivisions (c) and (d) of Section 1250 of the Health and Safety Code. (B) Licensed pursuant to subdivision (k) of Section 1250 of the Health and Safety Code. (d) This section shall only be implemented to the extent permitted by federal law. (e) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement the provisions of this section by means of all-county letters, provider bulletins, or similar instructions, without taking further regulatory action. (f) This section shall be implemented only to the extent that federal financial participation is available and any necessary federal approvals have been obtained. (g) (1) Effective no sooner than January 1, 2020, or January 1 of the subsequent calendar year following the legislative action pursuant to paragraph (2), whichever is later, and subject to paragraph (2) and subdivision (f), optometric and optician services, including services provided by a fabricating optical laboratory, shall be covered benefits under the Medi-Cal program. (2) The restoration of optometric and optician services pursuant to this subdivision is contingent upon the Legislature including funding for these services in the state budget process. (h) Effective no sooner than January 1, 2020, all of the following optional benefits shall be covered benefits under the Medi-Cal program: (1) Audiology services and speech therapy services. (2) Podiatric services. (3) Incontinence creams and washes. (Amended by Stats. 2021, Ch. 143, Sec. 386. (AB 133) Effective July 27, 2021. Operative July 1, 2016, by Stats. 2016, Ch. 30, Sec. 36.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 4. The Medi-Cal Benefits Program [14131 - 14138] ( Heading of Article 4 renumbered from Article 4.2 by Stats. 1977, Ch. 1252. ) ## 14131.11. (a) Notwithstanding any other provision of this chapter or Chapter 8 (commencing with Section 14200), any increase in the amount charged to the Medi-Cal program for patient care or treatment that is directly related to an identifiable provider-preventable condition is excluded from reimbursement under Medi-Cal, in accordance with criteria set forth in federal and state law and the state’s Medi-Cal State Plan, except when the provider-preventable condition existed prior to the initiation of treatment for that patient by that provider. (b) The exclusion from reimbursement specified in subdivision (a) applies to the amounts charged for the care and treatment of individuals eligible under the Medi-Cal program, both in fee-for-service and managed care delivery systems, including individuals dually eligible for both the Medicare and Medi-Cal programs, individuals eligible under the California Children’s Services Program, and individuals eligible under the Genetically Handicapped Persons Program. (c) Exclusion from reimbursement under Medi-Cal pursuant to this section for increased amounts charged to Medi-Cal related to a provider-preventable condition shall be limited to the extent the identified provider-preventable condition would otherwise result in an increase in payment and the state can reasonably isolate for nonpayment the portion of the payment directly related to treatment for, and related to, the provider-preventable condition. (d) For health care-acquired conditions, the department may limit application of the exclusion from reimbursement as appropriate for specific populations, including, but not limited to, the pediatric population, after consultation with the federal government and stakeholders. (e) For health care-acquired conditions, the exclusion of reimbursement is initially limited to only those services provided by inpatient hospitals. For other provider-preventable conditions, the exclusion from reimbursement applies to health care services provided by any provider. This subdivision shall not limit the department from excluding from reimbursement those services provided in additional care settings as determined by the department. The department shall notify and consult with appropriate stakeholders prior to implementing, interpreting, or making specific this subdivision. (f) Medi-Cal providers, in both fee-for-service and managed care delivery systems, shall report the occurrence of any provider-preventable condition in any individual identified in subdivision (b) that did not exist prior to initiation of treatment by that provider. The report shall be made to the department as specified by the department, regardless of whether or not the provider seeks Medi-Cal reimbursement for services to treat the provider-preventable condition. (g) If a provider in either a fee-for-service or managed care delivery system receives a Medi-Cal payment or reimbursement for any increase in costs for patient care or treatment directly related to an identifiable provider-preventable condition that was not present when the individual initiated treatment with that provider, the provider shall reimburse those costs to the department or plan. (h) For purposes of this section, “provider-preventable condition,” “health care-acquired condition,” and “other provider-preventable condition” are defined as set forth in Section 447.26(b) of Title 42 of the Code of Federal Regulations. (i) A provider is prohibited from pursuing payment or reimbursement from a beneficiary for any increased amounts directly related to treatment for, and related to, the provider-preventable condition. (j) (1) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of plan letters, plan or provider bulletins, or similar instructions, without taking regulatory action, until the time regulations are adopted. Prior to issuing any letter, bulletin, or similar instruction authorized pursuant to this section, the department shall notify and consult with stakeholders, including advocates, providers, and beneficiaries. The department shall notify the appropriate policy and fiscal committees of the Legislature of its intent to issue instructions under this section at least five days in advance of the issuance. It is the intent of the Legislature that the department be provided temporary authority as necessary to implement program changes until completion of the regulatory process, which shall further address and take into account the input of stakeholders. (2) The department shall adopt emergency regulations pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code no later than January 1, 2017. The department may readopt any emergency regulation authorized by this section that is the same as or substantially equivalent to an emergency regulation previously adopted under this section. The initial adoption of emergency regulations and one readoption of emergency regulations implementing this section shall be deemed an emergency and necessary for the immediate preservation of the public peace, health, safety, or general welfare. (3) Initial emergency regulations and the one readoption of emergency regulations authorized by this section shall be exempt from review by the Office of Administrative Law. The initial emergency regulations and the one readoption of emergency regulations shall be submitted to the Office of Administrative Law for filing with the Secretary of State and each shall remain in effect for no more than 180 days, by which time final regulations may be adopted. (k) The department shall seek any necessary federal approvals for the implementation of this section. (l) This section shall be implemented only to the extent that federal financial participation is not jeopardized. (m) This section shall be implemented in accordance with the methodology set forth in the state plan in effect on July 1, 2012, and subsequently in accordance with any future methodologies approved by the federal Centers for Medicare and Medicaid Services. (Added by Stats. 2014, Ch. 31, Sec. 50. (SB 857) Effective June 20, 2014.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 4. The Medi-Cal Benefits Program [14131 - 14138] ( Heading of Article 4 renumbered from Article 4.2 by Stats. 1977, Ch. 1252. ) ## 14131.15. (a) In geographic areas in which Medi-Cal managed care plans contracting under this chapter or Chapter 8 (commencing with Section 14200) are operating with capacity to enroll additional qualifying Medi-Cal beneficiaries, the director may, in the interest of bringing managed care principles to bear on the quality, costs, or utilization levels of the Medi-Cal program, designate any benefit or service included in the Medi-Cal program, at state option under federal medicaid rules, as a covered Medi-Cal benefit only when provided by a Medi-Cal managed care plan to a Medi-Cal enrollee of the plan. (b) Where benefits and services have been designated by the director under subdivision (a), beneficiaries who are eligible to enroll in and reside in the service area of a managed care plan, and who desire coverage for such benefits and services, must enroll in a Medi-Cal managed care plan to receive them and shall, to the maximum extent permitted under federal law, remain enrolled in the plan. (c) When managed care capacity is reached in an area in which Medi-Cal benefits have been designated under this section, the director may provide for the delivery of designated benefits or services to beneficiaries by contract to the extent permitted under this chapter, on a fee-for-service basis or a combination of both. (d) Exercise of the director’s discretion under this section shall not preclude Medi-Cal managed care contractors from applying their established medical necessity criteria, utilization control standards and policies and utilization review procedures in delivering designated services as permitted and controlled by Medi-Cal contract and other state and federal regulatory standards. (e) Enactment of this section shall not impose any requirement on a Medi-Cal managed care plan to negotiate or enter into a contract or any other participation arrangement with any provider of a Medi-Cal benefit or service designated under subdivision (a). (f) The department shall seek all federal waivers necessary to allow for federal financial participation in expenditures under this section. (Added by Stats. 1992, Ch. 722, Sec. 120. Effective September 15, 1992.)

## Welfare and Institutions Code - WIC ## DIVISION 9. PUBLIC SOCIAL SERVICES [10000 - 18999.98] ( Division 9 added by Stats. 1965, Ch. 1784. ) ## PART 3. AID AND MEDICAL ASSISTANCE [11000 - 15771] ( Part 3 added by Stats. 1965, Ch. 1784. ) ## CHAPTER 7. Basic Health Care [14000 - 14199.97] ( Chapter 7 added by Stats. 1965, 2nd Ex. Sess., Ch. 4. ) ## ARTICLE 4. The Medi-Cal Benefits Program [14131 - 14138] ( Heading of Article 4 renumbered from Article 4.2 by Stats. 1977, Ch. 1252. ) ## 14132. The following is the schedule of benefits under this chapter: (a) Outpatient services are covered as follows: Physician, hospital or clinic outpatient, surgical center, respiratory care, optometric, chiropractic, psychology, podiatric, occupational therapy, physical therapy, speech therapy, audiology, acupuncture to the extent federal matching funds are provided for acupuncture, and services of persons rendering treatment by prayer or healing by spiritual means in the practice of any church or religious denomination insofar as these can be encompassed by federal participation under an approved plan, subject to utilization controls. (b) (1) Inpatient hospital services, including, but not limited to, physician and podiatric services, physical therapy, and occupational therapy, are covered subject to utilization controls. (2) For a Medi-Cal fee-for-service beneficiary, emergency services and care that are necessary for the treatment of an emergency medical condition and medical care directly related to the emergency medical condition. This paragraph does not change the obligation of Medi-Cal managed care plans to provide emergency services and care. For the purposes of this paragraph, “emergency services and care” and “emergency medical condition” have the same meanings as those terms are defined in Section 1317.1 of the Health and Safety Code. (c) Nursing facility services, subacute care services, and services provided by any category of intermediate care facility for the developmentally disabled, including podiatry, physician, nurse practitioner services, and prescribed drugs, as described in subdivision (d), are covered subject to utilization controls. Respiratory care, physical therapy, occupational therapy, speech therapy, and audiology services for patients in nursing facilities and any category of intermediate care facility for persons with developmental disabilities are covered subject to utilization controls. (d) (1) Purchase of prescribed drugs is covered subject to the Medi-Cal List of Contract Drugs and utilization controls. (2) Purchase of drugs used to treat erectile dysfunction or any off-label uses of those drugs are covered only to the extent that federal financial participation is available. (3) (A) To the extent required by federal law, the purchase of outpatient prescribed drugs, for which the prescription is executed by a prescriber in written, nonelectronic form on or after April 1, 2008, is covered only when executed on a tamper resistant prescription form. The implementation of this paragraph shall conform to the guidance issued by the federal Centers for Medicare and Medicaid Services, but shall not conflict with state statutes on the characteristics of tamper resistant prescriptions for controlled substances, including Section 11162.1 of the Health and Safety Code. The department shall provide providers and beneficiaries with as much flexibility in implementing these rules as allowed by the federal government. The department shall notify and consult with appropriate stakeholders in implementing, interpreting, or making specific this paragraph. (B) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may take the actions specified in subparagraph (A) by means of a provider bulletin or notice, policy letter, or other similar instructions without taking regulatory action. (4) (A) (i) For the purposes of this paragraph, nonlegend has the same meaning as defined in subdivision (a) of Section 14105.45. (ii) Nonlegend acetaminophen-containing products, including children’s acetaminophen-containing products, selected by the department are covered benefits. (iii) Nonlegend cough and cold products selected by the department are covered benefits. (B) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may take the actions specified in subparagraph (A) by means of a provider bulletin or notice, policy letter, or other similar instruction without taking regulatory action. (e) Outpatient dialysis services and home hemodialysis services, including physician services, medical supplies, drugs, and equipment required for dialysis, are covered, subject to utilization controls. (f) Anesthesiologist services when provided as part of an outpatient medical procedure, nurse anesthetist services when rendered in an inpatient or outpatient setting under conditions set forth by the director, outpatient laboratory services, and x-ray services are covered, subject to utilization controls. This subdivision does not require prior authorization for anesthesiologist services provided as part of an outpatient medical procedure or for portable x-ray services in a nursing facility or any category of intermediate care facility for the developmentally disabled. (g) Blood and blood derivatives are covered. (h) (1) Emergency and essential diagnostic and restorative dental services, except for orthodontic, fixed bridgework, and partial dentures that are not necessary for balance of a complete artificial denture, are covered, subject to utilization controls. The utilization controls shall allow emergency and essential diagnostic and restorative dental services and prostheses that are necessary to prevent a significant disability or to replace previously furnished prostheses that are lost or destroyed due to circumstances beyond the beneficiary’s control. Notwithstanding the foregoing, the director may by regulation provide for certain fixed artificial dentures necessary for obtaining employment or for medical conditions that preclude the use of removable dental prostheses, and for orthodontic services in cleft palate deformities administered by the department’s California Children’s Services program. (2) For persons 21 years of age or older, the services specified in paragraph (1) shall be provided subject to the following conditions: (A) Periodontal treatment is not a benefit. (B) Endodontic therapy is not a benefit except for vital pulpotomy. (C) Laboratory processed crowns are not a benefit. (D) Removable prosthetics shall be a benefit only for patients as a requirement for employment. (E) The director may, by regulation, provide for the provision of fixed artificial dentures that are necessary for medical conditions that preclude the use of removable dental prostheses. (F) Notwithstanding the conditions specified in subparagraphs (A) to (E), inclusive, the department may approve services for persons with special medical disorders subject to utilization review. (3) Paragraph (2) shall become inoperative on July 1, 1995. (i) Medical transportation is covered, subject to utilization controls. (j) Home health care services are covered, subject to utilization controls. (k) (1) Prosthetic and orthotic devices and eyeglasses are covered, subject to utilization controls. Utilization controls shall allow replacement of prosthetic and orthotic devices and eyeglasses necessary because of loss or destruction due to circumstances beyond the beneficiary’s control. Frame styles for eyeglasses replaced pursuant to this subdivision shall not change more than once every two years, unless the department so directs. (2) Orthopedic and conventional shoes are covered when provided by a prosthetic and orthotic supplier on the prescription of a physician and when at least one of the shoes will be attached to a prosthesis or brace, subject to utilization controls. Modification of stock conventional or orthopedic shoes when medically indicated is covered, subject to utilization controls. If there is a clearly established medical need that cannot be satisfied by the modification of stock conventional or orthopedic shoes, custom-made orthopedic shoes are covered, subject to utilization controls. (3) Therapeutic shoes and inserts are covered when provided to a beneficiary with a diagnosis of diabetes, subject to utilization controls, to the extent that federal financial participation is available. (l) Hearing aids are covered, subject to utilization controls. Utilization controls shall allow replacement of hearing aids necessary because of loss or destruction due to circumstances beyond the beneficiary’s control. (m) Durable medical equipment and medical supplies are covered, subject to utilization controls. The utilization controls shall allow the replacement of durable medical equipment and medical supplies when necessary because of loss or destruction due to circumstances beyond the beneficiary’s control. The utilization controls shall allow authorization of durable medical equipment needed to assist a disabled beneficiary in caring for a child for whom the disabled beneficiary is a parent, stepparent, foster parent, or legal guardian, subject to the availability of federal financial participation. The department shall adopt emergency regulations to define and establish criteria for assistive durable medical equipment in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (n) Family planning services are covered, subject to utilization controls. However, for Medi-Cal managed care plans, utilization controls shall be subject to Section 1367.25 of the Health and Safety Code. (o) Inpatient intensive rehabilitation hospital services, including respiratory rehabilitation services, in a general acute care hospital are covered, subject to utilization controls, when either of the following criteria are met: (1) A patient with a permanent disability or severe impairment requires an inpatient intensive rehabilitation hospital program as described in Section 14064 to develop function beyond the limited amount that would occur in the normal course of recovery. (2) A patient with a chronic or progressive disease requires an inpatient intensive rehabilitation hospital program as described in Section 14064 to maintain the patient’s present functional level as long as possible. (p) (1) Adult day health care is covered in accordance with Chapter 8.7 (commencing with Section 14520). (2) Commencing 30 days after the effective date of the act that added this paragraph, and notwithstanding the number of days previously approved through a treatment authorization request, adult day health care is covered for a maximum of three days per week. (3) As provided in accordance with paragraph (4), adult day health care is covered for a maximum of five days per week. (4) As of the date that the director makes the declaration described in subdivision (g) of Section 14525.1, paragraph (2) shall become inoperative and paragraph (3) shall become operative. (q) (1) Application of fluoride, or other appropriate fluoride treatment as defined by the department, and other prophylaxis treatment for children 17 years of age and under are covered. (2) All dental hygiene services provided by a registered dental hygienist, registered dental hygienist in extended functions, and registered dental hygienist in alternative practice licensed pursuant to Sections 1753, 1917, 1918, and 1922 of the Business and Professions Code may be covered as long as they are within the scope of Denti-Cal benefits and they are necessary services provided by a registered dental hygienist, registered dental hygienist in extended functions, or registered dental hygienist in alternative practice. (r) (1) Paramedic services performed by a city, county, or special district, or pursuant to a contract with a city, county, or special district, and pursuant to a program established under former Article 3 (commencing with Section 1480) of Chapter 2.5 of Division 2 of the Health and Safety Code by a paramedic certified pursuant to that article, and consisting of defibrillation and those services specified in subdivision (3) of former Section 1482 of the article. (2) A provider enrolled under this subdivision shall satisfy all applicable statutory and regulatory requirements for becoming a Medi-Cal provider. (3) This subdivision shall be implemented only to the extent funding is available under Section 14106.6. (s) (1) In-home medical care services are covered when medically appropriate and subject to utilization controls, for a beneficiary who would otherwise require care for an extended period of time in an acute care hospital at a cost higher than in-home medical care services. The director shall have the authority under this section to contract with organizations qualified to provide in-home medical care services to those persons. These services may be provided to a patient placed in a shared or congregate living arrangement, if a home setting is not medically appropriate or available to the beneficiary. (2) As used in this subdivision, “in-home medical care service” includes utility bills directly attributable to continuous, 24-hour operation of life-sustaining medical equipment, to the extent that federal financial participation is available. (3) As used in this subdivision, in-home medical care services include, but are not limited to: (A) Level-of-care and cost-of-care evaluations. (B) Expenses, directly attributable to home care activities, for materials. (C) Physician fees for home visits. (D) Expenses directly attributable to home care activities for shelter and modification to shelter. (E) Expenses directly attributable to additional costs of special diets, including tube feeding. (F) Medically related personal services. (G) Home nursing education. (H) Emergency maintenance repair. (I) Home health agency personnel benefits that permit coverage of care during periods when regular personnel are on vacation or using sick leave. (J) All services needed to maintain antiseptic conditions at stoma or shunt sites on the body. (K) Emergency and nonemergency medical transportation. (L) Medical supplies. (M) Medical equipment, including, but not limited to, scales, gurneys, and equipment racks suitable for paralyzed patients. (N) Utility use directly attributable to the requirements of home care activities that are in addition to normal utility use. (O) Special drugs and medications. (P) Home health agency supervision of visiting staff that is medically necessary, but not included in the home health agency rate. (Q) Therapy services. (R) Household appliances and household utensil costs directly attributable to home care activities. (S) Modification of medical equipment for home use. (T) Training and orientation for use of life-support systems, including, but not limited to, support of respiratory functions. (U) Respiratory care practitioner services as defined in Sections 3702 and 3703 of the Business and Professions Code, subject to prescription by a physician and surgeon. (4) A beneficiary receiving in-home medical care services is entitled to the full range of services within the Medi-Cal scope of benefits as defined by this section, subject to medical necessity and applicable utilization control. Services provided pursuant to this subdivision, which are not otherwise included in the Medi-Cal schedule of benefits, shall be available only to the extent that federal financial participation for these services is available in accordance with a home- and community-based services waiver. (t) Home- and community-based services approved by the United States Department of Health and Human Services are covered to the extent that federal financial participation is available for those services under the state plan or waivers granted in accordance with Section 1315 or 1396n of Title 42 of the United States Code. The director may seek waivers for any or all home- and community-based services approvable under Section 1315 or 1396n of Title 42 of the United States Code. Coverage for those services shall be limited by the terms, conditions, and duration of the federal waivers. (u) Comprehensive perinatal services, as provided through an agreement with a health care provider designated in Section 14134.5 and meeting the standards developed by the department pursuant to Section 14134.5, subject to utilization controls. The department shall seek any federal waivers necessary to implement the provisions of this subdivision. The provisions for which appropriate federal waivers cannot be obtained shall not be implemented. Provisions for which waivers are obtained or for which waivers are not required shall be implemented notwithstanding any inability to obtain federal waivers for the other provisions. No provision of this subdivision shall be implemented unless matching funds from Subchapter XIX (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code are available. (v) Early and periodic screening, diagnosis, and treatment for any individual under 21 years of age is covered, consistent with the requirements of Subchapter XIX (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code. (w) (1) Hospice services are covered, in accordance with Medicare requirements, and are subject to utilization controls. Coverage shall be available only to the extent that no additional net program costs are incurred. (2) This subdivision shall be implemented only to the extent that federal financial participation is available and not otherwise jeopardized, and any necessary federal approvals have been obtained. (3) Notwithstanding any other law, the department, without taking any further regulatory action, may implement, interpret, or make specific this subdivision by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions. (x) When a claim for treatment provided to a beneficiary includes both services that are authorized and reimbursable under this chapter and services that are not reimbursable under this chapter, that portion of the claim for the treatment and services authorized and reimbursable under this chapter shall be payable. (y) Home- and community-based services approved by the United States Department of Health and Human Services for a beneficiary with a diagnosis of Acquired Immune Deficiency Syndrome (AIDS) or AIDS-related complex, who requires intermediate care or a higher level of care. Services provided pursuant to a waiver obtained from the Secretary of the United States Department of Health and Human Services pursuant to this subdivision, and that are not otherwise included in the Medi-Cal schedule of benefits, shall be available only to the extent that federal financial participation for these services is available in accordance with the waiver, and subject to the terms, conditions, and duration of the waiver. These services shall be provided to a beneficiary in accordance with the client’s needs as identified in the plan of care, and subject to medical necessity and applicable utilization control. The director may, under this section, contract with organizations qualified to provide, directly or by subcontract, services provided for in this subdivision to an eligible beneficiary. Contracts or agreements entered into pursuant to this division shall not be subject to the Public Contract Code. (z) Respiratory care when provided in organized health care systems as defined in Section 3701 of the Business and Professions Code, and as an in-home medical service as outlined in subdivision (s). (aa) (1) There is hereby established in the department a program to provide comprehensive clinical family planning services to any person who has a family income at or below 200 percent of the federal poverty level, as revised annually, and who is eligible to receive these services pursuant to the waiver identified in paragraph (2). This program shall be known as the Family Planning, Access, Care, and Treatment (Family PACT) Program. (2) The department shall seek a waiver in accordance with Section 1315 of Title 42 of the United States Code, or a state plan amendment adopted in accordance with Section 1396a(a)(10)(A)(ii)(XXI) of Title 42 of the United States Code, which was added to Section 1396a of Title 42 of the United States Code by Section 2303(a)(2) of the federal Patient Protection and Affordable Care Act (PPACA) (Public Law 111-148), for a program to provide comprehensive clinical family planning services as described in paragraph (8). Under the waiver, the program shall be operated only in accordance with the waiver and the statutes and regulations in paragraph (4) and subject to the terms, conditions, and duration of the waiver. Under the state plan amendment, which shall replace the waiver and shall be known as the Family PACT successor state plan amendment, the program shall be operated only in accordance with this subdivision and the statutes and regulations in paragraph (4). The state shall use the standards and processes imposed by the state on January 1, 2007, including the application of an eligibility discount factor to the extent required by the federal Centers for Medicare and Medicaid Services, for purposes of determining eligibility as permitted under Section 1396a(a)(10)(A)(ii)(XXI) of Title 42 of the United States Code. To the extent that federal financial participation is available, the program shall continue to conduct education, outreach, enrollment, service delivery, and evaluation services as specified under the waiver. The services shall be provided under the program only if the waiver and, when applicable, the successor state plan amendment are approved by the federal Centers for Medicare and Medicaid Services and only to the extent that federal financial participation is available for the services. This section does not prohibit the department from seeking the Family PACT successor state plan amendment during the operation of the waiver. (3) Solely for the purposes of the waiver or Family PACT successor state plan amendment and notwithstanding any other law, the collection and use of an individual’s social security number shall be necessary only to the extent required by federal law. (4) Sections 14105.3 to 14105.39, inclusive, 14107.11, 24005, and 24013, and any regulations adopted under these statutes shall apply to the program provided for under this subdivision. No other law under the Medi-Cal program or the State-Only Family Planning Program shall apply to the program provided for under this subdivision. (5) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, without taking regulatory action, the provisions of the waiver after its approval by the federal Centers for Medicare and Medicaid Services and the provisions of this section by means of an all-county letter or similar instruction to providers. Thereafter, the department shall adopt regulations to implement this section and the approved waiver in accordance with the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Beginning six months after the effective date of the act adding this subdivision, the department shall provide a status report to the Legislature on a semiannual basis until regulations have been adopted. (6) If the Department of Finance determines that the program operated under the authority of the waiver described in paragraph (2) or the Family PACT successor state plan amendment is no longer cost effective, this subdivision shall become inoperative on the first day of the first month following the issuance of a 30-day notification of that determination in writing by the Department of Finance to the chairperson in each house that considers appropriations, the chairpersons of the committees, and the appropriate subcommittees in each house that considers the State Budget, and the Chairperson of the Joint Legislative Budget Committee. (7) If this subdivision ceases to be operative, all persons who have received or are eligible to receive comprehensive clinical family planning services pursuant to the waiver described in paragraph (2) shall receive family planning services under the Medi-Cal program pursuant to subdivision (n) if they are otherwise eligible for Medi-Cal with no spend down of excess income, or shall receive comprehensive clinical family planning services under the program established in Division 24 (commencing with Section 24000) either if they are eligible for Medi-Cal with a spend down of excess income or if they are otherwise eligible under Section 24003. (8) For purposes of this subdivision, “comprehensive clinical family planning services” means the process of establishing objectives for the number and spacing of children, and selecting the means by which those objectives may be achieved. These means include a broad range of acceptable and effective methods and services to limit or enhance fertility, including contraceptive methods, federal Food and Drug Administration-approved contraceptive drugs, devices, and supplies, natural family planning, abstinence methods, and basic, limited fertility management. Comprehensive clinical family planning services include, but are not limited to, preconception counseling, maternal and fetal health counseling, general reproductive health care, including diagnosis and treatment of infections and conditions, including cancer, that threaten reproductive capability, medical family planning treatment and procedures, including supplies and followup, and informational, counseling, and educational services. Comprehensive clinical family planning services shall not include abortion, pregnancy testing solely for the purposes of referral for abortion or services ancillary to abortions, or pregnancy care that is not incident to the diagnosis of pregnancy. Comprehensive clinical family planning services shall be subject to utilization control and include all of the following: (A) Family planning related services and male and female sterilization. Family planning services for men and women shall include emergency services and services for complications directly related to the contraceptive method, federal Food and Drug Administration-approved contraceptive drugs, devices, and supplies, and followup, consultation, and referral services, as indicated, which may require treatment authorization requests. (B) All United States Department of Agriculture, federal Food and Drug Administration-approved contraceptive drugs, devices, and supplies that are in keeping with current standards of practice and from which the individual may choose. (C) Culturally and linguistically appropriate health education and counseling services, including informed consent, that include all of the following: (i) Psychosocial and medical aspects of contraception. (ii) Sexuality. (iii) Fertility. (iv) Pregnancy. (v) Parenthood. (vi) Infertility. (vii) Reproductive health care. (viii) Preconception and nutrition counseling. (ix) Prevention and treatment of sexually transmitted infection. (x) Use of contraceptive methods, federal Food and Drug Administration-approved contraceptive drugs, devices, and supplies. (xi) Possible contraceptive consequences and followup. (xii) Interpersonal communication and negotiation of relationships to assist individuals and couples in effective contraceptive method use and planning families. (D) A comprehensive health history, updated at the next periodic visit (between 11 and 24 months after initial examination) that includes a complete obstetrical history, gynecological history, contraceptive history, personal medical history, health risk factors, and family health history, including genetic or hereditary conditions. (E) A complete physical examination on initial and subsequent periodic visits. (F) Services, drugs, devices, and supplies deemed by the federal Centers for Medicare and Medicaid Services to be appropriate for inclusion in the program. (G) (i) Home test kits for sexually transmitted diseases, including any laboratory costs of processing the kit, that are deemed medically necessary or appropriate and ordered directly by an enrolled Medi-Cal or Family PACT clinician or furnished through a standing order for patient use based on clinical guidelines and individual patient health needs. (ii) For purposes of this subparagraph, “home test kit” means a product used for a test recommended by the federal Centers for Disease Control and Prevention guidelines or the United States Preventive Services Task Force that has been CLIA-waived, FDA-cleared or -approved, or developed by a laboratory in accordance with established regulations and quality standards, to allow individuals to self-collect specimens for STDs, including HIV, remotely at a location outside of a clinical setting. (iii) Reimbursement under this subparagraph shall be contingent upon the addition of codes specific to home test kits in the Current Procedural Terminology or Healthcare Common Procedure Coding System to comply with Health Insurance Portability and Accountability Act requirements. The home test kit shall be sent by the enrolled Family PACT provider to a Medi-Cal-enrolled laboratory with fee based on Medicare Clinical Diagnostic Laboratory Tests Payment System Final Rule. (9) In order to maximize the availability of federal financial participation under this subdivision, the director shall have the discretion to implement the Family PACT successor state plan amendment retroactively to July 1, 2010. (ab) (1) Purchase of prescribed enteral nutrition products is covered, subject to the Medi-Cal list of enteral nutrition products and utilization controls. (2) Purchase of enteral nutrition products is limited to those products to be administered through a feeding tube, including, but not limited to, a gastric, nasogastric, or jejunostomy tube. A beneficiary under the Early and Periodic Screening, Diagnostic, and Treatment Program shall be exempt from this paragraph. (3) Notwithstanding paragraph (2), the department may deem an enteral nutrition product, not administered through a feeding tube, including, but not limited to, a gastric, nasogastric, or jejunostomy tube, a benefit for patients with diagnoses, including, but not limited to, malabsorption and inborn errors of metabolism, if the product has been shown to be neither investigational nor experimental when used as part of a therapeutic regimen to prevent serious disability or death. (4) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement the amendments to this subdivision made by the act that added this paragraph by means of all-county letters, provider bulletins, or similar instructions, without taking regulatory action. (5) The amendments made to this subdivision by the act that added this paragraph shall be implemented June 1, 2011, or on the first day of the first calendar month following 60 days after the date the department secures all necessary federal approvals to implement this section, whichever is later. (ac) Diabetic testing supplies are covered when provided by a pharmacy, subject to utilization controls. (ad) (1) Nonmedical transportation is covered, subject to utilization controls and permissible time and distance standards, for a beneficiary to obtain covered Medi-Cal services. (2) (A) (i) Nonmedical transportation includes, at a minimum, round trip transportation for a beneficiary to obtain covered Medi-Cal services by passenger car, taxicab, or any other form of public or private conveyance, and mileage reimbursement when conveyance is in a private vehicle arranged by the beneficiary and not through a transportation broker, bus passes, taxi vouchers, or train tickets. (ii) Nonmedical transportation does not include the transportation of a sick, injured, invalid, convalescent, infirm, or otherwise incapacitated beneficiary by ambulance, litter van, or wheelchair van licensed, operated, and equipped in accordance with state and local statutes, ordinances, or regulations. (B) Nonmedical transportation shall be provided for a beneficiary who can attest in a manner to be specified by the department that other currently available resources have been reasonably exhausted. For a beneficiary enrolled in a managed care plan, nonmedical transportation shall be provided by the beneficiary’s managed care plan. For a Medi-Cal fee-for-service beneficiary, the department shall provide nonmedical transportation when those services are not available to the beneficiary under Sections 14132.44 and 14132.47. (3) Nonmedical transportation shall be provided in a form and manner that is accessible, in terms of physical and geographic accessibility, for the beneficiary and consistent with applicable state and federal disability rights laws. (4) It is the intent of the Legislature in enacting this subdivision to affirm the requirement under Section 431.53 of Title 42 of the Code of Federal Regulations, in which the department is required to provide necessary transportation, including nonmedical transportation, for recipients to and from covered services. This subdivision shall not be interpreted to add a new benefit to the Medi-Cal program. (5) The department shall seek any federal approvals that may be required to implement this subdivision, including, but not limited to, approval of revisions to the existing state plan that the department determines are necessary to implement this subdivision. (6) This subdivision shall be implemented only to the extent that federal financial participation is available and not otherwise jeopardized and any necessary federal approvals have been obtained. (7) Prior to the effective date of any necessary federal approvals, nonmedical transportation was not a Medi-Cal managed care benefit with the exception of when provided as an Early and Periodic Screening, Diagnostic, and Treatment service. (8) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, without taking any further regulatory action, shall implement, interpret, or make specific this subdivision by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions until the time regulations are adopted. By July 1, 2018, the department shall adopt regulations in accordance with the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Commencing January 1, 2018, and notwithstanding Section 10231.5 of the Government Code, the department shall provide a status report to the Legislature on a semiannual basis, in compliance with Section 9795 of the Government Code, until regulations have been adopted. (9) This subdivision shall not be implemented until July 1, 2017. (ae) (1) No sooner than January 1, 2022, Rapid Whole Genome Sequencing, including individual sequencing, trio sequencing for a parent or parents and their baby, and ultra-rapid sequencing, is a covered benefit for any Medi-Cal beneficiary who is one year of age or younger and is receiving inpatient hospital services in an intensive care unit. (2) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, without taking any further regulatory action, shall implement, interpret, or make specific this subdivision by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions until the time regulations are adopted. (3) This subdivision shall be implemented only to the extent that any necessary federal approvals are obtained, and federal financial participation is available and not otherwise jeopardized. (af) (1) Home test kits for sexually transmitted diseases that are deemed medically necessary or appropriate and ordered directly by an enrolled Medi-Cal clinician or furnished through a standing order for patient use based on clinical guidelines and individual patient health needs. (2) For purposes of this subdivision, “home test kit” means a product used for a test recommended by the federal Centers for Disease Control and Prevention guidelines or the United States Preventive Services Task Force that has been CLIA-waived, FDA-cleared or -approved, or developed by a laboratory in accordance with established regulations and quality standards, to allow individuals to self-collect specimens for STDs, including HIV, remotely at a location outside of a clinical setting. (3) Reimbursement under this subparagraph shall be contingent upon the addition of codes specific to home test kits in the Current Procedural Terminology or Healthcare Common Procedure Coding System to comply with Health Insurance Portability and Accountability Act requirements. The home test kit shall be sent by the enrolled Medi-Cal provider to a Medi-Cal-enrolled laboratory with fee based on Medicare Clinical Diagnostic Laboratory Tests Payment System Final Rule. (4) This subdivision shall be implemented only to the extent that federal financial participation is available and not otherwise jeopardized, and any necessary federal approvals have been obtained. (5) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the State Department of Health Care Services may implement this subdivision by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions, without taking any further regulatory action. (ag) (1) Violence prevention services are covered, subject to medical necessity and utilization controls. (2) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, without taking any further regulatory action, may implement, interpret, or make specific this subdivision by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions until the time regulations are adopted. (3) This subdivision shall be implemented only to the extent that any necessary federal approvals are obtained, and federal financial participation is available and not otherwise jeopardized. (4) The department shall post on its internet website the date upon which violence prevention services may be provided and billed pursuant to this subdivision. (5) “Violence prevention services” means evidence-based, trauma-informed, and culturally responsive preventive services provided to reduce the incidence of violent injury or reinjury, trauma, and related harms and promote trauma recovery, stabilization, and improved health outcomes. (Amended by Stats. 2025, Ch. 21, Sec. 101. (AB 116) Effective June 30, 2025.)