BILL NUMBER: AB 2599AMENDED BILL TEXT AMENDED IN ASSEMBLY JUNE 1, 2010 INTRODUCED BY Assembly Members Bass and Hall ( Coauthor: Assembly Member Fuentes ) FEBRUARY 19, 2010 An act to add Article 5.15 (commencing with Section 14165.50) to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, relating to Medi-Cal, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 2599, as amended, Bass. Medi-Cal: South Los Angeles. Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income persons receive health care benefits. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions. Existing law authorizes the California Medical Assistance Commission to negotiate selective provider contracts with eligible hospitals to provide inpatient hospital services to Medi-Cal beneficiaries. Existing law requires the County of Los Angeles, for the 2007-08, 2008-09, and 2009-10 state fiscal years, to make intergovernmental transfers to fund the nonfederal share of increased Medi-Cal payments to those private hospitals that serve the South Los Angeles population formerly served by Los Angeles County Martin Luther King, Jr. - Harbor Hospital. This bill, in order to facilitate the financial viability of a new private nonprofit hospital that will serve the population of South Los Angeles that was formerly served by the Los Angeles County Martin Luther King Jr. - Harbor Hospital , wouldrequiresrequire the department and the California Medical Assistance Commission to take all steps necessary to ensure the availability of Medi-Cal funding, as specified, or implement mechanisms to provide equivalent funding under successor or modified Medi-Cal payment systems. This bill would declare that it is to take effect immediately as an urgency statute. Vote: 2/3. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) Until August 2007, the County of Los Angeles operated the Los Angeles County Martin Luther King, Jr.-Harbor Hospital, which provided inpatient and outpatient hospital services to the population of South Los Angeles. (b) During the 2007-08 Regular Session of the Legislature, the Legislature enacted Senate Bill 474, which, among other things, created the South Los Angeles Medical Services Prevention Fund. Senate Bill 474 provided for the South Los Angeles Medical Services Preservation Fund to be continuously appropriated for each of the 2007-08, 2008-09, and 2009-10 project years for the purpose of reimbursing the county for its specified costs of meeting the health care needs of the population formerly serviced by the Los Angeles County Martin Luther King, Jr.-Harbor Hospital. The Legislature anticipated that funds from the Medi-Cal Hospital Care/Uninsured Hospital Care Demonstration Project, as provided under Senate Bill 474, would be available to help fund the restoration of hospital services on the site of the former Los Angeles County Martin Luther King, Jr.-Harbor Hospital campus. (c) The County of Los Angeles and the University of California are working together to open a new hospital on the former Los Angeles County Martin Luther King, Jr.-Harbor Hospital campus. Both entities have approved, in principle, the key terms for opening the new hospital under a private nonprofit entity, which include a substantial funding commitment by the County of Los Angeles. The new hospital will serve as a safety net provider in South Los Angeles, treating a high volume of Medi-Cal and uninsured patients. (d) It is contemplated that the new hospital would be located in the seismically-compliant patient tower on the campus of the former Los Angeles County Martin Luther King, Jr.-Harbor Hospital. The patient tower meets the requirements as an eligible project pursuant to Section 14085.5 of the Welfare and Institutions Code. (e) It is the intent of the Legislature to facilitate the success of the new hospital in providing critical health care to the South Los Angeles population, which is dependent upon adequate and predictable funding levels. SEC. 2. Article 5.15 (commencing with Section 14165.50) is added to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, to read: Article 5.15. Medi-Cal Funding for South Los Angeles 14165.50. To facilitate the financial viability of a new private nonprofit hospital that will serve the population of South Los Angeles that was formerly served by the Los Angeles County Martin Luther King, Jr.-Harbor Hospital, the department and the California Medical Assistance Commission shall take all steps necessary toassureensure the availability of Medi-Cal funding as specified below, or implement mechanisms to provide equivalent funding under successor or modified Medi-Cal payment systems: (a) Ensure that the rates for Medi-Cal inpatient hospital services negotiated under the Selective Provider Contracting Program, as set forth in Article 2.6 (commencing with Section 14081), shall reimburse the new hospital at no less than 60 percent of the hospital's costs for providing the services, exclusive of any supplemental payments. (b) Ensure that Medi-Cal payment for debt service incurred by the County of Los Angeles, and, if applicable, the new hospital, with respect to capital projects located at the site of the new hospital that were previously determined eligible under Section 14085.5, will be made to the new hospital. (c) Ensure that Medi-Cal outpatient services, including emergency room services, will be reimbursed under the same methodology as that established in Section 14105.24. (d) Ensure that the funding provided to the County of Los Angeles through the South Los Angeles Medical Services Preservation Fund, as set forth in Section 14166.25, will continue to be made available to the county for purposes related to meeting the health care needs of the population formerly served by the Los Angeles County Martin Luther King, Jr.-Harbor Hospital. SEC. 3. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to ensure the restoration of critical health care services to the South Los Angeles population formerly served by the Los Angeles County Martin Luther King, Jr.-Harbor Hospital and to ensure that those services remain accessible, it is necessary that this act take effect immediately.