California Hospital Group Proposes Ballot Initiative for Medi-Cal Provider Fee

by Bob Norberg, California Healthline Contributing Reporter

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The California Hospital Association on Wednesday filed a ballot initiative for the November 2014 ballot that would set the percentage the state gets from a fee levied on hospitals and designate how the money is to be spent.

The action, which required notification to the state Attorney General's Office, would lock in place current practices and is not the result of any disagreement with the Legislature, said Jan Emerson-Shea, association vice president.

“It will make sure that funds from the hospital provider fee are used for the purpose they were intended on an on-going basis,” Emerson-Shea said. “In times past the state had taken more into the general fund than we had agreed to. Because the current Legislature cannot bind a future Legislature, we have to go to the ballot and have a voter amendment to the Constitution. It is not the result of any disagreement, however, just a safeguard.”

The announcement came a day after Gov. Jerry Brown (D) signed SB 239, which extends the hospital fee for three years at the same time it reverses Medi-Cal cuts for some hospital skilled-nursing facilities.

“This is a huge win, getting that bill signed was our top legislative priority,” said Emerson-Shea, whose association was a sponsor of the bill.

SB 239, authored by Sen. Ed Hernandez (D-West Covina) and Senate Pro Tem President Darrell Steinberg (D-Sacramento), extends for three years the Medi-Cal quality assurance fee that has been assessed on hospitals since 2009. A portion of the fee goes to the state General Fund for medical programs for children, a portion is given as grants to hospitals and a portion is used as seed money to attract federal funds.

In 2013, the fee raised $3 billion. The state received $620 million, some $40 million went to hospitals as grants and the remainder was used as leverage to attract an additional $1.9 billion in federal funds, Emerson-Shea said.

It is estimated that extending that fee for three more years beginning next year will generate $3 billion for the state's General Fund and attract some $10 billion in new federal money for California hospitals, Emerson-Shea said.

The bill also reversed a 10% cut in Medi-Cal reimbursements to 100 skilled nursing facilities in urban hospitals. Hospital officials said the cuts may have caused some hospitals to close, triggering the transfer of elderly and ill patients to different facilities.

Also signed into law Tuesday was SB 191 by Sen. Alex Padilla, (D-Pacoima) that extends the ability for counties to collect fees for local emergency medical services, with 15% of that fee ear-marked for pediatric trauma care.

The law allows counties to collect a $2 penalty on every $10 assessment on certain criminal and vehicle code violations. The bill extends the law for three years beyond its original sunset date, Jan. 1 2014.


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