(a) There shall be imposed on each general acute care hospital that is not an exempt facility a quality assurance fee, except that a quality assurance fee under this article shall not be imposed on a converted hospital for the periods when the hospital is a public hospital or a new hospital with respect to a program period.
(b) The department shall compute the quarterly quality assurance fee for each subject fiscal year during a program period pursuant to Section 14169.59.
(c) Subject to Section 14169.63, on the later of the date of the department’s receipt of federal approval or the first day of each program period, the following shall commence:
(1) Within 10 business days following receipt of the notice of federal approval, the department shall send notice to each hospital subject to the quality assurance fee, which shall contain the following information:
(A) The date that the state received notice of federal approval.
(B) The quarterly quality assurance fee for each subject fiscal year.
(C) The date on which each payment is due.
(2) The hospitals shall pay the quarterly quality assurance fee, based on a schedule developed by the department. The department shall establish the date that each payment is due, provided that the first payment shall be due no earlier than 20 days following the department sending the notice pursuant to paragraph (1), and the payments shall be paid at least one month apart, but if possible, the payments shall be paid on a quarterly basis.
(3) Notwithstanding any other provision of this section, the amount of each hospital’s quarterly quality assurance fee for a program period that has not been paid by the hospital before 15 days prior to the end of a program period shall be paid by the hospital no later than 15 days prior to the end of a program period.
(4) Each hospital described in subdivision (a) shall pay the quarterly quality assurance fees that are due, if any, in the amounts and at the times set forth in the notice unless superseded by a subsequent notice from the department.
(d) The quality assurance fee, as assessed pursuant to this section, shall be paid by each hospital subject to the fee to the department for deposit in the fund. Deposits may be accepted at any time and shall be credited toward the program period for which the fees were assessed. This article shall not affect the ability of a hospital to pay fees assessed for a program period after the end of that program period.
(e) This section shall become inoperative if the federal Centers for Medicare and Medicaid Services denies approval for, or does not approve before December 1, 2016, the implementation of the quality assurance fee pursuant to this article or the supplemental payments to private hospitals pursuant to this article for the first program period.
(f) In no case shall the aggregate fees collected in a federal fiscal year pursuant to this section, former Section 14167.32, Section 14168.32, and Section 14169.32 exceed the maximum percentage of the annual aggregate net patient revenue for hospitals subject to the fee that is prescribed pursuant to federal law and regulations as necessary to preclude a finding that an indirect guarantee has been created.
(g) (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 to hospitals that are not repaid when due. Interest shall begin to accrue the day after the date the payment was due and shall be deposited in the fund.
(2) 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.
(h) When a hospital fails to pay all or part of the quality assurance fee on or before the date that payment is due, the department may immediately begin to deduct the unpaid assessment and interest from any Medi-Cal payments owed to the hospital, or, in accordance with Section 12419.5 of the Government Code, from any other state payments owed to the hospital until the full amount is recovered. All amounts, except penalties, deducted by the department under this subdivision shall be deposited in the fund. The remedy provided to the department by this section is in addition to other remedies available under law.
(i) The payment of the quality assurance fee shall not be considered as an allowable cost for Medi-Cal cost reporting and reimbursement purposes.
(j) The department shall work in consultation with the hospital community to implement this article.
(k) This subdivision creates a contractually enforceable promise on behalf of the state to use the proceeds of the quality assurance fee, including any federal matching funds, solely and exclusively for the purposes set forth in this article, to limit the amount of the proceeds of the quality assurance fee to be used to pay for the health care coverage of children as provided in Section 14169.53, to limit any payments for the department’s costs of administration to the amounts set forth in this article, to maintain and continue prior reimbursement levels as set forth in Section 14169.68 on the effective date of that section, and to otherwise comply with all its obligations set forth in this article, provided that amendments that arise from, or have as a basis for, a decision, advice, or determination by the federal Centers for Medicare and Medicaid Services relating to federal approval of the quality assurance fee or the payments set forth in this article shall control for the purposes of this subdivision.
(l) (1) Subject to paragraph (2), the director may waive any or all interest and penalties assessed under this article in the event that the director determines, in his or her sole discretion, that the hospital has demonstrated that imposition of the full quality assurance fee on the timelines applicable under this article has a high likelihood of creating a financial hardship for the hospital or a significant danger of reducing the provision of needed health care services.
(2) Waiver of some or all of the interest or penalties under this subdivision shall be conditioned on the hospital’s agreement to make fee payments, or to have the payments withheld from payments otherwise due from the Medi-Cal program to the hospital, on a schedule developed by the department that takes into account the financial situation of the hospital and the potential impact on services.
(3) A decision by the director under this subdivision shall not be subject to judicial review.
(4) If fee payments are remitted to the department after the date determined by the department to be the final date for calculating the final supplemental payments for a program period under this article, the fee payments shall be refunded to general acute care hospitals, pro rata with the amount of quality assurance fee paid by the hospital in the program period, subject to the limitations of federal law. If federal rules prohibit the refund described in this paragraph, the excess funds shall be used as quality assurance fees for the next program period for general acute care hospitals, pro rata with the quality assurance fees paid by the hospital for the program period.
(5) If during the implementation of this article, fee payments that were due under former Article 5.21 (commencing with Section 14167.1) and former Article 5.22 (commencing with Section 14167.31), or former Article 5.226 (commencing with Section 14168.1) and Article 5.227 (commencing with Section 14168.31), or Article 5.228 (commencing with Section 14169.1) and Article 5.229 (commencing with Section 14169.31) are remitted to the department under a payment plan or for any other reason, and the final date for calculating the final supplemental payments under those articles has passed, then those fee payments shall be deposited in the fund to support the uses established by this article.
(Amended by Stats. 2014, Ch. 442, Sec. 27. (SB 1465) Effective September 18, 2014. Section conditionally inoperative as provided in subd. (e). Inoperative on date prescribed in Section 14169.72. Repealed on January 1 after inoperative date, pursuant to Section 14169.76. Note: See Section 3.5 of Article XVI of the Constitution, which was added on Nov. 8, 2016, by initiative Proposition 52. This section was added by Stats. 2013, Ch. 657 (SB 239).)
Last modified: October 25, 2018