CA Welf & Inst Code Section 17612.3

(a)

For each fiscal year, commencing with the 2013–14 fiscal year, the amount to be redirected in accordance with Section 17612.1 shall be determined for each public hospital health system county as follows:

(1)

The public hospital health system county’s revenues and other funds paid or payable for the state fiscal year shall be comprised of the total of the following:

(A)

Medi-Cal revenues.

(B)

Uninsured revenues.

(C)

Medicaid demonstration revenues.

(D)

Hospital fee direct grants.

(E)

Special local health funds.

(F)

The county indigent care health realignment amount.

(G)

The imputed county low-income health amount.

(H)

Imputed gains from other payers.

(I)

The amount by which the public hospital health system county’s costs exceeded the cost containment limit for the fiscal year, expressed as a negative number, multiplied by 0.50.

(2)

The following, incurred by the public hospital health system county for the fiscal year, not to exceed in total the cost containment limit, shall be subtracted from the sum in paragraph (1):

(A)

Medi-Cal costs.

(B)

Uninsured costs.

(C)

The lesser of the other entity intergovernmental transfer amount or the imputed other entity intergovernmental transfer amounts.

(D)

New mandatory other entity intergovernmental transfer amounts.

(3)

The resulting amount determined in paragraph (2) shall be multiplied by 0.80, except that for the 2013–14 fiscal year the resulting amount determined in paragraph (2) shall be multiplied by 0.70.

(4)

If the amount in paragraph (3) is a positive number, that amount, subject to paragraph (5), shall be redirected in accordance with Section 17612.1, except that for the 2013–14 fiscal year the amount to be redirected shall not exceed the amount determined for the county for the 2013–14 fiscal year under subdivision (c) of Section 17603, as that amount may have been reduced by the application of Section 17610.5. If the amount determined in paragraph (3) is a negative number, the redirected amount shall be zero.

(5)

Notwithstanding any other law, the amount to be redirected as determined in paragraph (4) for any fiscal year shall not exceed the county indigent care health realignment amount for that fiscal year.

(6)

(A)The redirected amount shall be applied until the later of the following:

(i)

June 30, 2023.

(ii)

The beginning of the fiscal year following a period of two consecutive fiscal years in which both of the following occur:

(I)

The total interim amount determined under subdivision (b) in May of the previous fiscal year is within 10 percent of the final, reconciled amount in subdivision (d).

(II)

The final, reconciled amounts under subdivision (d) are within 5 percent of each other.

(B)

After the redirected amount ceases as provided in subparagraph (A), a permanent redirected amount shall be established to be an amount determined by calculating the percentage that the redirected amount was in the last fiscal year of the operation of this article of the county’s health realignment amount of that same fiscal year, multiplied by the county’s health realignment amount of all subsequent years.

(b)

Commencing with the 2014–15 fiscal year, the department shall calculate an interim redirected amount for each public hospital health system county under subdivision (a) by the January immediately prior to the starting fiscal year, using the most recent and accurate data available. For purposes of the interim determinations, the cost containment limit shall not be applied. The interim redirected amount shall be updated in the May before the start of the fiscal year in consultation with each public hospital health system county and based on any more recent and accurate data available at that time. During the fiscal year, the interim redirected amount will be applied pursuant to Section 17612.1.

(c)

The predetermined amounts or historical percentages described in subdivisions (i), (l), (m), (n), and (w) of Section 17612.2 shall each be established in accordance with the following procedure:

(1)

By October 31, 2013, each public hospital health system county shall determine the amount or percentage described in the applicable subdivision, and shall provide this calculation to the department, supported by verifiable data and a description of how the determination was made.

(2)

If the department disagrees with the public hospital health system county’s determination, the department shall confer with the public hospital health system county by December 15, 2013, and shall issue its determination by January 31, 2014.

(3)

If no agreement between the parties has been reached by January 31, 2014, the department shall apply the county’s determination when making the interim calculations pursuant to subdivision (b), until a decision is issued pursuant to paragraph (6).

(4)

If no agreement between the parties has been reached by January 31, 2014, the public hospital health system county shall submit a petition by February 28, 2014, to the County Health Care Funding Resolution Committee, established pursuant to Section 17600.60, to seek a decision regarding the historical percentage or amount to be applied in calculations under this section.

(5)

The County Health Care Funding Resolution Committee shall hear and make a determination as to whether the county’s proposed percentage or amount complies with the requirements of this section taking into account the data and calculations of the county and any alternative data and calculations submitted by the department.

(6)

The committee shall issue its final determination within 45 days of the petition. If the county chooses to contest the final determination, the final determination of the committee will be applied for purposes of any interim calculation under subdivision (b) until a final decision is issued pursuant to de novo administrative review pursuant to paragraph (2) of subdivision (d).

(d)

(1)The data for the final calculations under subdivision (a) for the fiscal year shall be submitted by public hospital health system counties within 12 months after the conclusion of each fiscal year as required in Section 17612.4. The data shall be the most recent and accurate data from the public hospital health system county’s books and records pertaining to the revenues paid or payable, and the costs incurred, for services provided in the subject fiscal year. After consulting with the county, the department shall make final calculations using the data submitted pursuant to this paragraph by December 15 of the following fiscal year, and shall provide its final determination to the county. The final determination will also reflect the application of the cost containment limit, if any. If the county and the department agree, a revised recalculation and reconciliation may be completed by the department within six months thereafter.

(2)

The director shall establish an expedited formal appeal process for a public hospital health system county to contest final determinations made under this article. No appeal shall be available for interim determinations made under subdivision (b). The appeals process shall include all of the following:

(A)

The public hospital health system county shall have 30 calendar days, following the issuance of a final determination made under paragraph (6) of subdivision (c) or paragraph (1) of this subdivision, to file an appeal with the Director of Health Care Services. All appeals shall be governed by Section 100171 of the Health and Safety Code, except for those provisions of paragraph (1) of subdivision (d) of Section 100171 of the Health and Safety Code relating to accusations, statements of issues, statement to respondent, and notice of defense, and except as otherwise set forth in this section. All appeals shall be in writing and shall be filed with the State Department of Health Care Service’s Office of Administrative Hearings and Appeals. An appeal shall be deemed filed on the date it is received by the Office of Administrative Hearings and Appeals.

(i)

An appeal shall specifically set forth each issue in dispute, which may include any component of the determination, and include the public hospital health system county’s contentions as to those issues. A formal hearing before an Office of Administrative Hearings and Appeals Administrative Law Judge shall commence within 60 days of the filing of the appeal requesting a formal hearing. A final decision under this paragraph shall be adopted no later than six months following the filing of the appeal.

(ii)

If the public hospital health system county fails to file an appeal within 30 days of the issuance of a determination made under this section, the determination of the department shall be deemed final and not appealable either administratively or to a court of general jurisdiction, except that a county may elect to appeal a determination under subdivision (c) within 30 days of the issuance of the County Health Care Funding Resolution Committee’s final determination under paragraph (6) of subdivision (c) or as a component of an appeal of the department’s final determination under paragraph (1) of this subdivision for the 2013–14 fiscal year.

(B)

If a final decision under this paragraph is not issued by the department within two years of the last day of the subject fiscal year, the public hospital health system county shall be deemed to have exhausted its administrative remedies and shall not be precluded from pursuing any available judicial review. However, the time period in this subdivision shall be extended by either of the following:

(i)

Undue delay caused by the public hospital health system county.

(ii)

An extension of time granted to a public hospital health system county at its sole request, or following the joint request of the public hospital health system county and the department.

(C)

If the final decision issued by the department pursuant to this paragraph results in a different determination than that originally determined by the department, then the Department of Finance shall adjust the original determination by that amount, pursuant to a process developed by the Department of Finance and in consultation with the public hospital health system counties.

(e)

For purposes of this article, all references to “health services” or “health care services,” unless specified otherwise, shall exclude nursing facility, mental health, and substance use disorder services.